All Topics / Finance / unit development

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  • Profile photo of alastairmurrayalastairmurray
    Participant
    @alastairmurray
    Join Date: 2007
    Post Count: 16

    Hi All,

    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.

    Regards,

    Alastair

    Profile photo of Jon ChownJon Chown
    Member
    @jon-chown
    Join Date: 2007
    Post 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.

    Jon

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Alistair

    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.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of alastairmurrayalastairmurray
    Participant
    @alastairmurray
    Join Date: 2007
    Post Count: 16

    Hi Jon,

    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.

    Hi Richard,

    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,

    Regards,

    Alastair

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Hi Alistair

    Hate to say i think with your credit report you will struggle.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of alastairmurrayalastairmurray
    Participant
    @alastairmurray
    Join Date: 2007
    Post Count: 16

    Hi Richard,

    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?

    Best regards,

    Alastair

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Think it will still be tight but all depends on the fixed price figures when it comes to construction etc.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of MortgagemanMortgageman
    Participant
    @mortgageman
    Join Date: 2004
    Post Count: 164

    Hi Alastair,

    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.

    Kind Regards,

    Cameron PerryPerry Financial StrategiesLevel 13, 30 Collins StMelbourne VIC 3000Ph (03) 9662 1999
    Fax (03) 9662 2044

Viewing 8 posts - 1 through 8 (of 8 total)

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