Hi all I am planning to buy a plot of land with an old house on it. The land is subdivisible and I can build at the back without having to demolish the existing house. I am planning to retain one or sell both. The project would be 1 year tops. How do you structure a loan like that? Thanks
Depends on whether you need to do an equity release for the DA/CC and depends on whether you are going to build in the back or sell as a vacant land. Also depends on the conditions of the DA, i.e. whether its subdivision first and then construction or construction first and then subdivision. The loan would be straight forward but I would create a seperate facility for the DA/CC so that you can manage track interest expenses clearly. Either way the loan would be pretty straight forward.
Simply borrow 105% by borrowing separately against this house and another property. Have a large loan and then at subdivision get a valuer in and work out how to apportion the loans with your tax advisor. Then split the loans and have loan A secured by block A only and loan B by loan B only. Then sell or move in or refinance etc.
Thanks a lot guys. The idea would be buy then subdivide, then get a valuer in for the new construction loan for the back.
