Just though I’d post some info for all you budding developers.
Some Types of Finance Available normally over $1million
FUNDING AGAINST COST: Is the more traditional, institution based type of lending. The actual costs of development are assessed and the lender will advance funding against cost.In most instances Banks will require a developer to have contributed at least 20% of the hard cost development as “Hurt Money” as they like to call it.
Where the application is supported by sufficient presales,some Lenders will lend up to 90% of the construction costs when coupled with increased value from the DA, can result in a development being fully funded.
LANDBANK FUNDING: Landbank funding is common where the property is acquired for future redevelopment.and the developer is seeking a HOLD facility; The property could be Englobo ( ie, Vacant land with out the benefits of development approval) or is lodged and developer is seeking to have it amended or in some cases simply going through the process of selecting a Builder and obtaining pre-sales.
Typically, Bank’s and other Lending instutions will lend only 50% of the land value in these circumstances.Some Lenders are prepared to lend up to 66.66% of the value ( independent of the price ) and in some cases up to 75% of the Value.
GROSS REALISATION FUNDING: Is funding against the end value of the product, generally after the deduction of the GST payable under the margin Scheme. The lender will disregard the actual cost of the development and will take a risk against the asset. In most cases, presales will not be required, which means the developer does not have to discount stock in order to achieve sales targets imposed by the lender.
Some lenders will advance up to 80% of the end value of the development.
Financial Wellbeing Coach
W: http://www.pfsfinance.com.au
E:[email protected]
E:[email protected]Development Finance Specialist
You must be logged in to reply to this topic. If you don't have an account, you can register here.
