Interest rates for Development Loan

Viewing 6 posts - 1 through 6 (of 6 total)

Roger_G
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@roger_g
Join Date: 2005
Post Count: 3
March 11, 2010 - 1:12 pm
I am currently sourcing finance for a investment development loan.
Will require $1.7m for a $2.4M buy/construct x 4 unit deal, allowing 18months project duration.
We have provisional approval from one of the banks but I'm not sure what is a reasonable interest rate at the moment for a development loan. What range should should I be expecting to achieve for interest on a development loan at the moment.
Roger_G
http://www.webuyperth.com
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An investor based in Perth, Into positive cashflow investment properties, subdivision developments sourcing building products out of China, Member of the Vendor Finance Association VFAS999223.
WhatIfWeFinance
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@whatifwefinance
Join Date: 2009
Post Count: 58
March 11, 2010 - 9:36 pm
It really depends on a number of factors the rate as I assume this is commercial? But I have been placing these anywahere from 7.8% and above on commercial deals.
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
March 12, 2010 - 8:58 am
could be as high as 12 to 14% too.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
reactrethink
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@reactrethink
Join Date: 2009
Post Count: 5
March 12, 2010 - 11:04 am
Hey Roger,
I'm doing the same but only at the drafting stages for DA. Will need advise as to where to start looking for a development loan. Which bank did you approach and was it very difficult?
YoungInvestor
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@younginvestor
Join Date: 2003
Post Count: 377
March 12, 2010 - 12:35 pm
Could also be as low as 7% for this type of deal.
Roger_G
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@roger_g
Join Date: 2005
Post Count: 3
March 14, 2010 - 2:37 pm
Thanks for the feedback guys, sounds like I should be pushing for around 8% as a starter, guess it will be interesting see what they put on the table.
Currently talking with NAB and have had an encouraging response as far as being prepared to do business but minimal details.
We are still trying to secure the block but have a meet with NAB planned for later this week to talk details anyway.
Thanks again
Roger
Roger_G
http://www.webuyperth.com
Email Me | Phone Me
An investor based in Perth, Into positive cashflow investment properties, subdivision developments sourcing building products out of China, Member of the Vendor Finance Association VFAS999223.