hi all,
Looking for some advice please.
I have a 420 sqm block in Flemington, VIC with an old 50's yellow brick house. I'm looking at knocking this down, subdividing down the middle and putting up a two double story townhouses side by side (shared wall), with each about 22 squares, 3-3.5 bedrooms… looking at a nice executive style townhouse finish to suite the neighbourhood.
I did once have townplanning approval, but it lapsed (as I went overseas to work for a few years)…I now want to resurrect this dream of mine. Idea is to sell one and live in the other (I'd like to keep both and rent the other out…but I dont think I can afford it)
Now my specific question is how to best go about attempting to finance this… I have been getting indicative quotes to build the two for around 600k.
I dont think I can borrow that much on what I already owe.
As I see it, I have the following options
1. Push hard to see if I can borrow this…perhaps committing to selling one "off the plan"? I believe banks will then look at this as a 'business loan" rather than a construction loan?
2. Enter into a Joint Venture with a builder…whereby I sell one subdivided block on to the builder, and he builds both units, one for himself and one more me….If I do this, any reason why I cant discount the selling of the block in return for a discounted build cost? seems like a win-win?
3. What about trying to find some venture capital to help fund this?
Might there be any other options that I have missed??
Hope some one can lend their thoughts.
Regards,
MustafaHi Mustafa,
May I suggest that you have a look around in the finance section of the forums here: https://www.propertyinvesting.com/forums/getting-technical/finance
There’s a wealth of experts and knowledge there so I’m sure your questions can be answered. I would also suggest having a full feasibility and costing study done by a private town planner (if you haven’t had one done already).
Good luck with the project!
Cheers,
Mustafa,
Firstly, it's often difficult to "resurrect" a town planning application that has lapsed. Get in touch with council and seeks their views on this application in the context of any changes to the planning scheme which may have occurred.
If you are looking to subdivide down the middle – as you put it – it may be possible to subdivide the land before you build and sell on part of this land to someone else, perhaps even a builder, before the project starts.
It is possible to enter into a contract for the sale of the land along with a contract to build. That is to say, you can agree to a contract amount for the building of both dwellings then sell part of the land to a second party. You and the second party then effectively "split" the building contract into two parts.
Best of luck with the dream!
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