Purchasing a block then building

[strongy1986]

Morning

We are looking at purchasing a regional block - circa 80k and then putting units on it - 320k

Question is

If we borrow to buy the block and then want to put transportable units on it what sort of control will the bank have over the development?
We will be selling another block in about 6 months and we should have about 200k to put towards building costs

Cheers

 

[Aaron_C]

Well finance for the land is as per normal but for the construction you can't do it. Need to use equity from your other properties.

 

[strongy1986]

Well finance for the land is as per normal but for the construction you can't do it. Need to use equity from your other properties.

Is that because they won't provide finance at all for a transportable (modular homes built in factory and trucked to site)

 

[Aaron_C]

Is that because they won't provide finance at all for a transportable (modular homes built in factory and trucked to site)

That's correct. Banks only fund (directly anyway) conventional construction methods.

 

[strongy1986]

Well finance for the land is as per normal but for the construction you can't do it. Need to use equity from your other properties.

Is that because they won't provide finance at all for a transportable (modular homes built in factory and trucked to site

Yet if I have the cash to build myself I can do whatever I want?

Do banks let you refinance a property with a modular home on it?

 

[Aaron_C]

Yet if I have the cash to build myself I can do whatever I want?

Yes but technically you are not supposed to modify the security (ie. vacant land) without their permission but if you use your own cash who's to stop you?

Do banks let you refinance a property with a modular home on it?

As long as it is a habitable dwelling and complies with the building code I don't see why not.