The best way to maximise your return on investment has been to leverage business transactions. By taking out property development financing, you can make your money go further.
Both to finance the purchase and full construction costs, the client will need to borrow. If the total debt is less that 90%, we will be able to lend 70% of the site's purchase price and 100% of its build costs. Clients can borrow 2,500,000.00 by lending 70% of purchase price and 100% for build costs. This amount is only a small fraction of the total project cost. The 700,000.000 needed to complete the purchase would first be released, and the remainder of the loan amount would be released over time.
Increase your return-on-investment - Property development will increase your return. If you put less money into the project, and reduce the profit by a small amount of money, you will receive a much higher return per PS.
The build will cost 1,800,000. It is expected to go for PS4,600,000. The client is a seasoned developer with strong net worth. They intend to sell the houses at the open market.
Last, the lender must ensure that the borrowed funds are within the loan to gross development values (GDV) calculation. In this case, the client may borrow up to 75% from the gross development value. In such a situation, the loan would match the lender's criteria so we could proceed with the application.
What does development finance look like? Many development loans have monthly interest that is added to the loan. At the end of the term, all interest and the loan are paid in full. This usually happens when you remortgage your property or decide to sell it. Most lenders will require that you use a broker to apply.
Funds are typically released in stages. If the site is already owned, the first release will be used to either purchase it or refinance any existing loans.
