China development consultancy

china dev meeting

Finance Advocates Australia not only assists developers with tailored finance solutions but also offer a variety of consultancy services.
Recently a Melbourne based developer requested the services of Finance Advocates Australia to prepare and present a presentation for a tender in China.

With its vast experience and knowledge over 32 years in development finance Finance Advocates Australia helped the developer successfully win the tender.

If you are a developer that needs assistance beyond just finance these are the people to talk to.

Development Ready’s feature interview with Renato

Development Ready is Australia’s only dedicated property portal solely focused on showcasing development opportunities available within the marketplace.it is used by both Real estate agents and developers alike and has listed over 2000 properties since its inception with total sales values in excess of $3 billion

As part of its excellent service and commentary to the market it has assembled a panel of industry experts to feature in a series of videos designed for it dedicated market. Renato Sturma of Finance Advocates Australia was chosen by Development Ready to feature in the Property Finance video as he is considered to be a leader in this field with his 32 years on banking and property finance experience

No pre-sale funding on 48 Unit Student accommodation project

Finance Advocates Australia was set the massive challenge of finding a funding solution for an experienced South Australian developer who wanted to build and hold (not sell) a 48 room student accommodation project in Mawson Lakes South Australia.

With its vast experience, contacts and knowledge Finance Advocates was able to structure with one its Mortgage Trusts that exact package.

The developer had tried for several months all the traditional banks and lenders who would only consider the transaction if the project had 100% plus debt coverage.

The project is now well under construction now with an expected completion date later in the year where Finance Advocates may also assist with the take out of the construction loan to a main stream bank once the leasing up of the building is complete.

No pre-sales loan with a Bank

No pre-sale finance from a bank to developers is still achievable even in this current lending market.

Finance Advocates recently obtained finance for an experienced developer for an 8 townhouse project in the suburb of Ivanhoe with no pre-sales.

The developer who specifically requested no pre-sales as his strategy was to hold the properties long term or maybe sell one or two on completion to maximise the sales price in this rising market set the challenge for the Finance Advocates Team.

With its vast experience and contacts obtained over 32 years in development finance, Finance Advocates Australia structured a loan package with a second tier bank that met the brief of the client.

The project has now commenced construction with one very satisfied developer.

Mordialloc 4 Dwelling Property Development Finance Case Study

In a more recent case study to share, a client approached Finance Advocates with strict instructions that No Pre-Sales were required on their 4 townhouse project in Mordialloc. They believed that they will obtained better results once construction was started rather than before any soil was turned.

Finance Advocates was able to arrange this facility for the client with a second tier bank at 75% of TDC cost.

The project commenced and all four townhouses were sold within a month at above expected amounts. Another happy client.

If you’re looking for superior property development project finance Finance Advocates can assist. Get in touch for a complimentary feasibility analysis. Call 1300 780 196. Or simply visit www.financeadvocates.com.au and register your interest via our enquiry form.

 

Preparation for a obtaining a Development Finance Facility

Further to our our media feature “Convincing the lender to say Yes” as published in the Australian Property Investor Magazine we focus on the topic of “Preparation for a Development Finance Facility”

When approaching a lending institution being a Bank or otherwise, it’s vital to be prepared with quality information and knowledge about the site and the project you intend to build. Whilst perhaps stating the obvious it’s amazing how often over the years at Finance Advocates, that we have been approached by clients advising that have purchased a site without any idea of the core basics of the development.

I refer to such things as the profit margin on the job, the potential gross realisation of the project, the saleability of the actual property and is it the most suitable for the area, cost of construction and other costs such as selling agents fees and the most often forgotten GST. Too often sites are purchased without regard to the land cost because emotion gets in the way of good business sense.

Of course good preparation and thorough knowledge of what you intend to build and sell if that’s the case, makes the job of the lender in approving the finance all so much easier.

Finance Advocates Australia is a development finance specialist assisting clients with this process, and not only guides developers large and small with their development finance application but also provides a guiding path with information required and feasibility reviews.

Take advantage of our obligation free development finance feasibility assessment by one of our specialist by getting in touch today on 1300 780 196.  

 

Banks continue to tighten the screws on Melbourne Developers.

An experienced owner/builder recently approached FAA as he was frustrated with his long standing bank who wanted to dilute down his borrowing ability because of his owner/builder status. They also decided to increase his pre-sale requirements to over 100% of debt coverage, creating unrealistic engagement terms.

