Forum Replies Created
Fundamentally you are asking the wrong questions. Does ayone want to buy what you propose to build?Does anyone want to rent what you build? Does the income generated from what you build exceed the cost to build? This market research is the first step. If the answer to all of these questions is yes, with a 30% buffer to the third question then investigate obtaining town planning and building approval to construct whatever you are proposing.The cost of town planning / building approval is various however I have recently achieved this in Northern Tasmania for less than $20,000 re the construction of 7 x 2 bedroom villas.
Two suggestions involve seeking seeding finance.
Where else can you get 15% return on an investment? Offer 100 x [y] contracts in relation to your project with a quarenteed return of 15%. Three of these should enable you to seek the finance with a mortgage provider.
Offer a villa at cost price to investors with the proviso that they invest $150K seed capital. I have just negotiated such a deal involving 7 units. Three of these units will involve no capital gain and 4 will. I am hopeful of achieving a 6.9% interest loan for 750k to complete the project. It is noted that the contracts for achieving this seed capital were somewhat difficult to achieve. In hindsight, i would have preferred a straight offer of 15% return on the seed capital provided.
The other suggestion is to complete the project in stages.
Best of luck
Russell.
