Hi all - a newbie here...
Firstly, this looks like a great forum full of some great opinions so I thought I would post this in the hope that we get some more 'creative' advice than our lending institution have been able to offer us thus far.
We are wondering if anybody on the forum has any experience in financing a warehouse conversion?
We have found what we consider a fantastic opportunity to create something that is uniquely our own in a great inner suburb of Melbourne.
The property is an old garage and warehouse that is currently in the process of being sub divided from a big old house on a large block. The lot will be 169m2 and the agent is asking around $430,000.
The property is zoned residential but has never been inhabited (as it is not a dwelling and has no real services). As part of the subdivision the vendor will supply water, sewer and electricity connections.
We would plan to engage professional contractors to essentially establish base building to a level of occupancy - New roof, underpinning of the floor, water, sewer and electricity. We have estimated that this could be done to a base level for around $50-60k. We would then move into the base building and slowly undertake the rest of the works ourselves to save money and not have to keep up rental payments on our apartment. This is certainly a massive undertaking but a project we are exited about.
Theoretically to my understanding the loan structure shouldn't be much different from financing a new build on an empty block of land. However we are struggling to get more 'creative' advice on how to finance the purchase of the property and the improvement works (430K + 60K). One lender has suggested that as the building does not have certificate of occupancy that this makes the situation more complex that a loan for a house the needs to be renovated for instance. I don't understand how it would be different however from purchasing a block in a similar area and then planning to build a new house on it. My - probably rather simplistic view - is that essentially we are paying more for a block of land and then less for the building (as we have a base building). The other trick is that the vendor/agent are unlikely to accept offers subject to planning/building permits - which another lender has noted would be necessary for a loan of this type.
So, any feedback from members with experience doing warehouse conversions or anything similar would be fantastic.
A little more info about ourselves...
I am an Architect and my girlfriend works for a construction company that does mostly office fit outs.
We have savings of around 80K and earn combined annual income of $180K gross.
I look forward to your responses.
Kind Regards,
Sam
Firstly, this looks like a great forum full of some great opinions so I thought I would post this in the hope that we get some more 'creative' advice than our lending institution have been able to offer us thus far.
We are wondering if anybody on the forum has any experience in financing a warehouse conversion?
We have found what we consider a fantastic opportunity to create something that is uniquely our own in a great inner suburb of Melbourne.
The property is an old garage and warehouse that is currently in the process of being sub divided from a big old house on a large block. The lot will be 169m2 and the agent is asking around $430,000.
The property is zoned residential but has never been inhabited (as it is not a dwelling and has no real services). As part of the subdivision the vendor will supply water, sewer and electricity connections.
We would plan to engage professional contractors to essentially establish base building to a level of occupancy - New roof, underpinning of the floor, water, sewer and electricity. We have estimated that this could be done to a base level for around $50-60k. We would then move into the base building and slowly undertake the rest of the works ourselves to save money and not have to keep up rental payments on our apartment. This is certainly a massive undertaking but a project we are exited about.
Theoretically to my understanding the loan structure shouldn't be much different from financing a new build on an empty block of land. However we are struggling to get more 'creative' advice on how to finance the purchase of the property and the improvement works (430K + 60K). One lender has suggested that as the building does not have certificate of occupancy that this makes the situation more complex that a loan for a house the needs to be renovated for instance. I don't understand how it would be different however from purchasing a block in a similar area and then planning to build a new house on it. My - probably rather simplistic view - is that essentially we are paying more for a block of land and then less for the building (as we have a base building). The other trick is that the vendor/agent are unlikely to accept offers subject to planning/building permits - which another lender has noted would be necessary for a loan of this type.
So, any feedback from members with experience doing warehouse conversions or anything similar would be fantastic.
A little more info about ourselves...
I am an Architect and my girlfriend works for a construction company that does mostly office fit outs.
We have savings of around 80K and earn combined annual income of $180K gross.
I look forward to your responses.
Kind Regards,
Sam
