Bulding Time in Perth

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I-will-get-there
Member
@i-will-get-there
Join Date: 2008
Post Count: 12
June 22, 2008 - 8:04 am
Hi
We are looking into purchasing a development property and putting 6 houses on it.
However to finance all this we need to get a sizeable commercial loan and possibly
vendor finance.
Does anyone know if it is possible at the moment to get new homes built in a 12 month
timeframe? After approval and all the rest most new home companies like Dale Alcock etc
have said it would be 18 months to 2 years. And just how much should they knock off each property
if we get 6 built? I think 2 years is a long time to pay all that interest!
My partner thinks I am crazy to even think of developing but I really like the idea. Just got to
cross ts and dot is….thanks in advance
Scott No Mates
Participant
@scott-no-mates
Join Date: 2005
Post Count: 3,856
June 22, 2008 - 2:20 pm
Speak to a commercial builder or someone who specialises in villas/townhouses – may give you some savings especially as they handle bigger projects.
18-2 years wouldn't be out of the question however you might consider staging the project if you can provide safe and completed access to the properties that you want to sell off first (hide the rest of the development behind a temporary fence/landscaping).
Shaun M Smith
Member
@shaun-m-smith
Join Date: 2008
Post Count: 18
June 23, 2008 - 2:28 am
Hi there
I would suggest you shall be able to find a builder that will complete in less than two years however in your costing I would budget for a 2 year build so as to provide a wosrt case ROI. If the development still works on that basis then fantastic.
From a finance perspective you have two real options. The first shall be institutional funds where the majority of banks for instance will lend 80% of hard costs. The other being 2nd tier lenders that at a higher rate and fee structure can offer up to 70% of on completion value. A lot of developers prefer the second option even though the cost of funds is higher as the 70% of on completion can reduce their equity contribution dramatically.
Regards
Shaun Smith | Managing Director | CDS Financial Services
Direct: +612 9153 0333 |O: 1300 888 366 | F: 1300 732 388 | M: 0419 330 778 | E: [email protected] | W: http://www.cdsfinancial.com.au