Hey all
My names Ray,
ive recently just got my builders licence i am still young 22 years old..
and i just want to know if i want to buy a house and then knockdown and build a duplex on it how much money will i need so the bank can give me money?
so if i pay the 10% deposit for the land.. how much moeny will i need to get a construction loan to build it ?
what is the best way to get this all happening with minimal money involved
please i have always been curious about this and if anyone could help me would muchly be appreciatedKind Regards
RayHi Ray.
Welcome to the forums and congratulations on earning your buiilders licence.
I have moved your post to the Finance forum. I think you are more likely to receive some answers to your queries here than in the help needed forum.
Good luck.
– Moderator
Ray
If you are building yourself the lenders would probably consider you an owner builder, even if you are licenced.
I would imagine the mortgage insurers probably would not accept this arrangement and you would need to contribute 20% at least. that is 20% of the land costs and 20% of the costs of construction. You would have to pay your 20% upfront before the bank would chip in too.
If you were building for someone else then you could probably get away with 10%
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
younan21 wrote:Hey allMy names Ray,
ive recently just got my builders licence i am still young 22 years old..
and i just want to know if i want to buy a house and then knockdown and build a duplex on it how much money will i need so the bank can give me money?
so if i pay the 10% deposit for the land.. how much moeny will i need to get a construction loan to build it ?
what is the best way to get this all happening with minimal money involved
please i have always been curious about this and if anyone could help me would muchly be appreciatedKind Regards
RayGenerally speaking you can get a LVR up to 95% for the COMBINE land and construction cost, so really 95% land and 95% construction…so your 10% on the land is enough at this point if the land cost the same as the construction etc…
Having said that you must have a really good credit file and genuine savings + solid income for a 95% LVR….95% LVR for construction is a lot hardier then a established home.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
It will also depends on who will build the property.
If you are thinking of doing it yourself and considered an Owner Builder i think you have very little chance of getting 95% lvr.
As Michael has mentioned for the higher lvr's you certainly need to have excellent credit, employment and score well.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yep, def a big NO to owners builders…..you will have no chance at 95%…as a matter of fact, you won’t even get past 75-80% LVR combine for owners builders given your experience etc…
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
I just opened up a company Younan constructions
Would that help me ? So I’m self employedNo, sorry mate… The bank still looks at it as a risk and liability. Newly self employed company makes it even worst.
Owners build- under 75% LVR….could be as low as 65% if you have no exp
Registered builder- 95% LVRRegards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
But aren’t I a registered builder ?
What if my sister buys the house in her name n I build it for her ?
Now your thinking
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
1. Yes you are a registered builder – but your also a owners builder..risk still there
2. If your sis buy and hires you, that’s fine – but if you decide to transfer into your name later on .stamp duty is payable once again + sis must be able to afford the loan + genuine depositSounds like you REALLLLYYY want to build haha
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Haha nah I just wanna start building for myself with minimal money just to kickstart myself…
Never knew it would be this much of a headache
I didnt want to say you had NO chance at 95% as i was aware of one lender who would go to 85% for owner builders but as Miichael said anything over 75% iis a struggle.
Do you really want to go through the hastle of transferring the property from your sister to you and the related expenses as has been mentioned. Course this assumes your sister would qualify for the loan and claimed it as her PPOR to avoid potential CGT.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Ray
If you have finance issues because of current savings, age, bank assessment of your employment etc, then consider using an individual finance partner's money for the project. It could be your sister but she may have similar issues with obtaining credit, I don't know, but going into a joint venture partnership may be your only alternative.
This arrangement may not only solve the issue noted above, but also provide you with a faster track to get the prior experience runs on the board for future development projects.
You have 2 options. Either look for a money partner who will provide the funds at a certain interest figure ( usually higher than the bank), to be paid off monthly and then the balance when the project is sold, or look for Joint venture partners who can provide finance allowing you to project manage, but would want a % interest in the final outcome ( usually 50%)
Ian
http://theblockblog.com
Free Property Investment Info. Tools & Resources for Investors with a Sense of Humour.
Life's Too Important To Be Treated Seriously!So what do you guys think is the best way if I want to buy a land and build a duplex and to sell straight away to make a profit ?
There’s gotta be shifty ways hahadiscretionary trust?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
What’s that terryw sorry I’m being annoying haha just very curious
do some research
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
younan21
My advise, forget banks, and forget building duplex. There are many builders out there with big pocket, and many of them are not doing it, because they cant make money on it, unless you own the land which you purchased 6-7 years ago. At this stage land is very expensive, construction costs are high, and there is too much risk, and too much work for very small profit.
Go and do private jobs, start off with extensions and work yourself up, thats how you do it.
First you crawl than walk then you run.
I'm a builder too, thats my advise, I've been through it all.
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