Boarding house construction funding

Hi all

We are looking to build a self-contained 9 rooms boarding house in Country Victoria. Our broker have recently advised us that no lender is funding this type of projects at current market. We would just like to seek opinions and options, any comments and suggestions are appreciated.

Thanks
Shawn

 

it would be commercial lending I imagine.

 

Thanks for the reply Terry.

Yes we have been looking at commercial lending, we have been working with smaller private lenders to get a construction loan...it was all going ahead till a few weeks ago and all of a sudden things have shifted they decided the risk is too high.

I am hoping to get a view on the commercial side of the market as I have heard the borrowing is getting easier with RBA lowering rate etc

Thanks in advence

 

Commercial lend yes, LVR usually pretty low though, like 50% if you can find a lender that will touch it. Certainly not straight forward to fund them, do you think there's a reason for that?
Commercial lending for most other security types is going pretty well at the moment in my recent experience

 

There were 2 new BH approved in Lane Cove North recently both for 50+ studios. Intrepid person in the house inbetween the two blocks was holding out for $5M when the others sold for $2M. Will funding be on such generous terms for these as well?

 

Hard to say, maybe not so generous at that level, could be cashed up developer/investors behind something that large.

 

What happens with in company ownership and for resi use? Would LVR a lot higher than 50%?

and LVR would be land + new building costs?

Seen a few properties with approved BH for sale and always a huge premium on top of the suburb median for the land zone and area