Refinance for Luxury Freehold Townhouses

October 2018

Red & Co. Finance recently funded a residual stock refinance of 6 high end freehold townhouses in the inner northern Brisbane suburb of Wooloowin.

The townhouses were well suited to Wooloowin as a blue chip inner city locale. Each had a double garage, 3 bedrooms and 2.5 bathrooms as well as a roof top entertaining terrace with panoramic city views.

The developer needed to refinance their existing construction facility within 1 month, otherwise a substantial capital reduction would be imposed by the incumbent lender.

The debt facility we offered the client enabled flexibility for a controlled sell-down of stock, at an affordable interest rate. Further aspects of the deal are as follows:

  • Debt of circa $2,500,000
  • LVR of 50% (65% of in one line)
  • Interest only rate of 6% (variable)
  • Capitalised interest for 12 months
  • Non-bank lender
  • Early repayment OK
  • Titles not issued for the property
  • Settlement within 4 weeks from initial discussion with Red & Co.
  • We arranged for 3 competitive valuation quotes
  • We coordinated settlement with the existing lender and the legal team

Many developers these days are utilising residual stock funding facilities to finish their projects and move onto the next one. The rates and terms of these debt facilities are far superior than extending a construction loan to sell down a completed project. Rather than reducing prices to sell a chunk of stock quickly at a discount, a well structured residual stock financing arrangement provides the developer with ample time to sell at full value. Cash-out options are also available for unencumbered developer stock which can be used as equity going into your next deal.

To run your construction loan refinance by our team, call Greg Turner on 0417 698 345 or email [email protected].