This is probably a request aimed at commercial lenders but any input is appreciated..
Quite simply – if your looking at getting finance for a property development of around $3mil for stage one $9mil and want a lend of around 65-70% LVR (based on licensed valuation of final product).. what banks do you approach first and which do you stay away from?
Are you looking for someone to allow you to capatilise the interest? Are you wanting a lend againsst the Gross realisation? I’m thinking that’s where you were at judging by your post? Depending on your situation and how straight up and down it is will depend on where your unding is best placed.
Be happy to discuss it further with you off forum if you wish?
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055I have just completed a Development Finance deal in Vic for $8.3Million and you will be suprised at the lenders who didnt want to look at it.
It is a specialist area and soemthing that is not easily answered on the forum without a lot more information.
You appear to be wanting 65/70% of GR in a stageds loan which make life easier. Not sure as to the break up of the deal or the size or total number of lots. Do you have any pre-sales, what is your experience in this area of development and how much cash or equity are you putting up yourself.
All these questions will be important in your presentation as well as negotiating better terms and conditions with the lender.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 6.89%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
Go to an experinced development broker – its all about how you present the deal, unless you are an expericed developer most banks will laugh at you. However, an experinced broker will make all the differnce. All the questions about GRV and presales are all extermely relevant and dending on how much you got to put into the deal and how good a “buy” it is, will decide on how to proceed with finance.
Contact me if you like more info
[email protected]
Deanna Wittey
B& W FInancial Serviceshi Property WA
its not which bank will give you the 12 mil development loan because for me they all will.
its got to do with a couple of things.
1. whats the profitability of the project at the end (min21%)
2. who’s the builder and whats his experience
3. pre sales or not
4. what the experience of the developers and have they done this size and type before.
5. where is it and can you show that you can get the sales at the end.
6. who trying to get the deal for you and do they know what they are doing.
7. you need a full marketing business proposal
8. which for me is the hardest one do you know what your doing.
and this one is not to put you down but you must be harder on your self then anyone else in the project and if you don’t know what your doing ( thats ok ) get someone that does around you.
a 12 mil lend to some is not a large lend but a 12 mil development is alot of head aches and is not for the faint hearted.
and if you can answer all of the above leave it in the ground or it will be you thats next to it in the ground.
I have builders that have gone 10 units 5 units 10 units and then the 20 units site and these are very experience builders and they nearly kill them, so for a novice to be asking where can I lend 12 mil forget it.
funding is not the hard part ( it is for the builders but not for me) for me looking at them the building is the hard part ( but we all have different prospectives.
if you wish to go ahead then get all the above and 80% of the banks will lend on a 70% land and 70% construct and at 12 mil its about 30 units so thats 10 presales from non related people. and you will need to put in 3.9 mil into the project roughly plus stamp duty and gst and legals and da/cc costs and account keeping costs
and won’t go on any longer as there is a list that they won’t lend youhere to help
If you want to get involved in some of the projects I’m involved in email to [email protected]
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