My business partner and I are currently doing block splits and builds in the Brisbane area and we are having trouble organising finance that can be rolled from one project to next. It is expensive to organise new stand alone finance for each new project. Does any one have a solution?
Cheers
David
Hi David
Have you passed this by a broker?? I think a broker that specialises in property investing/development would know how to get around this. PM me if you would like the name of a broker that I have heard great things about in Brisbane (so would know the ins and outs of the Brisbane situation).
Cheers,
Hi Guys
happy to assist if you need although I am in Melbourne. I am an Aussie Home Loans Franchise Owner in Melbourne with 8 years experience in both residential and commercial lending. I am doing a 4 unit development myself and I have many clients doing anything from renos to 7 unit developments. If you are setting up the finance in the residential lending space then I am not sure why you are running into sustantial fees for setup and exit, depends on how many units you are doing at any one time. Obviously commercial lending is more expensive. One of my clients have just completed a 7 unit development - sold 4 of them and retained 3. We then gave him 80% of the value of the remaining three units in a line of credit, so then the next development is done mainly on residential lending rates. so to keep the commercial lending amount as small as possible. you have got to demonstrate the ability to service the debt though and if your income is derrived from buying and selling, then this will push you into commercial lending space.
Hope this helps
regards Adam
Thanks guys. I have found brokers are reluctant to source funds because of the short term nature of the lending. A project will only take 3 to 9 months and the funds are paid back. The brokers do not receive anything from the lenders and if they have, it is clawed back. We have found, going direct to the banks, they have pushed us into commercial lending, hence the ridicules fees.
ChrisA if you have a broker in Brisbane who might be able to help, that would be great. My contact dgbiggs@iprimus.com.au
Tks again
Hi David
I sent you an email. Tell me if it doesn't come through.
Cheers,
there is no clawback for loans originated through NAB for brokers. Not Homeside but NAB. I have done plenty of construction through NAB and they can go to 95% with up to 4 units on one title with subdivision completed later, if you can survive the credit score.