Well Dave,
There is a lot to cover... Not sure where to start.
What is your experience in putting together something like this? That's probably the first question the banks are going to ask you. How much cash do you have to put in yourself? Have you secured the site?
Without going in to too much detail there are many variations available in finance. Gross realisation finance can work wonderfully well if your deal is a corker.
Lets say your purchase price is $1m
Your construction is $3m
and your estimated GR is $6m
In its simplest form, a private funder will give you 75% of $6m which is $4.5m. Ok, so this is looking good. But, then it get's complicated. They will cap what they call the land bank (the loan against the land itself) at 75% of valuation at purchase. So in this case that would be $750,000 so the key is to be able to add value to the land prior to settlement. This could be done through any kinds of means like getting a DA through or having an offer on it for greater than you paid.
The next thing is they cap your interest in. That means instead of borrowing $4.5m you'll actually be boworrowing (say 3.8) and having $700 available for interest purposes.
They will also most likely proceed with the finance when there is a DA in place for the land.
Another thing to note is that you pay through the nose for this money. Application fees are HUGE, like up to 5%, interest rates are between 10% and 20% however the benefit is that you don't need financials, nor pre-sales. We've found whenever using something like this that the growth through the construction period can add up to 40% to your final return.
There are all kinds of versions of this, right down to the conservative bunch of mainsream banks.
Hope this helps.
Rgds,
Dave.
