One Property, 2 homes and 2 families... How can we do it?

I've been looking at property after property being sold in our area as mortgagee sales and I've found one that's too perfect to pass up. It's 4 acres and it's already cleared. It has D.A. approval for 22 cabins in place so we should have no trouble getting 2 homes approved.

My biggest unknown is how we go about financing the deal. A friend and I are both renting with a strong rental history (never paid late) over the past 5-6 years. We're paying $900 per fortnight and they're paying $770 per fortnight so affordability isn't an issue.

The land should be around the $300k mark and we'd also like to borrow another $100k to $120k each for a kit home. The kit itself is around $56k and the rest would be required to finish off the kit so we're looking at around $500-$550k all up (Around $250-$275k each). If this is slightly out of our lending capacity, we can include another 1 or 2 families we trust, but would prefer to keep it as simple as possible.

Any assistance would be greatly appreciated.

[Tina Pham]

Hi,

What you are proposing to do is very difficult to finance.

We can definitely assist you with purchasing the land at 90% LVR however the kit homes cannot be finance unless you have equity of equal amount in another property for the bank to hold as collateral until the kit homes have been moved and fixed on the land.

The reason for this is because kit homes are constructed in a warehouse and requires payment upfront before they begin. The bank cannot release any funds until the home is actually on your land.

The only way around this is if you can fund the kit homes until completion and then reapply with the bank for an increased base on the value of the property now completed.

Please feel free to call us if you want to more information.