Total Members: 158,199

Rhys Adams

  • Rhys Adams replied to the topic Commercial financing for a property development in the forum Value Adding 9 years, 3 months ago

    Hi Alfresco

    A bit of time has passed since you posted your questions but I thought I would answer nonetheless.

    Some key concepts of ‘commercial’ development funding:

    – Presales – banks will typically require a level of presales prior to funding construction. As a general rule net sale proceeds (sale prices less GST and selling costs) will need…[Read more]

  • Rhys Adams changed their profile picture 9 years, 5 months ago

  • Rhys Adams‘s profile was updated 9 years, 5 months ago

  • Rhys Adams replied to the topic Commercial Loan in the forum Commercial Property 9 years, 6 months ago

    Hi QM

    A typical loan for commercial property will be short term, say three years. This is driven by lender’s cost of funds with longer term capital being more expensive. As an example, we obtained quotes recently for a client for a 3 or 5 year facilty which were priced with a 0.47% spread between them.

    Loan term can also be tied to the lease…[Read more]

  • Rhys Adams replied to the topic Finance for construction of 6 townhouses in the forum Finance 9 years, 6 months ago

    Hi Shane

    A private lender would be the place for what you are looking for (except for interest rate).

    This sounds to be a pretty straight forward transaction where you could achieve the following loan terms:
    – Interest rate – 10%
    – LVR – the lower of 80% of Total Development Cost or 70% of Gross Realisation (excl. GST)

    The higher cost of this…[Read more]

  • Rhys Adams replied to the topic Subdivision development finance in the forum Finance 9 years, 6 months ago

    Hi Terry

    My comments re granting of mortgages were based on the exercise of the option and subsequent settlement and transfer of title.

    Cheers
    Rhys

  • Rhys Adams replied to the topic Subdivision development finance in the forum Finance 9 years, 6 months ago

    Hi Cheryl

    There are a number of unknowns here so will try answer some questions in general terms:

    Will the sale to the builder be considered presales for traditional funding? Generally no, the list of conditions for a sale to “qualify” for “traditional” funding is usually a couple of pages long. To quote directly from a Terms Sheet of one of the…[Read more]

  • Rhys Adams replied to the topic Planning to buy a a new building in the forum Commercial Property 9 years, 6 months ago

    As suggested by Terry, we have seen a lot of self employed business people using their SMSF as an investment vehicle to buy premises from which to operate their business.

    The ability to do so is obviously dependent on the availability of capital yor boss holds within super but given the relatively low price he is looking to pay there may be…[Read more]

  • Rhys Adams replied to the topic Townhouse development finance needed in the forum Finance 9 years, 7 months ago

    Hi Steve

    Your project will be easily funded with or without presales.

    Presales reduce the risk to the developer, not just the lender but I would go down the no presale path unless you have a negative view on the market as you’ll be able to achieve better sale prices marketing the completed product. At the proposed leverage you are proposing,…[Read more]

  • Rhys Adams replied to the topic what type of commercial building would you buy in the forum Commercial Property 9 years, 8 months ago

    Hi Keiko

    If you’re looking for passive investment I’d be looking for a property with a long term lease to strong tenant. There is more profit on offer with the vacant/near expiry strategy but commercial property is not like resi where vacancies are easily filled and this strategy might be best left to more experienced investors in this asset…[Read more]

  • Rhys Adams replied to the topic $1 Million Dollars – How to spend wisely!? in the forum Help Needed! 9 years, 8 months ago

    Hi BNS

    Just another investment strategy for consideration given your objective of retirement in 15ish years would be commercial property.

    $1m of equity combined with debt should provide capacity to invest in commercial/industrial property with a decent tennancy profile. Yielding +8%, lock in borrowings <5.50% and you have a positively geared…[Read more]

  • Rhys Adams replied to the topic Buying a Commercial Property -Strata Title in the forum Commercial Property 9 years, 8 months ago

    Hi QM

    Is the property for investment or occupation?

    If its for investment the lease covenants would be the most critical aspect? ie strength of tenant, what security is in place, remaining lease term before expiry, who pays outgoings? And almost forgot, how much rent are the obliged to pay?

    The above aspects, inparticulary rent and lease term…[Read more]

  • Rhys Adams replied to the topic NEW PURCHASE in the forum Commercial Property 9 years, 8 months ago

    Hi Amelie

    As long as the business and your partner can show sufficient income to show debt servicing and you have 30% equity to contribute to the purchase (plus costs) you should been in a position to finance the property.

    Cheers
    Rhys

  • Rhys Adams‘s profile was updated 9 years, 8 months ago

  • Rhys Adams replied to the topic Commercial Property in North Ipswich in the forum Commercial Property 9 years, 8 months ago

    Hi Tranquilles

    To be able to give a ball park valuation can you provide a few more details?:
    1) I assume the 800m2 refers to the land size rather than lettable area, if so, what is the lettable area?
    2) How long until lease expiry?
    3) Does the property have an industrial or commercial use?

    Understanding the above I’ll be able to refer to some…[Read more]

  • Rhys Adams replied to the topic NEW PURCHASE in the forum Commercial Property 9 years, 9 months ago

    Hi Amelie

    Your solicitor would be able to provide the best advice but perhaps a trust structure where you are a beneficiary may work and provide you with some protection?

    In what structure do you operate your business together?

    You also need to be mindful of stamp duty ramifications for you to add your name on title down the track.

    Where are…[Read more]

  • Rhys Adams replied to the topic Using land as collateral for construction in the forum Finance 9 years, 9 months ago

    Hi Benny

    There are a couple of ways that you can look at construction funding, either traditional bank funding or through “Private” lenders.

    To answer your first question, when looking at construction funding a lender will consider two ratios:
    1) % of Total Development Cost (TDC)
    2) % of Gross Realisation (GR) (which as Richard pointed out would…[Read more]

  • Rhys Adams became a registered member 9 years, 9 months ago

Rhys Adams

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