Hi all,
I am interested in getting involved in property development, primarily units. The problem is that although I have a sizable cash deposit I could contribute towards the deal I do not have a tangible income stream. Is there a way of somehow offsetting the interest charges until the end of the project as I could not comfortably carry the burden of a construction loan on top of my current commitments. Can anybody possibly advise on lenders that may be able to assist.
Best regards,[eh]Hi
It would depend on your level of cash deposit. If there is enough equity in the deal, many lenders would consider capitalising the interest. But you could also reduce the amount of cash put in and then use the remainder to fund the interest.
Terryw
Discover Home Loans
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Capitalise the interest and also go for a lodoc / nodoc commercial development loan.
A little higher rate but still very do able.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
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Hi Charlie,
It is common that developers of sizable projects are not in a position to service their end debt, so lack of income is not really an issue in obtaining a loan. As long as there are good margins in your project and you put some money in (as a rule of thumb 20% of costs) you should have no problem getting a loan with the interest capitalised.
Regards
Alistair
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