Background
Two experienced property developers based in Queensland joined forces to deliver residential subdivision projects in the fast-growing Fraser Coast Region. With their most recent project nearing completion, they were eager to maintain momentum and secure their next development site.
Project Overview
The Opportunity: a 5.534-hectare residential-zoned site, ideal for the next stage in their growing portfolio. The challenge? Securing funding without access to cash while still managing sales from their current development.
Key Metrics
- Location: Fraser Coast, QLD
- LVR Against Purchase Price: 119%
- Loan Type: Land acquisition loan
- Security: Residual stock from completed development
The Challenge
The developers identified the new site just as their current project was finishing construction and entering the sell-down phase. With settlements still pending, the developers were unable to access the capital required to secure the new site.
Banks and traditional lenders were not willing to support 100% funding against vacant land—particularly when the security included unsold residual stock. This type of structure is often seen as too complex or high-risk for conventional lenders.
What the clients needed was a flexible, non-bank solution—one that could solve the immediate settlement challenge while aligning with their broader growth strategy and development timeline.
DFP’s Role
The developers turned to DFP to provide a tailored funding solution. Having worked together on previous projects, they trusted DFP to think creatively and act quickly to secure a lender who could work with complex security structures and long-term planning in mind.
Strategic Financing Approach
Rather than relying on cash, DFP designed a funding strategy that unlocked the value of the clients’ unsold land lots from their previous project:
- Cross-collateralisation of residual stock: DFP structured the loan by leveraging the residual stock as additional security. This enabled the clients to fund the acquisition with no cash contribution, a highly uncommon outcome in land subdivision finance.
- Full coverage of acquisition costs: The facility covered 100% of the purchase price, stamp duty, and 12 months of capitalised interest, giving the clients time to prepare the site for construction finance without added financial pressure.
- Lender with transition capability: DFP sourced a lender open to transitioning the facility into a construction loan when the time was right. This created a seamless funding pathway, eliminating the need for a costly refinance and aligning with the clients’ project lifecycle.
- Forward modelling and security scenario planning: DFP worked closely with both client and lender to model the deal’s overall feasibility, demonstrating how the residual equity would support both the acquisition and future stages.
This highly strategic approach positioned the client to grow their portfolio without delay.
Results and Benefits
- No cash required: The clients funded the acquisition using only equity from unsold lots.
- Secured the site without delay: Timing was critical, and DFP’s strategy enabled them to act fast and beat potential price increases.
- Maintained project momentum: With no need to wait for sales to complete, they avoided costly downtime between developments.
- New growth opportunities unlocked: With a proven model in place, the clients are now considering an additional site acquisition using similar structuring.
Conclusion and Advice
The developers are now preparing to move into the construction phase of the project and thanks to DFP’s strategic support, they’ve already started planning the next acquisition.
Advice to Other Developers?
“Don’t assume you need to finish one project before starting the next. With the right funding partner, you can grow faster and smarter.”
Why Did the Client Choose DFP to Assist Them?
Having worked with DFP before, the clients knew they could rely on expert guidance, deep lender relationships, and a solution tailored to their needs—not a one-size-fits-all product.
DFP’s ability to structure complex deals, particularly those involving residual stock and future transition to construction finance, made them the ideal partner for this acquisition.