Development Finance Partners recently helped their client to arrange and settle on a construction facility for their duplex build.
Background:
Father and Son clients approached DFP three and a half years after purchasing a 677smq. property improved with a dated house, achieving development approval for a duplex project and completing site works and demolition to arrange construction finance to commence the build.
To start the finance process, DFP:
- Arranged and managed an on-completion valuation report; and
- Organised a financiers’ quantity surveyors report
The result:
Once both reports were completed, loan terms were secured for the construction finance. As our clients owned the land outright, no further equity contribution was requested with the construction facility. The loan provided them with all the necessitates for the total build cost, including statutory and professional fees, and capitalised interest and fees.
DFP helped to manage:
- The formal loan approval
- Mortgage documents
- Borrowing structure; and
- All conditions precedent to lending
We also booked and completed settlement in line with the builders first progress draw.
Looking forward
On completion, the client’s intention is to keep both properties for either their personal use or long-term investments. Whether they decide to sell or retain on completion, DFP can assist in a few ways by either:
1. Refinancing the construction loan into a traditional longer-term home; or
2. Refinancing the construction loan into an investment property loan at the end of the construction term.
Finance terms:
Type: Construction finance
LVR: 70% of Gross Realisation
Loan amount: $3,000,000
Term: 15 months