In The Media: Sunday Independent
Onate was featured in the most recent edition of the Sunday Independent. Our CEO Dan Gandesha spoke to Samantha McCaughren about Onate’s new funding line and deals to date.
Read the article on independent.ie here.
Team Tuesday: Meet our Underwriting Director, Hugh Lyons
Where did you begin your career?
“My first job was packing bags in Tesco as a 15-year-old during a summer, but my career started in the legal services department of ACC Bank back in 2007.”
What is the best career advice you’ve ever been given?
“It’s a cliché, but ‘The Golden Rule’ is something that has always stuck with me - treat others as you would want to be treated.”
What tips would you give to someone starting in your profession?
“Apart from the above, I’d advise people to always look to take on as much responsibility as they can handle and not to wait for responsibility to be handed to you.
Also, make as many strong connections as you can. This industry is largely about relationships so aim to be having at least one coffee a week with a potential new contact, while not ignoring your existing contact base.”
What is your greatest professional achievement to date?
“Again, a bit of a cliché but my role with Onate since the middle of 2021 gives me an enormous sense of pride.
Helping to build a loan book and Onate’s reputation as a leader in the bridging finance market has been extremely rewarding.”
Tell us something people may not know about you
“Nothing! I’m an open book.”
The Seamless Speedy Process That’s Now Available When Buying a Property
It’s never been straightforward buying property, or at least, that’s all we hear.
You can buy a car or book a holiday online. Banking can be done online. In Ireland, you couldn’t buy a house online pre 2019. But over the last few years, a number of businesses - some small and Irish owned, are changing the way when it comes to purchasing property. From a completely pedestrian and physical market, we’re now seeing a digital revolution. Now, Onate and Offr, two Irish-founded businesses and leaders in their respective fields and are bringing new creative thinking to the market, speeding up the process and adding transparency.
At Onate, we work with borrowers who are purchasing residential investment properties that may be in need of some refurbishment prior to being rented out or placed on the market.
These borrowers see opportunities in buying and refurbishing properties, and by implementing their value-add strategies, they provide essential accommodation for the market. We can look at proposals that traditional banks shy away from. Borrowers want loans at speed and we’re able to give a quick yes or no within 24 hours. Decision making happens in-house and we have completed deals in under five days for residential, mixed use and commercial properties. We deliver fast and flexible finance from €250k up to €4 million.
That is on our side of the deal. Now, through partnering with Offr, the next step of the process is simplified too. Since they entered the market, Offr has shaken up the buying and selling of property, removing months of hassle at just a single tap. The technology platform which helps estate agents reduce the amount of time it takes to buy or sell a property, automates 90% of the process and communications. Buyers can now use their phone to quickly register, see offers, make offers, sign contracts and pay deposits. Partnering with Onate means buyers can access a mortgage at the tap of button a while registering.
The process is faster than it was previously while is also more transparent for everyone involved. The online platform allows for all documents to be uploaded within a matter of seconds, giving precious time back to agents, solicitors, buyers and sellers, and allowing more time for productivity. Interestingly, 42% of the last 25,000 offers made through Offr have been in the evenings and at weekends, outside office hours, making the service accessible 24 hours a day.
Previously, before buying and selling property became digitised, it took approximately seven months from listing to completion. Now it’s roughly three months. Securing a mortgage and property digitally has sped up the process and now you can go to sale agreed in a matter of minutes. The platform is a new, fresh, fast and transparent way of doing things. Even contracts are signed online.
Onate and Offr work fully remote meaning you can avail of their services if you’re based anywhere in Ireland. So if you’re looking for a speedy, seamless process when purchasing a property using the Offr platform and are in need of a loan, Onate is here to help.
The demand for housing is higher than ever before. A recent report from Daft.ie has shown that house prices rose by 3.8% on average during the second quarter of 2022, with the average listed price increasing to €311,874. This is up almost 10% on the same period in 2021.
Updated figures from the Residential Tenancies Board (RTB) have shown an increase of 1,068 landlords serving notices to quit the rental market, bringing the number to almost 3,000 notices to quit issued between January and the end of June this year. Most landlords are exiting the market because they want to sell their properties.
