Hi
I don’t have much but $100k, I am expecting to get upto 90% bank loan which would be around $1M.I want to buy land/land with old house and then build 3 villa units (2Bed 1bath 1Garage) and sell them.
Question 1. How much land I need?
Question 2. How much each villa may cost?
Question 3. How long it may take? from planning stage to getting the keys?Is it looks too ambitious? By the way, I am talking about Springvale, Clarinda, Oakleigh South area in Victoria.
Thanks
SalMost construction loans will only be up 70% lvr
For development of any size much more cash is needed then for purchase of an already built property. As Chrisss1010 pointed out. If you are novice in development, you should work with 60% max of total development costs. Check with mortgage broker. You do not have enough cash. Best to learn about the whole process first (find a mentor). If you expect to have more cash in the future, then you may consider starting with your plan, rent the house for a while, and develop when you are financially stronger.
Answer to all your questions: depends of the area and associated council.
If you have 100k you def have to start smaller. This will definitely mean you’ll need to identify other areas for the project.
You’d probably get away with a dual occ in a more affordable area.
Speak to your broker to see exactly where you stand financially, then locate an area that will work for you.
Sorry i have to disagree 90% lend on $1M on 3 Townhouses would be doable subject to a few other considerations.
The previous posters have commented on GR lending which is not applicable in this case as you will be working on a percentage of cost price.
In saying this you need to be careful of the land value when you start off as the house will disappear once it is knocked down and you will only be able to lend against the land value.
Few other little hurdles to get over but is certainly doable subject to LMI.
Cheers
Yours in Finance
0-40 Properties in a decade. Ask me how.Richard Taylor | Australia's leading private lender
Hi,
You want to buy land/land with an old house and then build 3 villa units (2Bed 1bath 1Garage) and then sell them.
I would like to give you some food for thought whilst you find the financial answers that you are looking for.
What if that particular combination is not what best suits the area or does not give you the best return?
Will you look at another block, a block that only works with that combination?Developers would think slightly differently, they find the formula to a block rather than have a pre-determined formula to follow.
Why not find a block & only then start working on figuring out it’s max potential (to best suit the area & your budget). Then make plans to achieve that (once you feel comfortable that it’s the one).It will open up more possibilities for you & keep you learning with every piece of land that you find because the project is not merely dismissed for not conforming to one template. If you dismiss it, it’s because it did not stack up fundamentally. You are learning with every rejection you make, you are learning & gaining with every project you complete. You are setting yourself up for a possible win/win.
More wealth to you, have a wonderful & exciting journey as a developer.
Cheers,
Sorry i have to disagree 90% lend on $1M on 3 Townhouses would be doable subject to a few other considerations.
The previous posters have commented on GR lending which is not applicable in this case as you will be working on a percentage of cost price.
In saying this you need to be careful of the land value when you start off as the house will disappear once it is knocked down and you will only be able to lend against the land value.
Few other little hurdles to get over but is certainly doable subject to LMI.
Cheers
Yours in Finance0-40 Properties in a decade. Ask me how.Hi Richard
What you avise as to structure loan to 90% lvr for construction of uints , as I’ll be looking to do this in the near future .
Thanks in advanceChriss
Subject to the number of units on the block 90% of land and 90% of ongoing construction cost.
Cheers
Yours in Finance
0-40 Properties in a decade. Ask me how.Richard Taylor | Australia's leading private lender
Chriss
Subject to the number of units on the block 90% of land and 90% of ongoing construction cost.
Cheers
Yours in Finance0-40 Properties in a decade. Ask me how.Hi
Looking to start small 2/3 units maybe , only every Hurd of 70% construction loans what banks do 90% ?
Thanks
You must be logged in to reply to this topic. If you don't have an account, you can register here.
