Finance for 3 townhouse development.

Discussion in 'Loans & Mortgage Brokers' started by Elicon, 11th Feb, 2017.

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  1. Elicon

    Elicon Well-Known Member

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    Hi guys.

    Do banks accept the site not been subdivided when construction finance is sought for a 3 townhouse development? 2 of the 3 will definitely be presold with the other during construction. Is 80 per cent the maximum on offer on the net grv value?

    Thanks
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Yes. No need for pretty sales even. You could get 80% contract price under resi
     
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  3. 380

    380 Well-Known Member

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    80% of (in one line) valuation with few lenders without pre sales!
     
  4. D.T.

    D.T. Specialist Property Manager Business Member

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    Anything 3 or under is fairly basic when structured correctly. When I did mine I paid for the subdivision fees myself then @Corey Batt organised finance based on 85% of the estimated end value. Well worth having a chat to him.
     
  5. Elicon

    Elicon Well-Known Member

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    Thanks guys. Does company borrower with trust structure matter?
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    No
     
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  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Its that in one line valuation that gets most peops with residential based finance.

    Valuers will commonly shave 15 t0 25 % off the GRV to produce in one line vals for various risk factors.

    Thats where it can be handy to have access to loans > 80 % lvr, which a few lenders will do sibject to loan amount.

    3 OOT is the magic number, beyond that the resi lender options get very tight

    ta
    rolf
     
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  8. Elicon

    Elicon Well-Known Member

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    So in dollar terms not a massive difference with how commercial treat it ie 65 per cent grv less selling costs and gst? Better off getting site subdivided in the beginning is my guess.
     
  9. klabat

    klabat Well-Known Member

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    What are the options for a 4 resi development?
     
  10. Corey Batt

    Corey Batt Well-Known Member

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    There's a small number of lenders which will still fund it under residential lending @ 80% LVR, otherwise you're looking at a commercial development with the associated rules and requirements.
     
  11. wombat777

    wombat777 Well-Known Member

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    So is there an advantage in doing the strata ahead of the financing? Does this allow estimated values of the individual dwellings to be used instead of "in-one-line"?

    Would this be feasible where the dwellings share common walls and there is a common driveway?
     
  12. Corey Batt

    Corey Batt Well-Known Member

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    Absolutely better to do titling/strata ahead of finance - this allows each individual property be valued instead of the discounted single valuation figure.

    if it's a single owner developing the site right through to complete the finance side will not have an issue - it will come down to whether the council will allow the titles to be released.
     
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  13. Redwood

    Redwood Well-Known Member

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    Auswide may be a suitable lender for you.

    Cheers Ivan
     

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