Building to sell - need finance

C

clare1

Guest
Hi,
My father and I are planning to build a house on land that he owns. We plan to build the house and sell it on. I have received a positive answer from the planning authorities on this so no problem there., luckily. The main issue is finance to build the house. I know we could look for a mortgage and probably wouldnt have a problem getting one. However, is there any other way of financing this ? The criteria would be

1. Little or no capital investment ourselves

2. very low repayments on a loan until the house is sold.

I suppose we're looking for some sort of business/term loan at low interest rates

Any ideas or advice would be most welcome.
 
You shouldn't have to put up much capital ( if any) if you have the site as security and you could consider an interest only loan until you sell the house to keep repayments low.
 
You could get an interest only mortgage maybe. Or the Permenant TSB have a mortgage that you don't have to start paying for a year. It should be nearly built in a year or so and you could pay the whole lot off when you sell it.

I think they'll give you whatever you want if you have a site. Good Luck, it's so exciting.
 
It sounds to me like you are looking for free money (equity) until u gain from the upside.

This is a challenging task, but not impossible. Best way is probably to look for one or two investors who are close to the family and have lots of money. Basically, you would have to negotiate a certain % share of the profits to keep for yourself and father but given the idea and land are yours, you can make a good case to keep a reasonable portion.

Or you could choose to borrow from these individuals and negotiate a favourable interest rate and repayment structure. If they seek security, they could take a charge over the land but if you knew them well, you might be able to negotiate more flexible terms.

best of luck
 
Adding to this, does anybody know how much the banks will lend when you own the site? Do they base the amount they lend on your salary or the market value of the site?
 
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