Property Developer Finance

Beginning your first Property Creation is not going to be easy. There’s only a certain amount you can learn from a book, at some point you have to dance in, even if the markets are not right and you’ve yet to find the right task. However, you cannot do anything in property development without the right capital to complete a task. I’m often told of the frustrations that newbie developers face when they try to find financing for their first task. Many are refused by ‘main stream’ lenders and banks because they have no track record. This kind of makes finding finance a hard task. house extensions cardiff

Some find lending through an intermediary or advisor who have access to ‘non retail’ products such as a self build finance and specialist renovation finance. 

So why do we need specialist finance for property development?

Lenders do require dangers when it comes to lending on property, why should they? They have shareholders and members pursuits to consider. Therefore it is normal to find that virtually all lenders do not give on property that is uninhabitable or derelict. There are many reasons for this; first of all for an investment to be secure it must be insurable. Vacant properties are hard to ensure so this puts the lenders investment at risk, something they won’t do.

How is Property Advancement Finance Different from traditional finance?

It’s common for property development finance to be provided with in stages. Normally the stages are established on certain phases of the development being contacted such as, land purchase, roof and completion. That is why it’s important to make a business plan for every single of your projects setting out the expense of each level that the lending company will pay on. It’s worth recalling that the final repayment is merely released on doing your project, by which time you should have built up some significant costs. Because of this you need to agree repayment conditions with your building material suppliers. Also make sure your main installers know that their last payment could come a few weeks after conclusion. In my experience most are Cofortable with this as long as you tell them as the start of the task.

Where can I find Property development finance?

We would always work with a professional mortgage specialist to get these type of products properly explored. Now I know I am just not a professional specialist and I’m not offering advise here nevertheless for more information on where to find property developer financing try looking at our article here which will cover all aspects of the application stages and what lenders are looking for before they commit.