This is down to various reasons such as the level of taxation, their properties needing upgrades, issues with problem tenants or being vacant with no rent coming in or they’re simply tired.
With demand for housing increasing, it has never been more important to be able to act quickly and efficiently in securing a property. Let the cumbersome, lengthy processes be a thing of the past and let Onate and Offr help you every step of the way.
This article has been written in collaboration with Robert Hoban, CEO of Offr.
If you have any further queries or to see how our lending process works, visit www.onate.com
In The Media -Bridging Loan Directory
Our Lending Director John Ring analyses the Irish residential property market in an article on the Bridging Loan Directory.
Read the full piece here - https://bridgingloandirectory.co.uk/opinion/the-irish-residential-property-market/
Case Study: Bridging Finance of €600,000 Provided in Dublin
Several properties in need of light refurbishment
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Onate provided bridging loans of €600,000
In early 2021, a financial advisor introduced us to a borrower who was looking to build up a portfolio of residential assets in Dublin.
The borrower had identified a number of properties in the Dublin area that were in need of light refurbishment and he felt that he could add value by completing some minor repairs and modernising the units. Before approaching Onate, the borrower had already lined up an exit with a fund who were looking to acquire properties in turn key condition.
The borrower was already working in construction and his experience allowed him to quickly identify suitable properties that he could add value to. His background in completing refurbishments for other clients helped him to accurately forecast the time and the cost that would be involved in the project.
Onate stepped in and provided the initial bridging finance loan of €150,000. The vendor of the property was keen for a quick sale, and this allowed the borrower to purchase the property at what he believed was a discount on the market value.
As this had worked so well, the borrower subsequently completed a further three loans with Onate. These have now all been repaid. The quick decision making followed by Onate quickly closing the transaction gave the borrower the confidence to keep Onate as his preferred lender and ensure that he can now quickly purchase any property that he identifies.
In The Media: Onate’s John Ring in IPAV’s Property Professional Magazine
Onate’s Lending Director John Ring is featured in the latest Property Professional Magazine from IPAV (The Institute of Professional Auctioneers and Valuers).
Read John’s article on page 18 here
Team Tuesday: Meet our Lending Manager, Michael Gavin
Where did you begin your career?
“I began my career in Pepper Asset Services as a relationship manager in the Commercial Real Estate Team in Shannon. I was extremely lucky to end up on that team as I had some great mentors and colleagues who helped me succeed and gave me the opportunities to move forward in my career.
Interestingly, I was supposed to interview for a different role that day but as luck would have it the Australian manager for The Commercial Real Estate Team was down in Shannon that day and he decided to take that interview and subsequently hired me.
My career could have been very different if it wasn’t due to that lucky timing!”
What is the best career advice you’ve ever been given?
“There is one piece of advice from my first boss that has really stuck with me:
’Don’t get too disappointed if something doesn’t go your way and don’t get too excited when something is going your way’
When I started out in my career, I lost out on a deal that I had thought was a certainty and I was given this advice.
I’ve learned that it’s important not to let things outside your control affect you too much. If you keep working hard eventually things will work out”
What tips would you give to someone starting in your profession?
“The most important thing you can do when you are starting in a business development role, or any role, is to network.
Over the past eight years I have built up strong personal and professional relationships. When someone asks me for help, I help however I can.
If you have a reputation as someone that will go above and beyond for people it makes the job that little bit easier”
What is your greatest professional achievement to date?
“I wouldn’t say that I have one achievement that stands out. I am very happy to be in the role that I am in today and to get to this position I set myself smaller targets that I have met along the way.
I have always wanted to get into property lending and I was lucky to have been given the opportunity to start my lending career with a great team in First Citizen who gave me the opportunity to learn, originate deals, and to build my network.
It is a really good work environment here at Onate with excellent colleagues who are always there to help with questions or to assist to get that urgent deal over the line”
Tell us something people may not know about you
“In Thailand a few years ago I competed (against my better judgement) in a Thai Boxing exhibition.
