Use a Market-Based Financial Model And Plan Ahead For A Feasible Outcome.
Calculate the key performance indicators for your development by conducting feasibility studies. Test various scenarios, funding structures and JV deals to get the best financial outcome for your project.
When preparing to seek funding, a relevant market-based feasibility model should be prepared. The model must reflect real or qualified line items, and demonstrate the necessary minimum level of return required by the bank for the type of project and product mix.
Line items should be relevant, with costs and fees suitably benchmarked or peer reveiwed for the Bank to analyse against past projects. A professional funding model submitted for this purpose demonstrates the project sponsors sophistication and understanding of the key financial inputs relevant to the funder.
The old pre-GFC back of the envelope calculations or incorrect excel spreadsheet formats are no longer acceptable and can impact the sponsors funding credibility as the real Development Margin becomes abundantly clear to the Bank.
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Conduct a development feasibility on your project by using bank-preferred, industry-standard tools to determine the Total Project Cost (TPC). This generates a professional real estate valuation of your sites Residual Land Value (RLV) to see whether this will provide sufficient Equity for the banks to approve your construction facility. Know how much to pay for a site so that you do not have to input further Equity to obtain construction finance approval after funding all the costs associated with the land purchase and council consents.
Ideally the RLV will be equal to or greater than 20% of the TPC.
The best way to learn about the Industry and grow at your own rate is to use professional Development Feasibility software and have an actual property development in mind.
Whether this is a concept, a plan, a put/call option agreement, conditional sale and purchase contract or its a valuable piece of land you wish to develop .. We will nail down each part of the development feasibility and funding scenario analysis with you as your plans begin to become reality.
Then download and use our bank credit policy Project Finance Proposal inclusive of 60 Minute Skype Consult Meeting.
This is to confirm the Lending Strategy for the transaction and finalise the PF Proposal with you. You will get the best possible banking facilities. Access to the best non-bank options from our Panel of Lenders. Some Lenders are better to do business with than others.
Only performance based Lenders with integrity are on our Panel.