CONSTRUCTION & DEVELOPMENT



Mortgages

Refinancing

Land Purchase

Investment


Construction & Development

With the return on investment potentially provided by investing in the real estate market many people are buying older homes to fix up or to tear down and build new homes in their place.  In order to protect your private life, the responsible move is to do this as a corporate entity, and to expose as little of your own capital as possible.  Private mortgage funds make this possible.

Financial Institutions will lend up to 75% of the original purchase cost of the house or lot, then up to 75% of construction costs.  Great Pacific Mortgage will lend you 75% of the original purchase cost, but will lend up to 100% of the construction costs, and will include interest draws.

The chart below demonstrates how on a typical 5-lot subdivision how much less capital you put at risk when using Great Pacific Mortgage as your construction lender:

Bridge & Mezzanie Financing

Larger projects, such as the development of large residential or commercial properties require the use of a financial institution; their access to funds is unparalleled.  However, if the bank will only lend 65% of the value, or requires too many pre-sale agreements, will you let that kill your project?  Great Pacific Mortgage will provide Mezzanine and Second Mortgage financing up to 85% of the property value to fill the gap behind the bank’s interest.

When is this needed?  Perhaps the bank won’t permit the purchase of a tract of raw or serviced land; Great Pacific Mortgages can finance the purchase and lend you the cash to make it attractive to the bank.  Once you’ve reached a certain target, I will find an institutional lender to lend you the bulk of the funds needed and Great Pacific will maintain the smaller, second mortgage thereby optimizing the interest you have to pay.

Or perhaps the bank wants a higher number of pre-sales on the condo building you are developing and it is slowing down your project, tying up valuable cash assets you could be using elsewhere.  Speed it up by injecting capital into your project that isn’t tied to pre-sales, driving your project forward and making it more attractive to potential buyers.

Land Development Financing Chart

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Bank Financing

 

Lot Purchase     $450,000    $450,000
Financed             75%              75%
Construction Costs  $1,500,000  $1,500,000
Financed              75%           100%
Financed  $1,462,500   $1,837,500
Down payment      $487,500     $112,500
Interest rate**           5.00%          8.00%
Lender Fee**                 1%                 1%
       $14,625       $18,375
Broker Fee**                 1%                 1%
       $14,625        $18,375
Legal Fees**          $1,500          $1,500
Appraisal Fee**          $1,000         $1,000
QS Fee**          $1,500           $    –