At the end of the short fight my hand was raised as the winner and although many around me weren’t convinced that I did enough to win I have claimed this as a victory and will retire undefeated like Floyd Mayweather and Tyson Fury!”
The value in considering a mixed-use investment
One of the most common queries we get at Onate is about mixed-use investments and their advantages. Mixed-Use investments have always been popular investment options for investors in Ireland. The value of the mixed-use investment market last year was €609m with 115 transactions carried out. That’s according to QRE Real Estate Advisors, who have carried out a detailed analysis of the last five years in their recent Investment Market Report.
However, in recent years, negative commentary on the difficulties that retail is facing have impacted marketability, particularly for mixed use investments that are retail-led.
Demand for retail
The reality on the ground in terms of retail demand, is that there remains excellent demand from retailers in both City Centre and Suburban locations. Grafton Street has witnessed a significant reduction in rental value but QRE confirmed that they continue to see excellent demand from retailers in mixed use suburban locations. Areas such as Clontarf, Malahide, Dalkey, Monkstown, Rathmines and Blackrock have extremely low vacancy rates in retail buildings and when one does become vacant there is generally excellent demand.
Rental values have remained resilient. Typical leases will be for a period of 10 years but occupiers are looking for flexibility and five year breaks are now more common in Ireland. Convenience and necessity retail held up extremely well during Covid 19 and QRE regard this as an excellent investment class with good quality office or residential overhead.
Advice for investors
The basic fundamentals of any investment must be met when considering a purchase. While the investor is buying a physical asset, this should be surveyed to ensure structural integrity, but the reality is that it is the strength of the tenant and the lease that is in place are arguably the most important factors of this kind of investment. The key lease obligations to analyse in great detail are the repairing obligations of the tenant, the yield up provisions and the rent review provisions.
The drafting of these clauses can be critical and will impact significantly on the value of any investment. The strength of the tenant and its business is also a critical factor. The certain ability to pay the annual rent will put downward pressure on yield, due to the reduction in risk. Obviously the passing rent is critically important.
An investment that is over rented should be analysed accordingly, as with the advent of upwards and downwards rent reviews since 2009, there is a chance that rental values could recede. Similarly if a property is significantly under rented, there is obvious scope to enhance rents at the next rent review, which should also be factored into the price paid.
Market overview
Private Rented Sector (PRS) and Residential was the dominant asset class in 2021 accounting for almost 30% of all spend. This was followed by Office and Industrial at 23% and 17.6% of the market respectively. Retail accounted for 15% of all investment spend in 2021.
Mixed-Use investments accounted for 10.7% of all spend in the Sub €20m sector, which equated to approximately €65m of assets traded in this sector with an average lot size of €3.1m. In 2017, there were 43 transactions in this sector which had a value of €199m and an average lot size of €4.62m.
At Onate, we work closely with investors to help complete mixed-use purchases.
Our decision making happens entirely in-house, meaning we move quickly and provide certainty. We’ve completed loan drawdowns in just seven days, and regularly close transactions in two to three weeks. Our loan appetite ranges from €250k to €4m, secured by a first legal mortgage charge. We have a minimum interest period of just 90 days, redemption thereafter does not incur exit fees.
Whether it’s loans for debt settlements, equity release, residential auction purchase, Pre ’63 residential, social housing or borrowers who have a complex credit history, we provide fast and flexible finance for a term of up to two years. We also provide bridging finance on sites with planning permission for primarily residential developments. We lend up to 75% loan-to-value based on property type and location and we can lend nationally.
This article has been written in collaboration with Conor Whelan, Managing Director of QRE Real Estate Advisors
Case Study: Bridging Finance of €2m Provided in MidWest
Equity release and refinance for several properties
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Onate provided bridging loan for €2m
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10 day closing achieved
Earlier this year, a financial advisor introduced us to the prospect of financing the purchase of a trading pub, refinancing short term debt and releasing equity for a client secured against residential properties and several pubs. These were owned by the promoter and were going to be converted into residential properties.
The promoter was in the process of going through a much larger refinancing of his properties with another lender. This was a large and complex transaction that the promoter anticipated would take a number of months. In the meantime, the opportunity came up to purchase a prominent pub in the Midwest. The promoter also had short term debt secured against a number of residential properties that he needed to repay before the larger loan would be ready to complete. They also wanted to release some equity to complete some other development projects.
