Off the plan finance

My wife and I are about to put plans into council for a 2 lot subdivision, however it looks like we are going to be on the one wage when construction time comes, so we wont be able to get a straight out construction loan from a bank (even though we could easily afford the repayments with the savings we have).

I'm wondering if we sold the units off the plan, would this help with finance? Is there anyway we could get the buyer to pay for the building progress payments?

Any help would be greatly appreciated!
 
I would first speak to a decent banker or broker as you might find that you can service the debt even on 1 income. But if required you could likely look at a bridging construction loan.
 
Finance Alternatives

...I'm wondering if we sold the units off the plan ... could ... the buyer ... pay for the building progress payments?

Hi LL78

In a short answer, No.

In this instance you are the owner (developer) and will engage a separate builder to build the dwellings

The usual construction contract requires a deposit plus 6 stage payments. These are your responsibility as the contract is with you

Your buyer pays the agreed deposit which can be no more than 10% of the purchase price and which must be put into a trust account. The deposit is unsecured, that is why the money must be held by an independent stakeholder on behalf of the purchase and the vendor.

When the plan of subdivision is registered, there will be new titles issued and settlement can be completed. Until then, there is no separate title for the new properties and you cannot access any of the money until you can hand over the title to the property.

There are plenty of sources of finance which don't necessarily rely on income so talk to your broker about the options which may be available to you

Hope this helps
Kristine
 
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