Hi,
This is my first ever forum post. (anywhere!)
Does anyone have any ideas to obtain finance on small property developments, I have 2 on the go at the moment which will yield good profit. But as my income/serviceability is at its limit (by the banks formulae) I can’t do any more. I would like to start 3 or 4 more now!
Do I need to look at business lending?
Will anyone take into account the profit from developments as income? So I can do this full time and quit my job now?
Thanks
GrantHi Grant,
It is very difficult to answer your question specifically, without knowing the detauils of your situation. There are most probably quite a lot of options open to you. What you need is a broker who is well versed in development funding.
Regards
Alistair PerryHi Grant,
How much equity do you have to put into further projects? If you have an ABN/ACN Possibly you could look at doing low-doc construction loans using your income from developing/investing for serviceability. If you are developing 5+ dwellings you will need to look at business finance, which is a whole new kettle of fish.
Another option is to join with an equity partner to do more projects.
Regards,
Cameron Perry
Finance Consultant
F.R. Perry & Associates
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044hi grant7
couple of things.
1. look at different lenders when seeking money not all with the same lender.
2. not sure about profit as an income depends the structure you are using.
3. it requires a reasonable amount of work to allow for full time employment with developing, I am full time.
4. I haven’t hit that serviceability problem but my structure are such that I organise different lenders for different projects.
5. I have a system of private first at 11% then go to small banks 9% then to large banks commercial 7% and then resi 5.99% honeymoon rate as I go down the tree when I get knocked back thats where that lend is and I refig my numbers on that rate if its still ok I run at that rate.
and as you are finding lending from different areas if serviceability is an issue then a term deposit solves it hsbc like them.
hope this helpshere to help
If you want to get involved in some of the projects I’m involved in email to [email protected]There are some lenders out there that will lend based on end value. around 60-65% LVR at around 12%. No financials usually needed.
Terryw
Discover Home Loans
Parramatta
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Well, today was a lovely summers day, the surf was up etc..
Unfortunately I couldn’t enjoy it as I was stuck at my desk pushing my mouse around [glum]
However thanks for all the responses which have given me some hope of freedom![smiling] (from my job)
Hello grossrealisation.
What is ‘hsbc’
What do you mean by a term deposit helps serviceability?
What is private finance?
HI Cameron,
I’m self employed with an ABN 12 months. (Drafter type person..)Have some equity.
What is an equity partner?
I currently target residential duplex/triplex.
A lender that would value on finished value would be nice as this will always be below 80%.
Thanks
Granthi grant7
hsbc hong kong banking corporation.developments usually take between 12 months and 2 years so putting 12 months interest in a term deposit and the bank knows that the interest is cover for the time of the project and at the end they have a project that will be over the money they have lent.
most banks work on min 80Lvr at any time of the value of the development, hsbc run at 70%.
there are alot of private lenders out there from super funds to credit unions, some are near to bank rates and some are easier to deal with but they also have some funny quirky requirements so they do take a bit more work.
and the last bit is yes there are lenders that lend on end product usually 66% but can get up to 70% or 80% at 11% rate its call gross realisation !!!!! lending
oh where have I heard that name before.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]Hi Grant,
To answer your question, yes there are lenders who will lend on end value of the project to 65% and you could get a second mortgage on top of that if you wanted to go higher, but the rates would be high.
An equity partner is someone who would invest some more equity into the project. The more equity you have in the project the more likely it is that you would be able to obtain favourable finance terms.
Kind Regards,
Cameron Perry
Finance Consultant
F.R. Perry & Associates
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Grant,
If you are looking at development finance then their is definately lenders that I know of that on a duplex construction depending on owner builder or fixed price and good location will look at at standard variable rates.
I have done duplex construction on owner builder (up to 75%) and fixed price (up to 80% depending on the location, loan amount, size of dwellings at 7.75% low-doc. With a triplex construction the LVR would be a bit lower and the rate a bit higher, but its definately achievable if the equity to fund the investment is available. You will probably need to discuss with the lender in regards to the profit of previous projects assisting in servicability.
If your interested I can provide a contact if you like.
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