Who will loan for construction commercial

Hi

Requiring funding for a 4 townhouse development (hold, not wanting to presale)
- only require funding for 1/2 of development, in effect 2 townhouses, but have been told that banks will still see this as a commercial construction loan.

Where the big banks are squeezing me on serviceability - can anyone recommend other banks / lenders that provide funding to the little guy for construction loan funding


Also - where do i start if I was to seek out private investors as a funding option....

 

Some banks will treat this as standard residential construction, but you will need to show you can afford the loan, but you can use the proposed rental income.

If you only need a 50% LVR the rent might be close to covering the loan from a serviceability perspective.

If you can't demonstrate serviceability then depending on how much you need to borrow you could get a commercial loan (with no pre-sale requirement) and try to refinance to a more generous lender once you have finished the development and you have completed the subdivision.

This is quite a complex scenario and you will likely need to sit down with a broker and go through your situation in detail. You won't be able to get a clear answer in a forum like this.

 

Private investors start at about 10%pa with payment on completion. Banks are relatively cheap but want to see presales or monthly repayments. Most solicitors have a bank of private investors on their books.