Inspire Mortgage provides streamlined broking services for commercial and residential developments

As with any loan, a lender needs to know that the project you have planned will be profitable and that repayments will be made. You’ll need to prove to the lender the following things in a feasibility study:

• Accurate costing estimates
• Timeline for project completion
• A comprehensive understanding of the project (design, location zoning, development plans)
• The experience of the developer and the building team
• Contingency funds
• How the property will generate profit (e.g. sales plan or lease agreements). Generally the project return should be no less than 25%.

This is a comprehensive study that reviews all project specifics that could have an impact on the profitability of your development. This allows the lender to make an informed decision on whether they should finance your project. You need to demonstrate what the end profit margin will be and it usually needs to be over 25%.

Some of the costs you will need to calculate include construction costs, development application, costs associated with sale (e.g. stamp duty, agent costs), contingency funds.

Yes, generally lenders will take rental income into consideration which can really assist at increasing your borrowing capacity. Sometimes the lender will accept 80% of projected gross rental income along with other income to determine how much they will lend. The way different lenders assess this varies greatly so it is best to schedule a discovery call with us and we can explain the process.