Commercial Vs Residenttial Finance

[boods99]

One for the brokers out there;
Over the last few months I have been looking at areas that are ripe for redeveloping, ie buy a house on a big block, bowl it over and build 3 units.

I had always thought that if you keep the number of units to three, then you do not have to go commercial as far as loans are concerned. Now someone has told me that you can only build 2 otherwise you need to go commercial.

Is this just certain banks or is it prettty much accross the board.
I'm just not that keen to jump through hoops for the bank in regards to financing this development.

Boods

 

[Qlds007]

You should be fine with 3 units on the same title (in fact doing one just this week for a client) and get it considered residential with the right lender.

Couple of the majors want to maximise it to 2 but it is not the cup of tea.

Keep it to 80% and you should not be paying anything more than standard pro pack rates.

 

[pi2012]

We are also doing a 3 Units development and just spoke to MB this week. He will try to get us 80% of the finished value of the Units for construction since the house was purchased 1.5 years ago which will be demolished. And all this thru residential lenders. Keeping fingures crossed.

 

[boods99]

You should be fine with 3 units on the same title (in fact doing one just this week for a client) and get it considered residential with the right lender.

Couple of the majors want to maximise it to 2 but it is not the cup of tea.

Keep it to 80% and you should not be paying anything more than standard pro pack rates.

At the monemt I'm with CBA (colonial)...is this one of "those" ones that are trying to limit it to 2?
Boods

 

[Qlds007]

Yes them and Wotpac.

 

[pi2012]

You should be fine with 3 units on the same title (in fact doing one just this week for a client) and get it considered residential with the right lender.

Couple of the majors want to maximise it to 2 but it is not the cup of tea.

Keep it to 80% and you should not be paying anything more than standard pro pack rates.

We've done our Valuation from one of the Bank's Panel Listed and MB is now approaching the Banks to lend us 80% of the finished value for construction.
Is this a possibility for 3 Units?
Does the Units need to be subdivided first or can this be done on current Title and later seperate on 3 Titles.

 

[pi2012]

You should be fine with 3 units on the same title (in fact doing one just this week for a client) and get it considered residential with the right lender.

Couple of the majors want to maximise it to 2 but it is not the cup of tea.

Keep it to 80% and you should not be paying anything more than standard pro pack rates.

May i ask you if 80% is the Finished Market Value?
Which Bigger Banks are doing more than 2 Units.
Thanks in advance Richard.

 

[pi2012]

Is anyone here expert in Development Loans?
3 Units...help please

 

[Qlds007]

No It is not 80% of Gross Realisation.