Finance options for 4 Townhouses on End Value ?

[PropertInvestor]

Need finance to build 4 townhouses - after reading some posts it seems St. George does it and on END VALUE

1. It seems St. George usually have lot of issues. What are those issues ?

2. What are other options on END VALUE - 4 townhouse

Pls suggest options !

Note: Already sent details to my broker, but thought to post here to get options from different perspective. Also, it is early morning

 

[Rolf Latham]

Need finance to build 4 townhouses - after reading some posts it seems St. George does it and on END VALUE

As is sometimes the case, qualification of what has been said in the past and what is being asked about now is important.

This just from my experience.........

Most lenders will do construction on a GRV basis - on commercial terms and LVRs of 60 to 70ish on a great day.

There are some private lenders that may do 80 % ................though the rates and fees will make your cry

While lender X may do ABC on this basis or that basis, this tends to be very deal specific and can in no way be relied upon to make buying decisions

Im sure someone will correct me, but I know of no resi based lenders that will do 4 unit construction on GRV on anything like a decent resi LVR IE 75 to 80 % on the end individual unit GRV on a consistent basis

Those that do, will usually do up to 70 to 80 % LVR on the In one line valuation (IOLV), if the land val supports the core loan.

Typically an IOLV val will be discounted by 25 to 30 % from end value, thus,on a typical 20 % + margin build you get a 70 to 80 % lend on Cost to Complete.

With 3 units its a little more predictable because with some lenders that do these you will have LMI available, with max DUA of up to 2.5 mill

ta
rolf

 

[Shahin_Afarin]

Rolf is correct.

St George will only do end value for 4 units (or any numbers of units less than 4) provided that:

1. You go via the direct channel (brokers do not have access to this)

2. The DA has provision for subdivision post construction. Most DA's would be staged DA's in that the council will want you to build first and then subdivide (strata/green or torrent title)

Pros and cons w/ St George:

1. If the construction value is over $1mil then you will need to ascertain QS report and ongoing QS inspections. Customers needs to cover this. Cost can range but you are looking at around $5,000 all up. Valuation is a long form report and expensive but covered by St George

2. They have quite a poor post settlement process, e.g. they often forget to set up offsets so we essentially call the bank up upon settlement and almost always need to set this up manually. But you will find similar issues with other lenders give or take. I don't think this is a big issue in the scope of what you are doing with them.

 

[Mick C]

^ Spot on!

Good post Shahin.

 

[PropertInvestor]

Rolf is correct.

1. You go via the direct channel (brokers do not have access to this)

Thank you Rolf & Shahin !

Shahin - Can you please provide more details on direct channel, how does it work, criteria ?

 

[Shahin_Afarin]

Thank you Rolf & Shahin !

Shahin - Can you please provide more details on direct channel, how does it work, criteria ?

There is no particular criteria - just like anything you need to talk to someone who knows what they are knowing and more importantly has done similar type applications.

Happy to provide you with the person that I deal with if you and the development are based on the sydney.