Hi all, first time posting thread here and wondering whether anyone can help me this.
Background:
I am doing my very first project in east Melbourne. The propety was bought at 500K+ (80% loan) and I am looking into a 3 townhouses development. The project has now in council awaiting for town planing permit. And I am expecting construction cost is around 700K.
The bank:
I have been in talking with bank manager several times. And got different answers everytime. First time he said 80% of construction cost, then he changed to 80% of completion value. Then he said I need to sign up the construction contract first then then he can look into the loans... I am so confused.
My questions:
1. How much on earth can I borrow on contruction loan, is it 80% construction cost or completion value?
2. Do I need to sign construction contract first before going to bank for loans? (this is doesn't make sense to me as how can I sign up contract without satisfying myself the finance?)
3. The banker kept asking me will I hold three or do I sell them, would this matter for loans? If I tell him I want to sell, will the bank ask for pre-sale for approval the loan? (I dont want to go pre-sale, as normally the price wont good)
Kindly for your help!!!! Thank you first!!!!
Shirls
Background:
I am doing my very first project in east Melbourne. The propety was bought at 500K+ (80% loan) and I am looking into a 3 townhouses development. The project has now in council awaiting for town planing permit. And I am expecting construction cost is around 700K.
The bank:
I have been in talking with bank manager several times. And got different answers everytime. First time he said 80% of construction cost, then he changed to 80% of completion value. Then he said I need to sign up the construction contract first then then he can look into the loans... I am so confused.
My questions:
1. How much on earth can I borrow on contruction loan, is it 80% construction cost or completion value?
2. Do I need to sign construction contract first before going to bank for loans? (this is doesn't make sense to me as how can I sign up contract without satisfying myself the finance?)
3. The banker kept asking me will I hold three or do I sell them, would this matter for loans? If I tell him I want to sell, will the bank ask for pre-sale for approval the loan? (I dont want to go pre-sale, as normally the price wont good)
Kindly for your help!!!! Thank you first!!!!
Shirls