Organising funding for a big project can be tricky at times and there are many options available. You need a mortgage broker to assist navigating these options. Not only for now but when you wish to adjust the lending in the future
For Property Development common options are:
- Development to sell the site which is call pre sales
- Development to hold in a scenario of building and holding the site
- Development to do a combination of the above options
Obviously option 1 you would develop the site and clear the debt via the sales to others. This is a very common approach especially when you can gain the pre sales of your site or the right bank valuation and other documents to lend money.
But what if…
You want to hold onto to some or part of a project to either have a physical product to capitalise on with a sale or just invest yourself. This is where a developer uses a combination of sell and own or if you can meet the criteria is to hold the entire site.
Criteria on a hold approach will be different and lending criteria will apply.
When it Comes Time to Re Structure…
Alright so you need to restructure the debt on the properties you have held in some of the developments. What is next?
There is a combination of requirements here and each will allow you to take up different options. The best way to approach this is to understand what you are wishing to achieve:
- Quick turn around as the bank needs this to happen?
- Have all the lending criteria prepared and ready
- Understand what structure you wish to put the properties in (individuals, Trust or Company)
- Collaborate with your finance team your Accountant and Bookkeeper – organising all the documents to make the process easy
Lending structures in these cases do not differ that much from the standard lending we find in Residential lending click here to goto Home Loans
- Full Documentation
- Alternative Documentation
- Low Documentation
Depending on the requirement immediate or long term there will be a need for overall cost to achieve the goal of moving the lending but a progression towards the Full Documentation due to the overall cost position.
For a full assessment on your needs please contact our senior strategic broker Aaron Whybrow 02 9188 4488