Funding Residual Stock

Posted Tuesday, November 17, 2015 Comments (0)

With APRA regulation constraining bank residential investment lending and demand & supply factors moving to higher risk grades, some developers may require more time to sell their unsold residential unit stock upon completion. 

Balmain can source funding that will entertain a 70% LVR of gross realisation net of GST. Importantly, the valuer is instructed to value the units individually and not at a discount for an “In One Line Sale”. 

Facilities can run for a further 12 month term following construction and the interest can be capitalised within the facility. For residential unit developers, this may be a handy line of funding to have in their war chest. 

Crucial advantages are: 

  • an extended period to sell unsold unit stock without price discounting 
  • the ability to unlock equity in order to move onto the next development 
  • not limited by “concentration risk”, thus more stock can be financed 

Balmain deals with the majority of financiers across the lending spectrum on a daily basis, and it is this knowledge that has us best placed to advise you on the best source of funding for your next project.

Tim Donkin is a Finance Analyst at Balmain Commercial, specialising in sourcing finance solutions for commercial property investment, construction & development projects and residential finance. 


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