Ever spotted a tired-looking property and thought, “I could turn that into a goldmine”?
You’re not alone. The UK property market is full of opportunities — but flipping a property for profit isn’t just about DIY and a lick of paint. The key to fast, profitable property deals? Bridging finance.
If you’re new to property flipping or investing, this guide from Sunrise Commercial breaks down exactly how to use a bridging loan to renovate and flip a property — even if you have no experience and limited cash upfront.
What Is a Bridging Loan?
A bridging loan is a short-term, interest-only loan typically used by property investors and developers to “bridge the gap” between buying a property and either selling it or refinancing with a long-term mortgage.
It’s ideal for situations where speed is essential or when a traditional mortgage isn’t suitable — like:
- Buying an unmortgageable property
- Funding a quick refurbishment project
- Purchasing property at auction
- Securing a deal before your existing property sells
Why Bridging Loans Are Ideal for Property Flips
For first-time flippers or seasoned investors alike, bridging loans offer several unique advantages:
1. Quick Access to Funds
Speed is crucial in competitive property markets. Bridging loans can be arranged in as little as 5–15 days, letting you secure time-sensitive deals or auction purchases.
2. Flexible Lending Criteria
Unlike traditional mortgages, bridging lenders focus on the property’s value and your exit strategy, not your income or credit score. Perfect for self-employed individuals or those with imperfect credit.
3. Finance Both Purchase and Renovation
Some lenders allow you to borrow against the future value of the property after renovation — also known as the Gross Development Value (GDV). This means you can cover both purchase and refurbishment costs in one go.
4. Interest Roll-Up
Most bridging loans are interest-only and offer an option to “roll up” the interest — meaning you don’t make monthly payments. Instead, the full loan (plus interest) is repaid at the end of the term when you sell or refinance.
Gross vs Net Loan Amounts Explained
This is a key concept many beginners overlook — and it can affect how much money you actually receive.
Gross Loan Amount
This is the total amount of the loan facility, including rolled-up interest, lender fees, and arrangement costs.
Net Loan Amount
This is the actual amount you receive on day one, after fees and interest deductions.
Example:
- Gross loan approved: £200,000
- Lender fees, interest & costs: £15,000
- Net loan paid to you: £185,000
Important: Always budget based on the net amount, not the gross. A good broker (like Sunrise Commercial) will help ensure you’re not caught short.
Step-by-Step: Using a Bridging Loan to Flip a Property
Step 1: Spot a Profitable Deal
Look for properties with potential:
- Below market value (BMV)
- Structurally sound but cosmetically tired
- In high-demand postcodes or regenerating areas
Step 2: Assess Costs and Value
Get quotes for renovation works and instruct a RICS valuation to estimate:
- Current market value
- GDV (Gross Development Value) — value after refurb
- Projected profit margin
Step 3: Secure a Bridging Loan
Work with an expert broker to:
- Find the right lender
- Structure the loan around your deal
- Ensure you get both purchase and refurb funding where possible
Step 4: Renovate Efficiently
Keep tight control of:
- Budget
- Schedule
- Quality
Lenders often release refurb funds in stages, based on progress.
Step 5: Sell or Refinance
Once the property is renovated:
- Sell and use proceeds to repay the loan
- Or refinance onto a buy-to-let mortgage if you want to keep it
Example: Flip with Bridging Finance
You buy a 2-bed house in Manchester for £140,000.
Renovation cost: £25,000
GDV (after works): £230,000
You secure a bridging loan:
- Gross loan: £180,000
- Net loan received: £170,000 (after fees)
- Renovate and sell the property for £230,000
- After repaying loan and costs, you walk away with a £40,000+ profit
Types of Properties Ideal for Flipping
Not every property is a winner, but these often work well:
- Probate or inherited properties
- Ex-local authority homes
- Fire-damaged or neglected properties
- Homes bought at auction
- Leasehold flats with short leases (if you can extend post-purchase)
Common Mistakes First-Time Flippers Make
Avoid these to protect your profits:
- Overpaying on purchase price
- Underestimating refurbishment costs
- Ignoring GDV realism
- Poor planning of exit strategy
- Choosing the wrong lender or loan structure
Real-World Case Study
Investor Profile: First-time flipper, London-based, self-employed
Property: 3-bed terrace in Derby, purchase price £160,000
Loan: £180,000 gross bridging loan (included £20,000 refurb budget)
GDV: £250,000
Timeline: Bought, renovated, and sold within 6 months
Profit after all costs: £38,500
This deal wouldn’t have been possible with a traditional mortgage. The client used Sunrise Commercial to secure funding in 9 days.
Useful Tools & Resources for Property Flippers
- Build Cost Estimators: Build Cost Calculator
- Auction Property Sites: Savills, Allsop, iamsold
- Planning Portal: PlanningPortal.co.uk
- Free Valuation Tools: Rightmove, Zoopla
FAQs: Bridging Loans for Flipping
How fast can I access funds?
Usually within 5–15 working days, depending on your solicitor and valuation.
Do I need to make monthly payments?
Most bridging loans allow rolled-up interest — no monthly payments required.
Can I get a bridging loan with bad credit?
Yes. Bridging lenders assess the deal, not just your credit score.
Do I need prior experience?
Not necessarily. If you have a solid plan and exit strategy, we can help.
Why Work With Sunrise Commercial?
We’re not just brokers — we’re your property finance partners.
At Sunrise Commercial, we:
- Offer access to the UK’s leading bridging lenders
- Secure funding tailored to your project and experience level
- Help you structure deals based on realistic numbers
- Move quickly to get deals over the line fast
Ready to fund your first (or next) flip?
Contact us today at https://www.sunrisecommercial.co.uk/ or call 07939 091418.
Final Thoughts
Bridging finance can be a powerful tool to launch or grow your property investment journey — especially when used wisely and with expert guidance.
Don’t let lack of cash, income proof, or mortgage delays hold you back. Use bridging loans to turn tired homes into serious profit — and let Sunrise Commercial help you every step of the way.
For more information contact us for a fees free chat.
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📞 Call us at 07939 091418
📧 Email: john@sunrisecommercial.co.uk
🌐 Visit: https://www.sunrisecommercial.co.uk/
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