 

The client had existing plans and permits to build 13 apartments, both 1 and 2 bedrooms, in a well located position in the suburb of Footscray, with an end value of $5.235m.

 

As the marketing campaign had only recently commenced, he only had two pre-sales to date. His intention was also to hold on to some stock with previous experience dictating better sales results towards the completion end of the project. This enabled prospective purchasers to admire the quality of the finishes compared with other stock in the area.

 

His bank simply would not entertain this position!

 

Through one of its GRV lenders FAA was able to arrange a superior borrowing package where the client obtained 65% of the end value of the project net of GST.

 

Furthermore the lender required only 4 pre-sales to enable construction to commence, and again because of the strong relationships FAA has with its lenders, they allowed one of the sales to be a related party transaction to his own SMSF.

 

The project is now in commencement stage well ahead of schedule, compared to where the bank’s 100% plus debt coverage position would leave him. Most importantly our valued client requires less of his own cash contribution towards the project, due to the superior borrowing power of the GRV

Facility.

 

If you’re a developer also experiencing increasing limitations by your bank to obtain development finance for your next project, contact Renato Sturma on 1300 780 196 to discuss a superior borrowing package today or email renato@financeadvocates.com.au

 

The additional benefits of using a Development Finance Broker

The benefits of using an experienced development finance broker can go far beyond simply sourcing a good finance deal for a client.

Finance Advocates Australia (www.financeadvocates.com.au) recently assisted an existing client who’s project started to encounter major problems when they discovered their builder was in some financial trouble and that a number of the tradesman on site were not paid as were a number of suppliers.

As a result of this, the build time was delayed beyond the original contract term and then in turn, the loan facility reached its expiry period when the project was still only about 80% complete. The next issue that resulted was having enough funds left for the project under the banks “cost to complete” rules considering the extra interest required as well.

There is little doubt that had this client been dealing directly with a Bank from the start, that most likely the project would have been placed into a Mortgagee in Possession position.

Finance Advocates Australia with its 29 years of experience in banking and finance and specialising in construction and development project finance was able to negotiate with the lender, firstly an extension of the existing loan facility and at the same time a structure that allowed the developer to continue on with the project and get the tradesman and suppliers paid up to date. The project is now nearing its completion without any further delays.

If you’re a property developer looking for an experienced development finance broker call Renato at Finance Advocates Australia on 1300 780 196 for an obligation free chat.

Case Study: when a bank changed its policy on a developer

Finance Advocates Australia (www.financeadvocates.com.au) recently settled a transaction for a client in Richmond who was frustrated with his Banks sudden change of lending policy just as he was ready to start construction.
The client had plans in place to build two luxury residences in one of the better parts of Richmond and was all set to roll into the construction phase with his bank that originally funded the purchase of the property and that had assured him that they would support him for the construction.
As that time approached he was advised by his bank that their lending policies had changed and he was required to put more cash or equity in the transaction, something which he wasn’t in a position to do.
The change in the banks position basically stalled the client’s ability to move forward for several months.
The client then approached Finance Advocates Australia and with its 29 years of experience was able to structure a superior development finance package with a second tier bank that saw him obtain an 82% of hard cost loan at a rate of 5.31% without the requirement for him to contribute any further funds.
This saw the project pretty much commence immediately without further delay as we were able to arrange a refinance of the existing lenders land loan and funds he needed for construction.
If you’re a developer looking for alternative prompt development funding options call Renato at Finance Advocates Australia on 1300 780 196.

How Valuations can impact your Development Finance application?

Obtaining a valuation report upfront before you approach a lender or broker is considered a smart and professional approach to your development finance application.

Too often over the years Finance Advocates Australia ( www.financeadvocates.com.au ) has seen issues arise on the tail end of the finance application due to shortfalls in valuations or unexpected comments or issues within the report. This of course can cause major delays in commencing the project whilst these issues are worked through.

Having a valuation upfront allows the financier or broker to know exactly the numbers they are working to and then tailor the finance package around the valuation.

It’s a good idea to discuss with your financier or broker which valuer will be acceptable or on a particular panel and also pay attention to the timing of the valuation as some may only be valid for a period of three months before they become obsolete or require updating.

Finance Advocates Australia with its 29 years of experience has relationships with numerous valuation firms and can provide you assistance and guidance with the selection of a valuer for your next project. To learn more call us on 1300 780 196.