Onate stepped in and provided the bridging finance of €2m to allow the borrowers purchase the trading pub, repay short term debt and release equity to complete the development projects.
This transaction was completed in 10 working days. The quick turnaround time ensured that the promoter did not miss out on the purchase of a well-known pub in the mid-west. It also allowed them to repay the short term debt before the facility expired and release equity that allowed him to complete other development projects.
The National Retrofitting Scheme - What does it mean for our borrowers?
Following the announcement that grants of more than €25,000 will be offered to individual householders and investors to help pay for deep retrofits of homes, we’ve been asked what it means for Onate borrowers.
The current government has set itself targets of retrofitting 500,000 homes to B2 standard by 2030 and installing 400,000 heat pumps. A network of “one-stop shops” will form a crucial part of this plan. These supports will be available throughout the country and will cover the application process, access to finance and construction work.
While the news is pertinent to many of our potential borrowers, the process can appear confusing and difficult, but if explored correctly, can save money in the long run.
Exemptions
There are two different kinds of exemption when it comes to retrofitting properties:
The initial setting of the rent on a dwelling which had not been rented for a period of two years prior to the immediate tenancy commencement date. All rent reviews thereafter must adhere to the Rent Pressure Zone formula
A 'substantial change' in the nature of the accommodation has been defined in the legislation and will only be deemed to have taken place once a certain criteria is met.
That criteria must include:
A permanent extension of over 25% of the current floor area
The internal layout of the dwelling is permanently altered
The number of rooms permanently increased
A dwelling must be adapted for access for a person with a disability
If a building is currently rated D1 or lower, the building BER needs to improve by three building energy ratings
If a property currently has a C3 rating or higher, it needs to improve by two building energy ratings
Pre-63 Properties
Another issue of concern is the retrofitting of Pre-63 properties. Some pre 63's are subject to preservation orders and many are not. Most Pre-63 properties are based across four floors so an overall heat loss reflects better on a Pre-63 in comparison to a one or two bed apartment. Apartments are generally smaller and the BER is more difficult to increase as there are less options to work with.
If the property is a protected structure, the following needs to be carried out:
Metal frame insulation with a protective layer for damp proofing as the basement is below ground
Air to air heat pump installation. Issues arise due to location of external pumps, ducting holes through walls
Install an internal second window to increase the u-value.
Estimated Costs
The below table outlines a rough estimate of costs and associated grants for a typical 3/4 bed semi-detached house and a typical 1/2 bed apartment:
Top Tips for Investors Looking to Retrofit a Property
Be aware of the ratings advertised when a property is up for sale as they can sometimes be misleading. It may be a lower rating when it is inspected after purchase
Always check the minimum BER requirements for that particular area with your local council as some councils vary
If you’re looking for a long term lease from the council, you need to ensure the property was vacant for at least 12 months and that there is a demand for social housing in that particular area. This is the Repair and Leasing Scheme and the property should be assessed by the local council representative in advance and comply with minimum housing standards
Do your research in advance. If you are purchasing a second hand property that is more than 20-25 years old and it requires internal insulation, heating upgrades, new windows and doors etc, it may be a good time to get the electrics checked out at the same time. It is best to rewire and upgrade and hardwire your CO2 alarms, smoke alarms and heat alarms.
At Onate, our offering is structured to allow borrowers to release equity quickly and easily from their residential and commercial properties. Our team of experienced, specialist property lenders offer bespoke property bridging loans to home builders, developers, property investors and entrepreneurs. We are fast and flexible, and we assess each case on its merits. All decisions are taken in-house which means we can move quickly and with certainty. We have an appetite to lend in all locations nationally – from cities and large towns to small villages and rural locations.
This article was written in conjunction with John Powell, Managing Director of Premier Property Group
Team Tuesday: Meet our Lending Director, John Ring
Where did you begin your career?
“I began my career in the Irish Nationwide building society as a mortgage administrator dealing with mortgage applications from both the regional branches of the building society and mortgage brokers.
