I have just been having a look on this site at the development blueprint resource that is available for $495 by Martin Ayles, and i have come across this;
"One of the major concerns people have about developing is they fear they will need hundreds-of-thousands-of-dollars worth of cash sitting in the bank to afford to pay building costs.
What they don't understand is one of the major benefits of developing real estate is leverage.
It's a fact that is not well known among real estate investors – developers are able to apply for "Tentative On Completion" valuations for their developments.
This allows developers to borrow a large percentage of the final value of their development – that's the value of the finished houses which are ready for someone to live in.
You'll still need some cash to put into the deal, but through financing effectively you can minimise your cash-in, and get the bank to fund much (if not all) of your building costs."
This Tentative on Completion, how does it all work, I have become very interested in excatly what Martin does in the last few days and am wondering how this borrowing works, how I get the money to build a house on the land when I have no money to start with really.
Can someone please shed some light on this and also on some general finance matter concerning subdivisions/building IPs.
Chris.
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