How to raise 100% Property Development Finance
Traditionally property developers have required a combination of site acquisition deposit and build cost deposit in order to raise property development finance. The normal 70/70 lending ratio favoured by high street banks is now being challenged by astute property developers, short term financiers and a new breed of property development finance lenders.
Three ways to raise 100% property development finance:
1. Purchase the land or property under verified market value
This activity is all about the developer knowing their market and being able to spot a property development bargain. It also requires sourcing a lender willing to provide finance against the market value in spite of a lower than market value purchase price.
2. Provide additional security
Additional security (usually other property) can be provided to some lenders to achieve 100% lending when it is required. This is clearly not rocket science but it is a tactic that is sometimes overlooked by inexperienced developers.
3. Gross Development Lending (GDV)
GDV lending involves forecasting the end sales value of a development project after the build phase. Experienced developers are often able to spot value at the acquisition stage, the planning stage and the build phase of a project that others can not see. If they are able to prove their foresight to a lender by having their ideas valued by a professional valuer or surveyor then they are able to lock in profit to a project without having to raise any deposit themselves.
The Diverse Finance company work with experienced and inexperienced developers to maximise development project profits.
Contact us for a no obligation initial free consultation.
