G'day
I'm looking at investing in small-scale realestate development (<1Mil$ projects) but considering doing it through an limited liability company.
This'll make my life somewhat harder and more painful, but be more scalable and will make it possible for me to tap into other people's money and tackle more lucrative projects sooner, so it will (I hope) pay off nicely.
My concerns lie with lending to gear once I have 20-30% in hard cash, particularly in the construction loan department.
Once I put together my plan I'm going to go talk to some banks. Can anyone clue me in as to what roughly I am going to expect the banks demand for security for my company against
[a] Money lent to buy land+house+back-yard
and
Money lent to subdivide and build a second house?Cheers & Thanks!
Firstly welcome to the forum and I hope you enjoy your time with us.
Finance has to be the biggest issue most new time developers come across especially in the current climate with alll major lenders wary of even larger developers with cash and exeperience let alone virgin investors with no past experience and limited resources.
Whilst there are some lenders who lend against the end valuation of the project most traditional lenders base their advance against the land valuation and ongoing construction costs.
Normal max lvr would be circa 65-70% of each.
We deal with several specialist development lenders however the criteria varies from client to client.
More information together with a Statement of Position would be required to assess the application further.
Richard Taylor | Australia's leading private lender
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