I should have put you can't get finance to start the building process until titles are issued"
Damn, your reply prompted me to phone to my bank for clarification and you are (at least partially) correct.
As background, my bank has confirmed that I can finance this project as a residential project even though I am building 6 residences (this is because they are on two titles, giving three per title - wow, my maths is good
). They had also confirmed that they would be able to provide me with a construction loan for the requisite amount, up to a maximum of 80% of the final value of the six properties.
My problem though, is that the bank have told me that prior to subdivision, the value of the six completed residences will only be 80 - 90% of what their final value once subdivision has occurred, because the six residences share a single title (or in my case two titles). So, prior to subdivision, they will only finance 80% of the reduced valuation. Meaning they will only finance 64% - 72% (0.8*0.8 to 0.9*0.8) of the final value of the property. This is a problem, as I don't have enough equity in the project at this level to fund the construction. So, the net result of this is that I will need to draw equity from elsewhere or wait for subdivision. Not happy!
I do have a couple of other IPs that I've owned for about 18 months which I could have revalued, but I suspect their values may not have gone up much. If so, I may need to wait for subdivision go through, which means at least a three month delay. The bank are looking at exactly when they would consider the property "subdivided" and have suggested that DAC and council approval may be sufficient, so hopefully this will only put me back a few months. The proposed subdivision is completely compliant with all local council guidelines, so (cross fingers) it should go through DAC with a minimum of fuss.
All in all, very frustrating