Hi all, i have plans and permits for a unit at the back of the an investment property (corner block). While looking for finance, contacted loans.com.au. I was told they will not finance for two buildings on same title. I have to subdivide first. Is that how these developments are normally done?
loans.com.au will not help with Unit development until subdivision first
- Thread starter MelbInvestor
- Start date
In most cases, subdivision is done after the construction is complete.
Thats encouraging.
Apart from the big 4, which others should I try?
Apart from the big 4, which others should I try?
I think it's best to talk to a broker about your situation.
Because I found even you go to branch of any banks/lenders, many of their staff do not know and can not help you about your project.
You will be surprised many of staff in banks do not know what they are doing.
Why not give Peter a call, see if he can help you with your project.
Because I found even you go to branch of any banks/lenders, many of their staff do not know and can not help you about your project.
You will be surprised many of staff in banks do not know what they are doing.
Why not give Peter a call, see if he can help you with your project.
Any particular reason why you want to avoid them?
It's impossible to comment on which lender to recommend without knowing the finer details of your situation.
Perhaps hit up Pete T above for a fact finding session - he's a pretty clever dude and is based in Melb too.
Cheers
Jamie
Not all the majors will do it the same way - e.g. ANZ is max 70% on anything that is more than 1 dwelling.
I think you will be somewhat guided by what the valuation comes back.
I think you will be somewhat guided by what the valuation comes back.
This was my understanding as well. Whilst subdivison during or after completion makes the most sense, if the borrower does not have enough funds/equity to cover the lower valuation of two properties on a single title then they may have no other option but to subdivide first.
E.g. Current Value = 500k, Current Loan = 200k
Estimated Value of subdivided properties on seperate titles = 800k
Subdivision costs = 30k
Construction costs = 270k
So in this scenario the total end debt would be 600k with an LVR of 75%.
But it is my understanding the valuer will not value them at 800k before subdivison and given very few comparables of 2 dwellings on a single title the value may come in significantly less. This may then push the LVR up around 85-90%.
If however the borrower releases the 30k equity and subdivides, they can that get new valuations on the seperate titles and have a much lower LVR.
