Residential Land Subdivision in Sydney $3.8m loan; 55% on Gross Realisation

Residential Land Subdivision in Sydney $3.8m loan; 55% on Gross Realisation

Background/Issues

  • A new Client approached DFP with a project which included a JV with the Vendor;
  • They were having trouble with how to model the staged project given the land sub division would then be followed by a medium density development

Scope

  • DFP was engaged to provide a staged funding solution

Results

  • DFP modelled the project into two stages, firstly the land subdivision as stage 1 and then the medium density development as stage 2. This approach was taken given there was a presale to a builder that would undertake a 6-unit development on one of the lots (standalone) and that effectively constituted a presale on completion of the civil works program.
  • The funding model (in two stages) clearly demonstrated the sound metrics of each stage and more importantly the ability of stage 1 to migrate into stage 2.
  • DFP was able to provide an Offer of Finance within four days for stage 1.
  • The Client is very happy that we assisted them with the financial modelling and even more happy that funding for stage 1 is now secure

What the client says:

With this project we had a unique purchase structure, with the vendor essentially staying in the deal. The traditional banks were indecisive when it came to funding, even though the project had strong return criteria, they struggled to deal with anything that wasn’t a vanilla purchase structure.
Initially I was a bit sceptical about working with DFP because I hadn’t heard of them. I’d met Baxter previously however on a much larger transaction. I’ve developed real trust in them now in that everything that they have said they will do, they’ve done which has made me feel like I’m in safe hands.
The speed and directness when it comes to dealing with them is refreshing. There’s no beating around the bush. It’s nice, it’s how I do business. I can’t emphasis how impressive it was how quickly they got all this done.
We got an offer document, they said we would have one in four days, which was delivered in three. Funding has now been delivered without any problems.
I would recommend DFP to other developers. I see a real gap in the market place for what they are doing.
Jonathon Tiery, Director, Ashton Rowe

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