Hello,
I am running the numbers on a project which I have been putting together and wanted to gain a better understanding of how I could fund it. The basic fundamentals are below. I have the ability to secure an option over the land, DA is approved and the tenant is willing to sign a lease prior to settlement. Any thoughts would be greatly appreciated.
Commercial Feaso.
1 Land/ Property $1,050,000
2 Stamp Duty $50,000
3 Build Cost $3,370,000
4 Legals, admin and consultancy (10% of build) $337,000
5 Contingency on build (10%) $370,700
6 PM Services (12 months @10K/pm) $120,000
7 Total $5,297,700
Lending Circumstances
7 Borrow 70% of end product $5,250,000
8 Interest@4% $210,000.00
Income
11 Total Income $450,000Equity Required
12 Equity $47,700Nett Business Evaluation
13 Valuation @ 6% Yield $7,500,000
14 DDT Loan -$5,250,000
15 Equity -$47,700
16 DDT agent fee’s 1.7% -$135,000
17 DDT Interest for 1.5 years -$315,000
17 Profit $2,067,300
18 DDT GST -$220,230
19 Revised Total Profit $2,287,530Your assumption of equity required of $47k is far shy of the normal requirement of 30% for commercial property.
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