Financing new build

[tml]

Hi,

I have 2 friends who are currently working and living in London, they have seen a site for 300k in Ireland which has planning permission for 2 detached bungalows on it, which they plan to build and then sell, couple of questions

how would they go about getting finance for it - commercial finance or straightforward RIP mortgage?

how much would they need to put in themselves - whats the max ltv they could borrow?

Any idea about how to put together a business plan to submit to lenders?

Backround wise, they would have some experience with property development in the UK but would be more refurbishments as opposed to starting from scratch.

Any ideas on how to approach this would be gratefully received!

Thanks

 

[Sceptre]

The bank generally provides 75% of the build cost and construction cost( This may be in the form of cash or alternative security). I would imagine in this case where there is no previous experience, they may insist on one of the properties being pre-sold.i.e they will not provide construction finance for the second house until the first house is sold so they would need to be prepared for that. Lenders require QS costings on the build with a valuers estimate of the likely sale price of the property when completed. Finance is in the form of 1-2 year bridging with fees of approx 1% to the Bank. They would need to bring in the plans and the permission and a resume of their experience. Site cost here is high so you are looking at €350k+ for these bungalows. It would help apart from the above if your friends had access to other cash to meet contingencies/cost overuns. Construction finance would be regarded as a risky area for Banks and where your friends have no previous experience of a similar project, they would like this to be well tied down.

Hope this helps
Regards
John.