Investment Loans - Property Development

rj

rj

Hi guys,
Im just wanting to know if there are dedicated organisations out there that provide lo-doc or no-doc investment loans for property development projects specifically?

How is it possible to acquire a considerable loan when the banks so "no" basically? Is it possible to avoid the whole "provide 2 payslips, proof of income" etc

Could someone please offer some advice here?

Thanks,
RJ
 
Hi RJ,

Development finance takes into account the figures for the deal, the collateral put up and your track record.

Your personal servicability is close to irrelevant.

Suncorp are one company up your way that do it.


rossv
 
Thanks Ross - I was just looking at Suncorp actually. Got a bit lost so decided to ask here first. Thats an interesting point you raise regarding serviceability.

I guess theres no sure way of knowing without asking but how attractive would myself and my partner be if we were to approach a lender given the following circumstances.

1. Approximately $200,000 in cash and equity.
2. I am currently about to commence a 12 month contract (employment) Have been unemployed for 3 months.
3. We have no track record - just starting out
4. We are wanting to take on a development of approximately 6 townhouses/units.

RJ
 
Hi RJ

Yes there are organisations that provide nodoc / lodoc funding for property development but like anything the LVR will be reduced and you will pay a higher interest rate.
 
Hi RJ,

Ross is correct in that generally development financiers look at the numbers of the deal, and the lend is deal specific. they don't take a look at your income/servicability unless you tell them you want to hold one/some of the end product.

I have dealt with suncorp in the past and found them terrific.

Be cautious about taking on a development of that size with little or no previous experience. And given the little experience you've had, you may find that the lender may not come to the party.
 
Thanks Joanna,
I am aware of the points youve given. Im not quite sure of the project size initially. You know me Joanna - I want to get in and kick ****! However in saying that am quite sensible and will take the time to do this right.

Lyn is organising a developers luncheon up here in Brisbane which is taking place tomorrow. Its all tied in with local council etc. Should be good, Ill let you know how it goes.

With any luck a few leads may come about from it.

RJ
 
Also while on the topic of developments, is building a house to onsell for investment purposes considered a development project ?

RJ
 
hi ramone_johnny
different banks are good for different types of developing nab and st george for me are the best for house and duplex projects.
at 6 town houses any of the banks will lend if the numbers are right.
at 20% profit margins with a 6 town house site you are over the 2mil in a loan and they are going to ask for presales unless your equity position over come this ( needs to be about 1mil in equity or cash and then maybe no presales)
and looking at your numbers it doesn't so you need to factor in at least 2 presales.

all bank are continually changing there exposure to the developing market place
so you need to talk to them each
but first you need to put together a business plan similar to if you were selling a business
so all the cost, builder, marketing, sales figure,
you are better then me gungadin to take on anything larger then a duplex in the first try.
my .002
 
hi rj
heres a list of what you need to put together when you got them send me a pm don't need the address and will send you back the way to present. if you want you can post the numbers here if you don't have a problem with that.
I wouldn't post until I have the project dusted but thats me
List of things for developing lending.

Name of site
Land value ( valuation if possible and use a company that is on most lenders panels)
Land purchase price
two different real estate companies pricing of sales of the new building at today rates
cost analysis including projected cost of legals, 5% contingencies, council fees, stamp duty on purchase and sales.
Fixed price contract if constructing your self projected costs must be very detailed
Cv on builder
Cv on developer
Cv on projects completed and qualification in this market.
Presale contracts or marketing plan for presales if needed.
Projected profit margins and how they are derived.
Exit plan or procedure.
 
hi rolf
couple of things it looks like a very interesting programme
do you join and then down load
or do they send the programme and is it a one off fee.
and have you or your clients used the programme.
it is very similar to a few that i have seen and alot more complicated then the one I use but seems like some thing that I could use just would like to know someone else that has used it and it there any cliche's in it.
 
I use Devfeas all the time, and most of the bank panel valuers I know also use it. I've been using it for about 4 years now. I also have my own spreadsheet feasibility that I use in the early stages to determine whether or not a project is worth pursuing, but that doesn't include cashflow projections.

It's a once off purchase cost (which isn't expensive imho), with regular updates available by download.

It's very easy to use, and also generates several sensitivity analyses and allows for escalations in costs, and part paydowns as properties settle.

It comes with a comprehensive manual, but I'm sure I don't use it to it's full capacity.

There is a trial version available to play around with.

PS: I'm not associated with the developers of the software in any way.
 
Hi Grossreal,
you'll have to complete the order form, proceed with the payment and then you will get the download instructions via e-mail.

Yes, some of my clients and myself are using it and are very happy with the software.
 
Great thread thanks for the links

Has anyone used Ayton Taylor ( WA ) for any town planning or development appraisal advice???

regards Johny
 
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