A tricky question requires lateral thinking

Here is a financing question some of you brokers may well have come across. I have purchased land with a value of 2.5 million and constructed to date, 16/ 3 bedroom villas we are selling at $160,000 each. We are aiming to construct a further 16 before Jan.

We require a further $750,000 to allow us to do this but even though we have 16 constructed villas (sold 2) in the past couple of months, the banks do not consider the villas as part of property improvements as they claim the villas are transportble (theoretically). We have offered a mortgage debenture over the villas.

If they include the villas in our security, we will owe 3 mil but have property to 7 mil.- and we have a permit for construction of 200 villas in total. We have an excellent history with banks and income from other projects to sustain it. But we want the project to stand alone and not require equity from other sources.

I can’t see what the bank has to lose. We will also be keeping a good deal of the villas ourselves for holiday apartments. The area is in one of the fastest growning areas in Victoria and has enormous potential. We believe in 6 months the project will be self funding at which point they will be falling all over us.

Any suggestions??

jmn