I have a little house its about 90m² and the block is 1011m². I have drawn up plans to develop it into a 4 x 2br units with the existing house becoming unit 1. The units are decent size, around 80m² each not including garage, they have a good open layout and will each have strata titles on them. I'm interested to hear from others on unit developments and which would be the best way of financing something like this. I intend on selling 2 of them to make pay for the building costs, if possible (depending on the sums). Any comments appreciated. Cheers
All boils down to serviceability and lvr.
Done residential you wont find a lender lend against Gross Realisation so will be subject to your overall equity / cash position.
Remember when you demolish the house you are borrowing against land value only.If you have genuine pre-sale doing it Commercial might be worth considering.
Not a matter of 1 lender fits all when it comes to small development
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
thanks for your comment, I actually plan on using the existing house as unit 1 of the 4, I have about $25k in equity on this property. So the plan is to finance the construction for the other 3 units, would this scenario work for a residential mortgage or would commercial be the only option?
Hi Wade
With only 25k equity i think you are going to struggle.
Dont forget it most cases the GR lending will be based on Net GST sale price.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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