Valuation on unique vacant land lot

Hi guys,

Thought Ill get some of the members opinion on this.

It is a 56sqm allotment land down a laneway within Melbourne's inner bluechip suburb, surrounded by residential and commercial properties. Zoned GRZ and no overlays.

Highest and best use of the land could be a triple storey townhouse, which such dwellings in the area go for 700-750k on 50-55 sqm lots, or a two storey townhouse on 50-60sqm lots in which sold market prices to be within the 550-600k. All STCA of course and designs

Due to the limited evidence, it seems like few of the valuers are knocking it back and asking to cancel the job. *Probably because it aint a vanilla job with alot evidence.

Trying to get finance on it at 88LVR but having trouble with valuers even accepting it within a PropertyPro short form. Getting reasons such as *Refusal of permit back in 2007 and *Not suited for a Property Pro valuation. Hoping to get the valuation to meet contract price.

Just wondering how I should go about this, escalate with the broker to speak to the Bank Manager? or request some sort of Long Form Residential valuation via a Hypothetical development approach, which I read to be a methodology to such scenarios.

It is a unique block. Any help would be much appreciated.

 

Read the LEP & DCP to confirm that you are able to build a stand alone dwelling on the site. The generous proportions of the site may have contributed towards the development refusal at you may not be able to achieve the required setbacks from boundaries.

At you may not be possible to achieve a DA, highest and best use may be hardstand for parking cars or a garage. Achievable rent say $25/wk * 50 * 3 = $3750/yr @ 6% = LV $62,500

 

Prior to purchasing the lot we have spoken to our architect and townplanner, which are confident in obtaining a DA, since 2007 there has been new planning schemes locally and state implemented and gazetted within the council since then.

 

If you get a valuer (try getting your own valuation done by one of the Bank's panel valuer's) you may have a chance but due to the uncertainty of what can be built on the site, other than parking, no valuer will touch it under the restrictions placed on them by the Banks.

 

If the value is only about $60k why would you need a valuation or loan ?

 

Presumably to build?

 

contract price for this is $190k

 

I have no advice but I think as you're venturing into LMI territory that you will find this difficult unless you can go sub 80LVR.

I do however find this fascinating and love stuff like this. I adore tiny blocks.

 

Hence why the purchase, although tiny but packs so much potential! Hoping the 88LVR and valuation can stack up. Any other tips or strategies for this?

 

Hi Rolf,

How does that work when a valuation is needed to take place for security? If so, any banks that would rely on contract only or do we need to just valuation shop and see whom accepts...

 

Thanks Rolf!

 

Was wondering if a valuation report could be used for other banks to lend on? Could they change the bank details on report and accept that desired Val report

 

looks like you are hitting the "APRA WALL" with an 88% lend.

 

Hi guys,

An update on this unique situation.

-BankWest: Valuation came through at contract price with minimal risks on the full report.

Although now Bank West has came back from there assessment department and saying that due to the block of land being 56sqm, small and quite unique that they dont think it is something they would secure on.

Is there anyway we can respond to this, there are dwellings of small allotments of double storey and triple storey houses in the area of such size selling from $600-$700k, which is the end goal for the client to get plans and designs for the lot.

There is also scarce amount of land in the Essendon area, which anything built on this land would just be a gold mine!

Hope

 

Pepper also has come back and said "We have agreed to decline due to the land size and if they build will further reduce the size of the living space to unacceptable standards"

Isnt the above all subject to what council is willing to approve. Once again this seems to be subjective, as there is evidence in the area of small sized freehold and strata units of under 60sqm in the area.

 

Buy they are all built, completed and possibly lived in.
If you completed the project and then requested finance the story could well be different.
Perhaps you should try to do the whole project without a normal bank then replace the personal loans with normal finance

 

Any other non conforming banks besides Pepper that could help? Seems like I am running out of options and settlement is in five weeks