Selling off the plan

[Kiwibaz]

Hi,

I'm currently looking at undertaking a small development of 3 or 4 units in WA.

Partly to raise capital and partly to reduce debt I am considering selling one or two off the plan.

Does anyone know the ins and outs of doing this? In particular when and what amounts of money change hands and at what stages of the building process.

Thanks

Baz

 

[QualitySetts]

Hi Baz

There's a few different ways of handling the process, depending upon exactly how you want it to work and what you want to get out of it.

Usually the buyer pays a deposit upon signing of the contract (which is held on trust) then the balance of the funds are not paid until settlement - which occurs once the buildings are entirely complete and ready for the buyer to take possession of.

So, if I understand correctly what you are trying to achieve, selling a couple off the plan would probably make it easier to raise capital if you are obtaining finance through a bank (if you can show them signed 'off the plan' contracts the bank are more likely to allow you to borrow funds), however if you are trying to reduce debt by getting some cash in the hand, unfortunately you wont receive any until the settlements have been completed.

We do have someone in our office that specialises in these sorts of arrangements and could probably give you several different options that might suit your purpose, feel free to give me a call if you like (9481 8811). I can give them a run down on your situation and they could give you some advice.

Jenny
Quality Settlements

 

[Ausprop]

yeh selling off the plan won't help your capital situation - just gives the bank a warm fuzzy knowing they have a plan for repayment of debt

 

[sanj]

are they survey strata or built strata? if you're short on capital could you sell some as a house and land package? this way you settle on the land now instead of later