Type of loan for purchase property and subdivide

I want to buy an existing house and subdivide it into 2 or 3 lots immediately without living in the house. What are the loan options I have?

1. Apply normal home loan to purchase the block then construction loan to subdivide and build a house?
2. Can I apply construction loan to fund the purchase and construction cost?
3. Other type of loans?

 

Apply with a lender that would consider construction for 3 on one title. Subdivision usually happens after construction. Apply to settle as is and a preapp for the construction

 

Sorry I am a newbie in construction, do you mean I apply for subdivision from the council after I built 3 houses?

 

yes

 

Best engage a good broker to help you with this, also research the process to do a development like this, what seems easy often isn't.

 

And if you are really fortunate, the Coucnil will charge you an open space contribution based on a % of the land value! Make sure you factor that into your feasibility.

 

Also, should I use personal name for the project or use an ABN?

 

hi @propertyvaluer, I was told that i had to do the land division first. In fact demolition first, subdivision second and construction third. Mine is in Adelaide.

I think if you were building 3 townhouses on a single freehold block, and had community title (or strata title equivalent) the steps might be different, but for freehold it would be a land division prior to construction.

Feel free to fact check what i have written (it is on the basis 'i was told' ) and while you are at it fact check the other advice .......

 

Subdivision rules vary from state to state. Some are done before, some after and some can be either.

It's best to seek some guidance from a town planner as to the options in your state and then talk to a broker as to how that impact borrowing. Generally if it's subdivision/titles after then you will require more deposit as the bank will lend less money

Beware of tax implications such as GST and income/company tax depending on which structure/entity you do the project in. Advice from an accountant is beneficial to ensure you understand how each work

 

You shouldn't be doing a project without advice. That question doesn't make sense.

 

Yes, agree with that. I just made appointment with my accountant.