Just sounding out my options with regards to obtaining finance for the purchase of a development site ($723,000) with the view to constructing 4 townhouses. I have 2 financial backers that are willing to kick in Approx $200,000. The only problem is that I have just returned back from overseas and only have a 6 month abn and cannot show a verifiable income, will this be a problem? The project is showing an irr of 32.6%.
All thoughts appreciated.
AlastairJon ChownMember@jon-chownJoin Date: 2007Post Count: 254
Alastair, What State or where is the Site? Has the site got a DA? How much land? At first glance $180K plus per site would be top end in Brisbane.
Are you referring to $200K each or between them.
If the later then a think a No Doc GR loan to that LVR will be difficult at a sensible rate.
Mez finance is always an option but is getting more expensive by the day.
Is there any other security other than the cash injection.
The site is in Melbourne and does not have a current da and the land area is just over 1000sq.mtrs., similar two story units are selling between $550,000 – $640,000.
I can contribute say $100,000 plus the $200,000 on top from my money partners. There wouldn't be any additional security being offered. The only other problem is that I have 2 paid defaults on my cra from 4 years ago totaling $4,600.
Looking forward to your replies,
Hate to say i think with your credit report you will struggle.
I can now contribute a total of $450,000 towards this project, would it be possible to do something now and if yes on what terms?
Think it will still be tight but all depends on the fixed price figures when it comes to construction etc.MortgagemanParticipant@mortgagemanJoin Date: 2004Post Count: 164
Purchasing the development site should not be a problem with that much equity injected. However obtaining the development finance would depend on quite a few factors, such as your own experience, the margin on the project (according to valuations), the builder used, pre-sales etc. What is the estimated cost of the build? In terms of your CRA, it may be an issue, but there should be ways around it if the numbers on the development itself work well enough. Hope this is helpful.
Cameron PerryPerry Financial StrategiesLevel 13, 30 Collins StMelbourne VIC 3000Ph (03) 9662 1999
Fax (03) 9662 2044