finance options for developement

Yes it could be done, depending on margins.
eg you could get a loan based on 60% of the end value with the interest capitalised. So it soemthing will be worth, say $1mil when finished, you could get around $500,000 with the ability to let interest capitalise until $600K.

Terryw
Discover Home Loans
North Sydney
[email protected]

In order to secure a 60 percent LVR loan with capitalized interest, as suggested above, the lender may require additional security in the form of [discounted] assets – if you do not have a positive track record, in terms of property development.

Furthermore, there can be a number of costs involved during the preliminary stage – prior to securing a lender.

You should contact a qualified lender to discuss – recommend one which specializes in development finance, i.e. most commercial banks.

— Michael

“You wouldn’t need additional security, but the valuations have to stack up.”

– In some instances the above is correct.

However, if the “developer” has no prior experience/track record, and has not employed a reputable QS and qualified professionals, i.e. architect, project manager and/or building contractor to conduct the development – no matter how large or small – the lender often requires access to security over and above the projected valuation.

“these sorts of loans are not cheap – probably 10-12%.”

The above rate of interest is typically charged by lenders other than commercial banks, and often incurs an additional 1-4% establishment/origination fee.

— Michael