Development loans can be summarized as getting funds to build certain Units; Townhouses; Apartments or for building for any purpose on a subdivided land (maximum number of dwellings limit as prescribed by the lender) on a block of land with a motive to earn profit by selling or leasing it. These are generally short term loans which are repaid from the profits earned by selling the constructed dwellings.
However as easily as it is described; the process is complex and quite tedious in nature. Further complexities arisefrom the structure chosen for such investments. This could be as an individual; a company; aTrust or a Partnership; depending on the requirements of the investors. Sometimes third party loans and gifts are involved too.
Since a lot of money is required to fund such a project; it would be wise to consult a broker beforehand to pen down the costs associated since many of these costs cannot be funded by the lenders and many find this out only after getting into a project and hence have had to sell midway to another cashed up investor. Not only this; the approvals process with the various councils is anything but easy. This can take up from a few months and can be dragged along to also a few years.
To make things complex; banks/lenders will only lend to the extent they can securitize given the borrowing powers; the borrowing history and the financial capacity of the investors.
Getting a loan can hence be tedious process if not done in systematic and right way since the very beginning. At A One Loans & Mortgage you can find the help of experts to assure you the right track throughout your loan process.Our team does the most important part of staying up to date with lender policies which is one of the most importantfactor for structuring and getting the right finance.
Pre-sales is one another important factor in determining finance and how much finance you would actually be able to get. Pre-sales are not a must at the time of writing this article but as mentioned earlier; there are costs you would be required to incur quite early in the process before you could start to expect any support from the financing institutions.
Sometimes the builder you choose needs to be an approved builder of the lender too.
When you look to build 4 or more dwellings your development project would be commercial in nature and hence commercial interest rates would apply.
We work hand in hand from understanding your development needs matched up with mortgage market conditions, applying with right lender and overcoming the challenges one faces dealing with big banks and also after getting finance settled. Such systematic approach relieves you from all worries and you can rest assured concentrating on other needs of your project.
At first step, our experts based on several factors help you get estimate of funds you can borrow which in turn will help you figure out the actual situation and the other funds needed by you for other related costs.
There are financing costs involved at various stages of the whole project as per under:
- Purchasing Land/House with developable land.
- Organizing finance for the purchase.
- Concept Drafting and Designing
- Hiring a Town Planner
- Hiring an Architect/Designer/Draftsperson
- Plans & Permits:
- Approvals & Utilities Connections:
- Building Process with Progress Payments:
- Post Completion Selling and settlements:
We are accredited with wide range of lenders and thus can provide you with the best funding suitable from major lenders to second and third tier lenders.
We help with arrangements and submission of documentation required with construction loans such as council approved plans, building contracts, etc which will be verified by the lender in the funding process. Different lenders offer flexible options to meet the needs of property developers. We have team who will work as a bridge between lender and you to get customized finance solutions. We not only help you get fast approval of your loan but also help you develop project feasibility with our team’s financial expertise.
Our team works with a friendly and customer service approach that understands your present as well as future needs before providing any financial solution to prove beneficial in the long run. As we have already been getting loans approved with different lenders, we have knowledge of lenders policies and clauses and thus you will have fair knowledge of everything before you sign any loan contracts. Being with A One Loans & Mortgage, we will help you get your finance on right time that will save yourself from getting penalties on delay in payments from lender.