Background
Development Finance Partners (DFP) was engaged by a pair of experienced property investors based in Melbourne. The clients owned an existing investment property outright and had identified a new acquisition opportunity with strong upside potential. However, the new property was expected to be valued as uninhabitable and unrentable in its current condition—making it challenging to secure funding through traditional channels.
The goal was to unlock equity from the unencumbered property and use it to fund the acquisition, without contributing any additional cash at settlement.
Project Overview
The clients had identified a new investment site with long-term development potential. In the short term, they intended to carry out minor renovations to make the property tenant-ready, generating rental income while preparing for a future redevelopment.
DFP was tasked with delivering a cash-out solution and a purchase facility that would cover:
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The full purchase price of the new property
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Stamp duty and interest costs
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All expenses capitalised for 12 months
Key Metrics
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Loan Amount: $2,075,000
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Loan Type: First Mortgage – Short-Term Investment Finance
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Purpose: Cash-out equity + 100% new property acquisition
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Finance Structure: 100% of purchase price + capitalised interest + stamp duty
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Term: 12 months (short-term facility)
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Location: Melbourne, VIC
The Challenge
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The new investment property was not currently rentable, creating challenges for valuation and funding
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The clients required 100% funding, including all associated costs
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The finance needed to be short term, with the intention to refinance once the property was renovated and income-producing
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Traditional lenders were unlikely to support the deal without a tenancy or owner contribution
DFP’s Strategic Solution
DFP structured a short-term facility secured across both properties:
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A mortgage over the new purchase, with funding covering:
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100% of the purchase price
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Stamp duty
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12 months of interest, fully capitalised
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A mortgage over the existing, unencumbered property, allowing the equity to be released as cash-out to support the transaction
This approach provided the clients with a no-cash-in solution, keeping their liquidity intact while positioning the asset for short-term tenancy and long-term development.
Once the property is renovated and leased, DFP plans to assist in refinancing the combined debt into a long-term loan product through a traditional lender.
Results and Benefits
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$2.075 million in funding secured
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100% of acquisition costs covered, including interest and stamp duty
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No upfront cash contribution required from the client
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Enabled renovation and leasing strategy to begin immediately
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Positioned for refinance into a longer-term facility post-tenancy
Conclusion
This case demonstrates DFP’s ability to deliver flexible equity release and full purchase funding for investors looking to grow their portfolio—particularly where traditional lenders fall short. By structuring a short-term facility with 100% coverage and future refinance potential, DFP empowered the clients to move forward confidently with their investment and development plans.
If you have equity in your property that you would like to use, DFP have finance solutions for equity cash out that suit a number of different purposes. Contact us to discover your best options.
