Finance for Developer

russell9 · 27th Apr, 2015

Hi,

I have been developing houses as a full-time occupation for the last 5yrs. I have been using low docs for that period as I had the consideration banks etc have an aversion to property development as a sole source of income. My income is generally one large amount each year - when a development sells.

Does anyone know of any lender who is partial to doing a full doc when BAS's & bank statements show these large single annual payments.

As well as financing the developments, I want to re-finance 3 rental properties as well as this hasn't been done for around 5yrs (to get out more equity for more developments).

Net profit before tax is around 15%. Also, I am not a builder, construction is outsourced. Location is Brisbane.

I'm after normal residential financing on the rental properties & possibly on the house devt's as well but not essential, to keep the interest rates down. Low docs I have are currently around 5.5%.

Thanks for any assistance.

tobe · 27th Apr, 2015

A full doc loan requires tax returns. If you take these along to a commercial broker or business banker you can then apply for development finance.

scha9799 · 27th Apr, 2015

You have been doing development for the last 5 years and also have good track record of making profit. I think should not be a problem for getting a full doc loan.

What banks/lenders want to see is consistent profit in your development, plus able to service the loan going forward back up by your 5 years development experience is a good track record and BAS and bank statements.

I would suggest you to talk to a good broker in your area.

westminster · 27th Apr, 2015

Depending on the size of your future developments you can either go full doc resi loans for developments up to 3 dwellings (4 with a few banks) or go commercial loans for higher number of dwellings with your 5 years of history.

Peter_Tersteeg · 27th Apr, 2015

The biggest challenge for starting up developers is getting beyond lo doc lending. After 5 years you should be in a position where this is viable. Talk to your bank or broker. Get your paperwork in order and have your tax returns done which favours a full doc loan. You'll pay more in tax, but you'll probably be able to leverage significantly more as well at cheaper rates.

Mick C · 27th Apr, 2015

russell9 said:
Hi,

I have been developing houses as a full-time occupation for the last 5yrs. I have been using low docs for that period as I had the consideration banks etc have an aversion to property development as a sole source of income. My income is generally one large amount each year - when a development sells.

Does anyone know of any lender who is partial to doing a full doc when BAS's & bank statements show these large single annual payments.

As well as financing the developments, I want to re-finance 3 rental properties as well as this hasn't been done for around 5yrs (to get out more equity for more developments).

Net profit before tax is around 15%. Also, I am not a builder, construction is outsourced. Location is Brisbane.

I'm after normal residential financing on the rental properties & possibly on the house devt's as well but not essential, to keep the interest rates down. Low docs I have are currently around 5.5%.

Thanks for any assistance.

If you bought the property under a trading company';s name with GST...than it's a done deal at 80%.

We just need a letter from your accountant to state the income is from the business trading + 3 years full tax returns.

Ie your a professional property developer/ renovator

It comes down to how you present the deal.

Rolf Latham · 27th Apr, 2015

Rams and an understanding accountant and u are home and hosed

ta
rolf

Qlds007 · 27th Apr, 2015

If these are long term holds and rented i wouldn't have thought an 80% full doc deal was out of the question at a sensible rate.

Cheers

russell9 · 27th Apr, 2015

Qlds007 said:
If these are long term holds and rented i wouldn't have thought an 80% full doc deal was out of the question at a sensible rate.

Cheers

The devt houses are sold each year.

The 3 rentals which I am after re-financing for were purchased back in 2000.

russell9 · 29th Apr, 2015

Thanks for all the assistance it was very helpful.

Finance for Developer

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