All Topics / Finance / Townhouse dual occ in Flemington

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  • Profile photo of mkansizmkansiz
    Member
    @mkansiz
    Join Date: 2012
    Post Count: 3
    June 5, 2012 - 4:31 am

    hi all,

    Looking for some advice please.

    I have a 420 sqm block in Flemington, VIC with an old 50's yellow brick house. I'm looking at knocking this down, subdividing down the middle and putting up a two double story townhouses side by side (shared wall), with each about 22 squares, 3-3.5 bedrooms… looking at a nice executive style townhouse finish to suite the neighbourhood.

    I did once have townplanning approval, but it lapsed (as I went overseas to work for a few years)…I now want to resurrect this dream of mine. Idea is to sell one and live in the other (I'd like to keep both and rent the other out…but I dont think I can afford it)

    Now my specific question is how to best go about attempting to finance this… I have been getting indicative quotes to build the two for around 600k.

    I dont think I can borrow that much on what I already owe.

    As I see it, I have the following options

    1. Push hard to see if I can borrow this…perhaps committing to selling one "off the plan"?  I believe banks will then look at this as a 'business loan" rather than a construction loan?

    2. Enter into a Joint Venture with a builder…whereby I sell one subdivided block on to the builder, and he builds both units, one for himself and one more me….If I do this, any reason why I cant discount the selling of the block in return for a discounted build cost? seems like a win-win?

    3. What about trying to find some venture capital to help fund this?

    Might there be any other options that I have missed??

    Hope some one can lend their thoughts.

    Regards,
    Mustafa

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    June 5, 2012 - 4:38 am

    Hi Mustafa

    Be suprised how many times i get approached with a very similar proposal.

    Without hard data it is difficult to advise further but in the main on a small deal like this:

    1) A pre-sale wont do you much good. Residential lenders dont lend against pre-sales.
    2) Knocking the property might initially reduce the value as you will only be left with the land.
    3) Could still be done as residential loan with the right lender.

    All going to come down to serviceability and loan to valuation ratio.

    As i say actual numbers would be needed to advise further.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of mkansizmkansiz
    Member
    @mkansiz
    Join Date: 2012
    Post Count: 3
    June 5, 2012 - 4:41 am

    Thanks Richard,

    Would you recommend talking to a few banks….or going for a broker..?

    any suggestion down Melbourne way?

    Regards,
    Mustafa

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    June 5, 2012 - 6:06 am

    Mustafa dont waste your time with the local Banks as they wont have a clue.

    You need a Broker with a wee bit of experience.

    Advertising on this site is not allowed but i have 101 clients in Melbourne if you wanted to shoot me an email with some numbers i will give you an honest unbiased view of what can and cannot be done.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

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