Forums / Getting Technical / Finance / Advice needed on construction finance

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  • Profile photo of fxdaemonfxdaemon
    Participant
    @fxdaemon
    Join Date: 2013
    Post Count: 113

    Hi experts,

    I am in the stage of sourcing finance to fund a duplex project on a block I own and currently with an
    old tenanted dwelling IP. The original property still has the original loan.

    I am maxed out on servicing to access retail construction loan in my personal name/capacity. What other
    options may be available out there?

    The project is to build and hold as rental so on completion I will like to re-finance back into a retail
    investment loan if servicing improves then. If not, I will consider selling one to lower the LVR down
    in order for me to get the best re-finance deal then.

    Any advice and/or experience to share is greatly appreciated.

    Thanks,
    FXD

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Are you sure you’re definitely maxed out with your borrowing capacity for a construction loan through ALL residential lenders? Some have strong niches which can allow you to borrow further than other lenders which may get this over the line.

    If you truly are maxed out at this time, even post construction then you should be still unable to refinance the loan to a mainstream option as you’ve just piled further debt into the mix – which will outweigh any rent received in lenders calculators.

    Adrian in our office is a bit of a wizard with these construction scenarios – feel free to give him a buzz and he should be able to definitively let you know if it’s possible to arrange any finance for your scenario or whether there are some alternatives should you make xyz changes.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    1. Make sure you are really maxed out.

    2. Do what you can to improve serviceability.

    3. Related party loan.

    4. Transfer small amount ownership to someone who will help with servicing.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of fxdaemonfxdaemon
    Participant
    @fxdaemon
    Join Date: 2013
    Post Count: 113

    Thanks Corey & Terry.

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