Our clients are a family which inherited a residential property on the harbour of Sydney’s Inner West. Since then they have bought the adjoining property and obtained development approval for 11 residential units which would yield an expected end value of $15.5M (Ex GST). The clients have no previous property development experience.

There are several beneficiaries in the family consortium and the plan is to hold on to 6 units and sell the remaining 5 units ($8.75M) at completion. As such there are no presales available.

Solution
GCC was successful in obtaining approval for a low doc construction loan via a private lender for a facility of $10.45M for a period of 18 months representing an LVR of 65% of GRV.

This enabled repayment of the existing land facility and provided construction funding to enable completion of the development with no presales or financials required.

Facility Amount:$10,450,000
LVR:65% of GRV
Rate:11.50%

 

Our client had secured an ocean front allotment of “Particular Development 2D” zoned land in Qld extending to a total site area of approximately 22,410 sqm which they had obtained approval for 104 residential units.

The valuer placed A GRV figure of $220M and the borrowers required a facility of $165M which represented an LVR of 75% of GRV in order to repay the existing facility and complete the project. The client had secured 36 pre-sales equalling approx $60M.

Solution
GCC successfully obtained approval for a facility encompassing a senior debt facility a 2nd ranking mezzanine facility and a 3rd ranking GST Facility totalling $165M or 75% of GRV

Senior Facility:$135,000,000
LVR:65% of GRV
Rate:10.25%
Mez Facility
Amount:$23,800,000
LVR:75% of GRV
Rate:15.50%
Overdraft / GST Facility of $10M to 80% of GRV, also at 15.50%

 

The subject property was purchased for $1.463M. It was the borrower’s intention to secure construction funding through their existing Bank however they are not in a position to accommodate this requirement which has led to a decision to repay the existing facility and seek development funding elsewhere.

The fact the developer had no pre sales and also significant credit issues made the option of Bank funding impossible.

GCC was approached to refinance their existing Bank ($750K) and provide the construction funding to allow for completion of a 9 storey 22 residential unit complex at located in NSW Mid North Coast.

Solution
We were obtained approval for a low doc construction facility via a private lender for a facility of $7.37M for a period of 18 months representing an LVR of 65% of GRV. There were no pre sales or financials required for this proposal.

Senior Facility:$7,370,000
LVR:65% of GRV
Rate:11.50%

 

Our client had entered into a contract to purchase a DA approved development site in Marrickville in inner west Sydney’s inner west from a related party for $2.1M with a ‘as is’ valuation of $2.8M (the difference representing the clients equity in the site). Our client also needed to repay a residential property in Gladesville worth approx $2M with an existing facility of $1.5M which was in arrears.

As our clients had limited additional equity to contribute so a JV partner was arranged to contribute additional equity for a profit participation arranged directly with our client.

Solution
GCC facilitated an approval for a low doc construction loan through a private non-bank lender based on 65% of GRV with no pre sales and no financials.

Senior Facility:$9,100,000
LVR:65% of GRV
Rate:11.50%

 

Our clients owned a property in Doncaster Victoria which they obtained DA approval to build a three level commercial residential building containing two (2) medical suites, four (4) apartments and basement car park. The clients intention is to retain the building for long term investment purposes. As there were no pre-sales or pre-leases in place the banks which the clients approached were unwilling to assist.

Solution
GCC facilitated an approval for a low doc construction loan through a private non-bank lender based on 65% of GRV with no pre sales.

Senior Facility:$13,443,000
LVR:70% of TDC
Rate:BB + 3.50%

 

The client, an owner builder, purchased the security property with DA in place permitting the client to construct 25 residential apartments over 10 storeys.

The client entered into negotiations with another lender to fund the construction of the project but were unable to reach agreement on certain terms within the proposed facility.

To avoid further delays the client commenced the project, funding construction themselves.

Construction was approximately one third complete when GCC was approached to arrange a solution.

A facility was requested to repay the existing mortgage over the land, reimburse the construction funds the client had expended to date and to provide further funds to complete the development.

The clients motivation for seeking the restructure was to secure funding for the remainder of the project and to free up as much of the capital they had invested into the project as possible to enable them to pursue other development opportunities.

Solution

A low doc construction loan facility was structured using senior and mezzanine debt which enabled a high proportion of the funds expended to date to be reimbursed. The initial draw-down was taken to 85% of the ‘as is’ value of the project. Total Facility was limited to 80% of the GRV (end value).

Further funds were retained within the facility to allow for remaining construction costs and the payment of interest until maturity.

The facility was able to proceed without the request for additional pre-sales.

As basically all of the remaining costs for the project, including interest, were allowed within the facility the Borrower was able to free up their cash-flow and use the working capital they had drawn from the project to pursue other development opportunities.

Due diligence was carried out efficiently within a short time frame and the facility was settled quickly with no interruption to construction.

Senior Facility:$7,330,000
LVR:65% of GRV
Rate:10.55%
Mez Facility
Amount:$1,140,000
LVR:70% of GRV
Rate:17.50%

Request a call back