Newbie to forum - struggling to learn about GRV based finance options!

Hello folks,

This is my first post on Somersoft! I searched the forums but couldn't find where new people post to say 'hello'. :eek: I hope you don't mind me posting here.

I've been reading through the Property Finance part of this forum and you've all given such a wealth of knowledge, thank you! The Somersoft photo gallery is fantastic inspiration too. :)

I wish I'd found this forum earlier!

The challenge: I have $900k gross value holdings at the moment, and get about $1145 gross rent per week (residential property). Buy, reno/blocksplit, and hold has been good up to now, but my next challenge is to learn about construction finance for small scale residential development (GRV etc) because my bank will not lend against GRV through traditional retail loan products :mad:. Totally stuck! It's all new! I'm living in Central Queensland Coast and would love to meet like minded folk around here too! :cool:

Anyway, I just thought I'd post to say 'hello' and thanks for the info. :)

PJ
 
hi
grv lending is still available
you have to find a comm broker that has lenders still doing it
there are a few private funds still doing grv lending
 
Yea lending on GRV is still around, just did a deal for $6m on a GRV of $13m, interest Rate is 10.5 or 11.5% cap, meaning interest is added to the outstanding loan.

Was not through a bank but.

Regards,

Alex
 
Concur with grossreal - you need to talk to a commercial lender who is familiar with this niche. That probably (but not necessarily) means dealing with a larger firm in a city rather than the local/suburban broker or banker, but there's no reason why your broker needs to be nearby. I've had a couple of brokers fund deals for me, without my ever having met them. :)

PS Welcome to the forum, and well done on having a very specific goal!
 
Thanks ozperp, Evachange, and grossreal :)

Capitalised interest during construction sounds very attractive Evachange. What type of lender was this? Personal connection, non-bank org, or other? If you point me in the direction, I can see if it might suit my own strategy. Please?

Cheers,
PJ
 
Hi,

The firm I went through is a Mortgage Manager, called Global Capital Corp, don't really know much about them apart from the fact they would do the deal and the banks would not, but them the client had no deposit, no tax returns and so thats the reason for going to them.

You can do a search for the web site via google.

The loan is for 12 months only and so on completion they either sell or refinance with more traditional type of loan.

The deal is for a property in Sydney CBD and is very unique.

Hope this helps.

Kind Regards,

Alex
 
I have done about half a dozen deals thru Global Capital and whilst your deal PJ might be on the slightly small side for them at circa 60-65% GR probably something they can assist with.

Unlike a resi deal though a lot more information would be needed upfront.
 
Thanks QLDs007 and Evachange. I'll check these out.

For now, I thought I'd offer a bit of an update. I haven't secured traditional GRV product, but I've found a way to move forward, which is kind of a work around...

I negotiated with my supplier so that I don't have to make installments. They'll be paid in full subject to an inspection after completion of the house. I nearly jumped out of my skin with joy when they said 'ok' as long as I give them a letter of finance pre-approval from the bank. That gives them a pretty strong incentive to complete asap (estimated time 16weeks from bank's letter) I guess. Not THAT's a supplier who is confidend in their product. Good on 'em, I wouldn't do it if I was them...

This changed things with the bank.

The NAB have said they'll come to the table with a normal mortgage interest rate (around 5.07% for me), with pre-approval based on the GRV from pre-construction valuation against the house (using the plans) & the land. As long as the house is built as per the plans, they'll release the funds on completion. *PJ does a jig*

Happy days! But, while this works for a house, I doubt this strategy will carry me through into multi res deals. If any of you know of a builder who'll undertake a $3Mil construct without installments, please let me know... ;) LOL But still, I thought you might be curious about how things are going.

And so I've learned a work-around, but I still haven't figured out GRV finance...

I hope all your deals are going well.

Have a great weekend!
PJ
 
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