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Land Subdivision Solutions

Over the years we have successfully funded many Land Subdivision Loans, the following are a small selection for your review:

 

Our client, a management investment scheme and was looking for funding for a 69 lot residential land subdivision over 3 stages in SE Queensland.

They had approached their existing bankers however they could not assist as they wanted pre-sale cover over the entire subdivision rather than on a per stage basis which our client believed was unreasonable.

GCC was approached to provide a funding solution which would allow them to start construction immediately with no pre-sales.

Solution

GCC facilitated an approval for a land subdivision loan through a private non-bank lender which could cover the costs of the entire subdivision as one stage.

Construction on stage 1 could commence with no pre-sales required however the second stage could only commence once 50% of stage 1 was pre-sold.

Facility Amount: $11,500,000
LVR: 65% of GRV

 

Our applicant has built over 4000 apartments and town houses in the Sydney, Brisbane, Gold Coast and Sunshine Coast markets over the years.

Their principal bankers, however due to the recent economic slowdown decided to withdraw their support and call in approx $100M facility, which highlights the folly of having all their projects with one lender on a cross-collateralisation basis. They have commenced a self imposed restructure process to re-establish their business operations on a more stable diversified funding basis.

One of our clients projects required circa $30M to build 120 town houses (on a staged basis).

GCC was approached to fund Stage 1 of the project ($14.1M for 52 town-houses). Subsequent funding requests for Stages 2 and 3 will follow as Stage 1 is completed.

Our client has a relationship with a project marketing firm who had agreed to purchase thirty four (34) sales totalling $10.25 million (gross) in Stage 1 with 5% cash deposits.

Solution

GCC was able to facilitate an approval for a subdivision loan at 75% of TDC through a second tier bank which accepted 5% deposits and with all pre-sales going to just the one buyer.

Senior Facility: $14,714,000
LVR: 75% of TDC
Rate: BB + 3.50%

 

Our client purchased a land subdivision site in the Adelaide suburbs and to finance the acquisition had gone to a Caveat lender who required caveats over all properties owned by the group. This effectively has stymied our client from undertaking further developments.

Solution

Global Capital successfully sourced funding on a first and second mortgage basis at up to 80% of the end value secured only by the subdivision site. This will enable our client to free up all other securities and continue with their normal business activities.

Senior Facility: $8,650,000
LVR: 80% of GRV

 

The borrowers had purchased 2 adjoining properties and subsequently obtain DA approval for a 33 lot subdivision. Having obtained a first mortgage on the properties at acquisition and exhausting their own funds, they did not have sufficient funds to complete the project with work 75% completed to date.

Solution

GCC advanced funds within 2 weeks on a progressively drawn basis and a 2nd mortgage behind the snr funder. This enabled the borrower to finalise the subdivision within 3 months and refinance the facility at completion to a mainstream funder.

2nd mortgage amount $1.2m
Progressively drawn against work complete.

 

The client purchased 2 residential dwellings with DA approval for a 25-lot land subdivision in south east Queensland. Their existing bank would not provide additional funding to necessitate completion of the subdivision, despite the fact they had financed the initial purchase.

Solution

After receiving feedback from potential buyers that they wanted to see a physical example of the final product before providing a deposit which in our experience was typical response by would be buyers.
To alleviate the problem and increase pre-sales, the client required $1m to get a head start on the project. Given our client had previous subdivisions experience in south Queensland, we were confident to provide $1.4m in funds.

Client successfully completed the project within 3 weeks and refinanced upon completion to a major lender. Client successfully obtained presales during the later stages and held the remaining stock.