Back to Transactions
Equity release from partially refurbished commercial property
The Challenge
Our client undertook a substantial renovation of his unencumberred property. Unfortunately after construction commenced, they encountered unexpected cost escalations on the project. They needed to access the equity in their property which was in a state of partial renovation. Client was also unable to evidence servicing via tradiaitonal means at the time. Our client was in a strong asset position, but did not want to sell any assets to complete this build.
Our Strategy
To provide flexibility by:
Ordering a valuation to value the property, As-Is, partially renovated.
Provide immediate cash injection to enable completion of the project without delay
No need for progress draws or Quantity Surveyor
Outline exit strategy to a major bank upon completion
The Outcome
Client completed the project and improved the value of the security property
Client was able to commence business operations on the premises
Refinanced the debt upon loan expiry to a Big Four bank which we were able to manage internally
What made it a good credit risk?
Strong borrower with proven record in developing property and managing business'
Strong Asset position of the borrower
Works done on the property improved saleability and value of the security
LVR and overall credit profile enabled exit a Major Bank.
Alternate exits to 'Lo-Doc' lenders was easily proven
Conservative LVR in strong location
As Is' Valuation
$1,700,00
Loan
$1,100,000
LVR
65%
Target investor IRR
9.75%
Location
Gold Coast QLD
