Hi All !
My wife and I have got a property which we had for several years , we resided in the residence though have moved out and have the property rented out . The land is classed as res B and we are considering of removing the house and constructing 4 townhouses on it . (house/land value current 110k ) Aprox cost to construct 4 townhouses is 600k . With other assets 80k in equity would this be enough to obtain a loan so building can commence . [
]On this information you have a possibility of finance. I really need more info to give you a better idea.
With this sort of deal you really need to talk it over with a mortgage professional.
Good luck,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Investor,
From a broker perspective if you intend to sell all/most of the units you may be able to get a short-term commercial loan based on about 70% of the final value of the 4 townhouses, hopefully covering your full construction costs. The lender will want to see experience in this type of development (personally or through the builder you employ) and possibly pre-sales of 1-2 of the townhouses, but still potentially lucrative if sale prices in the areas for this type of dwelling stack up. The minimum profit margin developers target is about 25% to allow for any contingencies like approval or building delays etc so make sure your numbers stack up first – a value of only $110K for your current house and land sounds a bit low so if that’s standard in the area you may have problems.
That’s my two cents worth anyway. Good luck!!
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Mel
[email protected]
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