Development finance through major banks vs. non-bank lenders varies quite a lot from feasibility tests and credit policies to total lending provided and pre-sales needed. Developing residential properties is no small task as it requires a lot of capital expenditure, due diligence and cost analysis/ feasibility assessments. To get finance for development you will need to have a feasibility assessment done, understand your current land value and how was that determined? e.g. are there DA approvals, has there been a valuation completed. we will need to understand the current/future debt position on the land and lastly the costs for completing the construction/ development. As a developer you will need to understand the Gross realisation of the project this is the sum of the End Sales Value less GST and Less all costs involved which can include but is not limited to Consultants (architects, engineers, builders, town planning etc), Council fees, construction, contingencies, sales commissions, marketing, finance fees and interest. Banks and non-bank lenders will typically work on values derived from either the Hard costs (Land and Construction) or Gross realisation of total on completion sales. depending on the bank/lender you will typically need to have a percentage of presales as evidence for total on completion sales.
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