This was in late 1997 and I remember the starting salary was IR£7,500.”
What is the best career advice you’ve ever been given?
“I don’t think there is any one piece of advice that has stuck with me, other than the example good mentors have shown me throughout my career.
I’ve had great mentors who have helped me to understand that treating people with respect and honesty always wins, whether they are customers, stakeholders or partners.
Having seen the rise of the Celtic Tiger and the subsequent bust along with the financial crisis, I have had the benefit of seeing how people reacted on the way up and also on the way down!”
What tips would you give to someone starting in your profession?
“Build your network and don’t over promise.
Our business is relationship based and managing expectations is a big part of what I do so it is always great to exceed expectations with clients.
The contrary can be damaging to both you and your brand.”
What is your greatest professional achievement to date?
“My greatest professional achievement to date has been able to maintain relationships with various business contacts, some of which are over 20 years old.
It is great to work in an environment here at Onate, where your decision making and experience is valued.
Working with Dan Gandesha has been super. As with all great leaders, he positions you to ensure that you are content and supported in order to grow both personally and professionally in tandem with the business.”
Tell us something people may not know about you
“I haven’t joined the dry robe brigade yet, but have taken up sea swimming since Covid struck. I’ve found this a great way to switch off mentally and a super way to reset after a busy day.”
Case Study: Bridging Finance of €915k provided in MidWest
Debt Settlement loan for seven properties
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Onate provided bridging loans for €915,000
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16 day closing achieved
In Q4 2021, Onate was presented with the prospect of providing a bridging loan to finance a debt settlement from a fund which had purchased legacy debt. This related to a portfolio of properties in various locations across the Midwest and Dublin owned by a professional. The portfolio comprised seven five residential investment properties and two offices valued at €1.8m.
The main consideration the borrower had when selecting their lender was speed of execution. It was essential that the fund received the debt settlement amount by an agreed date in the near future.
Onate issued its Approval in Principle (AIP) within 24 hours. As soon as the borrower returned the signed AIP along with the Due Diligence fee, Onate moved quickly to have the portfolio valued, and to have the legal title for all seven properties reviewed by our legal team.
This was a challenging undertaking due to the number of properties involved and their diverse locations. However, despite the tight deadline, Onate were able to ensure that the settlement funds were issue within 16 days of terms being agreed.
Onate’s bridging loan of €915,000 facilitated the borrower in settling with the fund, gaining full control of the portfolio, and executing a phased sales strategy of the portfolio.
Over the following six months, the borrower sold five of the properties and redeemed their debt in full. This bridging loan from Onate allowed them to retain the two properties that are core to their business.
Case Study: Bridging Finance of €435k provided in North West
Four incomplete residential properties
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Onate provided bridging finance of €435K
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Shortage of residential properties fulfilled
In mid 2021, a financial advisor introduced Onate to the prospect of financing a debt settlement from a fund which had purchased legacy debt relating to four incomplete residential properties. The properties are situated in the North West of Ireland.
The properties were originally built during the Celtic Tiger era, but were never fully completed. The four properties, in a completed state, were valued at circa €965K. However there were a number of issues to resolve in order to realise this value.
These issues included access, works to be completed and connection issues to services. Due to these issues, the fund which purchased the debt came to a settlement with the borrowers to purchase the properties for €400K.
In parallel to this, the borrowers had been finishing the properties and resolving the connection issues with the services. Due to works recommencing on the property, this generated local interest in purchasing the properties by owner occupiers.
Onate stepped in and provided the bridging finance of €435K in order to allow the borrowers exit the position with the fund, gain full control of the properties and execute a sale process over a six month period. The properties were then valued at the original €965K.
This brought four new unfinished residential properties to the market. These properties were purchased by local families to help fulfill the shortage of residential properties in the area.
Team Tuesday: Meet our CEO, Dan Gandesha
Where did you begin your career?
“KPMG, in their Technology, Media & Telecoms audit practice (I’m referring to adult career, see last question…!) ”
What is the best career advice you’ve ever been given?
