Morning everyone,
A quick question relating to builders finance, to purchase land, construct dwelling, for sale at completion or off the plan.
We have a 10% deposit down on a block that titles in December 2013, purchase price is $300K and construction costs are $300K.
In saying this, we will market the property and have a contract for sale "off the plan" for around $700K in short order.
What would I require in the way of cash up front, in order to get financing for this? Taking into account the $28K down already.
Will a signed contract at $700K alleviate any requirement for further funds from myself (my pty ltd company)?
Presumable as well, the deposit from the purchase would also have to go into trust and not cash?
Hi Longgrass,
Have you thought of selling it before you build? Just like a house & land package? Purchaser only pays stamp duty on the land then. Good savings to be made for the purchaser, also less rick for you. If sold this way you do the build as you would for any client. They pay deposit and all stages when due you don't have to use your money. (Except for your working capital of course). Settles in Dec 2013 you've got 10 mths to sell it!
You stick a sign board on the block offer a choice of designs suitable and sell before you build.
Sorry just re-read you posting. In saying this, we will market the property and have a contract for sale "off the plan" for around $700K in short order.
Ok I assume you settle on the land in Dec 2013 If you take the deposit for the land from purchaser it goes in to a trust account and come settlement day, the end purchaser pays for the land in full and from the disbursements a cheque gets written to you for your 'on sell' margin.
The deposit for house can get paid anytime and you get started once land settles.
It's sounds like fun doesn't it?
Hope this helps.
Andrew
Investment Property Builders P/L
You must be logged in to reply to this topic. If you don't have an account, you can register here.
