Hi Guys,
Just wondering how much equity you require in a deal to go ahead with it.
At the moment i am subdividing a house I purchased for 170,000. Hoping to sell for both houses for around 440,000.
Minus tax, subdivision costs, stamp duty, I am hoping to make around 50,000.
This is my first investment so I am happy to have any gain in equity. But seasoned investors, would this be worthwhile for you?
Thanks,
NathanHi Nathan,
To be clear, let’s get a couple of things sorted:
1. It’s unlikely you will need a loan for the sub-division, but rather the construction of the new dwelling(s)
2. Construction finance is usually based on stage of completion against the building contract, rather than an end value
3. Others on the site will have a better grip on this, but I would have thought that 70% would be a standard loan for construction
4. The land component may be treated separately, and if you have equity you may be able to refinance to pay the shortfall on the construction.There’s a bit to understand here, so be sure to consult with an expert.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
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