“Obviously not delivered to me directly, but Mark Twain’s famous quote - “Twenty years from now, you will be more disappointed by the things you didn’t do than by the ones you did do” has been a powerful force, especially in taking the step to build a new business for the first time.
Onate is the second business I’ve helped to build, but this was still a helpful piece of advice.
Similarly as we adapt and evolve Onate, I keep this in mind.”
What tips would you give to someone starting in your profession?
“I characterise my profession as building companies and teams in finance and technology.
From that perspective, I would advise a focus on simplicity. Ask yourself, what is the one simple thing that this company or team is going to be great at?
In Onate’s case, that’s “delivering a fast yes or no & following through at pace”.
Knowing this core focus allows us to build our team, design our processes & select our partners with a clear vision of what we are all working to achieve.
It doesn’t suit many, but that’s ok. We’re focused on our mission and those that believe in it too.
It’s pervasive through everything we do.”
What is your greatest professional achievement to date?
“All of my professional achievements have been as a contributor to a team. I can’t claim to own the achievement personally.
I also see everything I do as a learning experience to take into my next challenge.
There tends to be a focus on recent activities as these are building on all the learning from years gone by. Within this context, I would definitely say the team we’ve built at Onate.
I enjoy my time at Onate enormously because at every level - our team interacting with borrowers & executing deals on the ground here in Ireland, our funding partners, our legal counsel, our Board & Shareholders - it’s a group that enjoys working together and clearly understands what we’re looking to achieve.
We’re rowing in the same direction. Which is far easier said than done.
There are always ups and downs in any team or business, but the foundation we have allows us to have more ups than downs, and work through the downs quickly and with good spirits.”
Tell us something people may not know about you
“When I was 12, I worked on Saturdays in a scrap yard. Safety standards weren’t great.
Tasks included reducing an old caravan to flat pile with just a club hammer and a chisel, and removing a gearbox from a crashed vehicle using an angle grinder.
The highlight of each day was a 6am bacon roll from the local food truck, where I expect food hygiene standards were lower than the scrap yard’s safety standards.
On the plus side, I knew how to put in a hard day’s work pretty early in life.”
Our Lending Process and How It Works
Updated February 2022
At Onate, we specialise in completing property bridging loans at a fast pace.
Our decision making happens entirely in-house, meaning we move quickly and provide certainty. We’ve completed loan drawdowns in just seven days, and regularly close transactions in two to three weeks.
Our loan appetite ranges from €150k to €4m, secured by a first legal mortgage charge. We have a minimum interest period of just 90 days, redemption thereafter does not incur exit fees.
Whether it’s loans for debt settlements, equity release, residential auction purchase, Pre ’63 residential, social housing or borrowers who have a complex credit history, we provide fast and flexible finance for a term of up to two years. We also provide bridging finance on sites with planning permission for primarily residential developments.
We lend up to 75% loan-to-value based on property type and location and we can lend nationally.
Here’s how the process works:
Contact our Team
Contact our lending team on +353 (1) 697 2588, or complete our application form and email it to us at hello@onate.com. If the loan meets our lending criteria, we’ll provide an immediate indication of our terms by email.
Agreement in Principle
Within one working day of receiving your request to proceed, we’ll produce an agreement in principle confirming in further detail the terms and conditions on which we are willing to lend.
Once Fee Paid
We receive formal credit approval and instruct our valuer and solicitor. We will also request any outstanding information on the borrowing entity and the persons that ultimately own it.
Legal Process to Completion
Our solicitors can turn around a loan in just a few days, provided they have all the information they require on the property. It is important your solicitor provides this information quickly, and is generally familiar with short term property finance. We can then send the funds to our solicitor for completion.
Steps to ensure the transaction moves smoothly:
Engage your Solicitor and ensure the property Deeds and associated information pack are sent to our solicitor immediately. It means our solicitor can raise any questions early
Your Accountant or Solicitor will need to set up an SPV (Special Purpose Vehicle). This is neither complex nor costly and can be set up within a couple of days
All-Party Call with Solicitors where the deadlines are agreed
Arrange access for our Valuer to be able to view the property early. The report can be turned around within five days
Speak to your Insurance broker and get the relevant I.D. and Utility Bill certified by your solicitor. Doing this early avoids any unnecessary delay to closing.
