The situation revolved around the client’s eagerness to secure funding well in advance of the construction phase, driven by their desire for peace of mind. Despite construction not yet ready to commence, our referrer sought to solidify the client’s commitment by offering favourable terms early in the process.
The funding sought was intended for the development of a luxurious single dwelling on an empty lot near Tweed Heads. Complications arose as there was an existing facility of approximately $1 million with a major bank that required refinancing. The clients aimed to cover all construction expenses, including ancillary costs. Although they anticipated the Development Approval (DA) to be granted within three months, they sought funding approval beforehand to alleviate concerns.
A loan of $3.5 million was sought against a Gross Realisation (GR) of $6 million, with specific terms: Loan-to-Value Ratio (LVR) up to 70% of ex GST Gross Realisation, a loan term of 14 months (anticipating a 12-month build period plus a 2-month buffer). The clients’ intention was to retain the completed house for the long term. Estimated construction costs stood at $2.1 million, yet the clients had not yet secured a builder.
Despite the initial proposal swiftly presented by Marketplace Finance, the construction faced a full-year delay due to setbacks with the DA and builder selection. Consequently, Marketplace Finance had to reinitiate the approval process and realign all specialists involved closer to the construction commencement. An exhaustive effort ensued, with over 300 calls and emails logged across 12 months to finalise the deal.
Amidst this prolonged process, our referrer managed to focus on their residential broker business, securing substantial up-front revenue of over $21,000, showcasing their adeptness in managing multifaceted situations and ensuring successful outcomes despite unforeseen delays and challenges.