Provided the above steps happen swiftly, Onate will be able to complete the loan in short order. We’re here to help you, and move the transaction along as quickly as possible.
In The Media: The Irish Independent
“It’s very easy to take a simplistic approach when it comes to office work, such as do staff come in on time, do they put in long hours, are they always in their seat. Historically, that’s how we assess productivity – it has been a tick-the-box exercise.
When you have a remote team, that’s not an option. You have to treat people as grown-ups and trust them.”
Our CEO Dan Gandesha is featured in today’s Irish Independent. Dan discusses the remote-first culture at Onate and how it benefits the business and employees.
Read the full article here
Using Bridging Finance for Equity Release
At Onate, we provide bridging finance for various purposes such as debt settlements, property purchase or transition finance. Another common request is for an equity release facility. This is where a borrower already owns a residential or mixed-use property that is either unencumbered (no debt) or with only a small loan attached. In these circumstances, Onate can help the borrower to access the equity locked up in the property through a bridging loan.
Once released, these funds can be used for a number of purposes. A recent example saw a client invest in their business, as a working capital type facility for a specific project. Another borrower used an equity release loan to finish off works on a refurbishment project.
Another recent equity release loan meant completing works on an existing residential development. In a separate case, the borrower used the loan to fund a debt settlement on a different property. They couldn't use the debt settlement property as security due to title issues.
Equity release is often not the sole reason that a borrower comes to Onate. In many instances, a borrower may have already been engaging with our team before an equity release becomes part of their requirement. In all cases, we’re prepared for the various aspects of potential deals that come our way.
Our clients see real advantages to equity release finance. Often it’s not a source of finance that they would have considered before or even realised it was a viable option. Like other lending opportunities, we can look at proposals that traditional banks shy away from. Once the borrower has the title deeds to the property, Onate’s speed of execution comes into play. Borrowers can secure the required loan within 2-3 weeks, or in some cases, just days.
At Onate, our offering is structured to allow borrowers to quickly and easily release equity from their residential and commercial properties. Our team of experienced, specialist property lenders offer bespoke property bridging loans of up to two million euro to home builders, developers, property investors and entrepreneurs. We are fast and flexible, and we assess each case on its merits. All decisions are taken in-house which means we can move quickly and with certainty. We have an appetite to lend in all locations nationally – from cities and large towns to small villages and rural locations.
If you have any further queries or to see how our lending process works, visit www.onate.com
Read more about the many uses of bridging finance such as debt settlements and transition finance on our blog.
In The Media - The Business Post
We are delighted that this week’s edition of The Business Post featured Onate and our recent funding news.
Read the full article here: https://www.businesspost.ie/financial-services/bridging-lender-onate-targets-growth-after-securing-eur60m-funding-952924de
Complex Credit History & Bridging Finance
Regular readers of this blog or Onate's LinkedIn page will be aware of the many advantages of bridging finance, such as speed and flexibility. Another advantage is our ability to evaluate proposals involving what some would term a ‘complex credit history’ or ‘legacy credit issues’. This is something that a traditional lender may not be willing to consider. Yet, in most cases, a complex credit history alone will not be a dealbreaker for Onate.
Legacy Credit Issues
The majority of legacy credit issues that we see in Onate date back to the 2008 global financial crisis. It’s aftermath included over-leveraged exposures that began to unravel as property prices plummeted and market rents reduced. This left many borrowers in negative equity and with unsustainable repayment schedules. These non-performing loans (NPLs) fell into arrears, and were sold off to investment funds at a discount.
Residential property prices and rents began to rise in Ireland from late 2013 onwards. Both have continued rising to date. The residential property market has gone from strength to strength since then but credit issues from 2008 or 2009 can still prohibit people from accessing much-needed credit now. This can be the case whether they’re looking to purchase residential properties as an investment in their future, or to refinance NPLs sold by their original lenders.
Debt Right-Sizing
At Onate, we support borrowers in exiting funds while retaining ownership of their assets. Our refinance allows for the debt to be right-sized to a sustainable level. It also allows the debt to be further refinanced by a longer-term debt provider in due course. This might be after carrying out refurbishments or re-tenanting the property. This value-add strategy might not have been something that the borrower was willing or able to do while with the investment fund.
The end result is that the loan is no longer in negative equity, and repayments are now sustainable. The borrower, armed with this bridging loan and a clean track record of repayments to Onate during the agreed term, is in a much better position. This loan can now be further refinanced by some of these previously-uninterested lenders over a longer-term. This allows the borrower to plan for the future and once again view their property as an investment rather than a liability.
Our Approach
Proposals have many aspects, and addressing a legacy credit issue is only one element. Onate assesses proposals that traditional lenders struggle with. We do this by evaluating each proposal on its individual merits and on a holistic basis. As well as evaluating the borrower, we also take into consideration the property as asset-backed lenders.
At Onate, our team of experienced, specialist property lenders offer bespoke residential investment bridging loans of up to €2 million to property investors and entrepreneurs. We are fast and flexible, and we assess each case on its merits. All decisions are made in-house which means we can move quickly and with certainty. We have an appetite to lend across Ireland– from cities and large towns to small villages and rural locations.
If you have any further queries or to see how our lending process works, visit https://www.onate.com/blog/our-lending-process-and-how-it-works
Social Housing: Key to Affordability and Liveability of Irish Towns and Cities
The Simon Communities of Ireland’s recent Locked Out of the Market Report shows a further deterioration in the availability of affordable rental properties across the country.
This requirement for more housing stock is something we’re all too familiar with.
Affordability
Unfortunately this isn’t a new issue and will continue to be a problem for many years to come. We recently saw the launch of the Minister’s Housing for All plan which outlined the plan to increase the supply of housing to an average of 33,000 per year over the next decade, increase social housing delivery, address vacant properties, and to make efficient use of existing stock.
At Onate, we work with investors and developers who come to us with residential properties that may be in need of some refurbishment prior to being rented out or placed on the market. These investors see opportunities in buying and refurbishing properties, and by implementing their value-add strategies, they provide essential rental accommodation for the market.
These investors and developers want to be able to go to a local authority or housing association and put a long term (generally 20 – 25 years) lease in place. If it’s a housing association, they’re Government funded or partly Government funded so it’s seen as a very good covenant from an investor’s perspective when purchasing these properties.
Onate has worked with numerous property investors who needed financial support to allow them to refurbish their properties in order to get them back into the housing stock. Recently, Onate supported a client with a debt settlement which allowed them to refurbish their properties. Following the refurbishment, these properties – which had been in limbo for years while the owners had worked through issues with the bank – were put on the open market and sold to owner occupiers.
Liveability
These vacant or tired properties are situated across the island of Ireland, including city centres. By buying these city centre properties and making those refurbishments, investors are bringing people back into the city centre and in turn, supporting local businesses. This is something that’s happening right across the country but unfortunately not at a quick enough pace to meet the demand. If you take Limerick Chamber’s Future Development of Limerick City report, they found a need to ensure that housing supply increases in order to meet the forecasted population growth for Limerick which is 1,000 new homes per year for the next 20 years.
We’ve also recently seen Waterford’s Vacant House Repair and Lease pilot initiative. This ensures refurbishment to suitable vacant properties is funded to bring them up to the standard required for rented accommodation. The cost of the works is deducted from lease payments over an agreed lease term and is aided by the City and County Council.
When it comes to social housing, each city can approach the issue differently, but their focus and our focus remains the same - getting much needed quality affordable residential units back to the housing market.
At Onate, we’re working to do this. Our product can help bridge the refurbishment and sale or rent of residential units and our team of experienced, specialist property lenders offer bespoke residential investment bridging loans of up to two million euro to home builders, developers, property investors and entrepreneurs. We are fast and flexible, and we assess each case on its merits. All decisions are taken in-house which means we can move quickly and with certainty. We have an appetite to lend in all locations nationally – from cities and large towns to small villages and rural locations.
If you have any further queries or to see how our lending process works, visit www.onate.com