Lvl 29 Chifley Tower, 2 Chifley Square, Sydney NSW 2000
info@acumenfinance.com.au
Drop us a line anytime!
Drop us a line anytime!
+61 02 9238 4218
Monday-Friday, 8am - 5pm
Monday-Friday, 8am - 5pm
After depositing $5M towards a property development project, a major bank rescinded on its conditional offer.
The primary reason was the banks had crossed an internal risk threshold for commercial investments in a specific region, based on risk thresholds calculations.
The developer was at risk of losing his invested $5M.
The four month facility for $33M allowed this borrower from not losing his $5M deposit and the investor received a 30% return per annum.
A land banker who had just developed 300+ residential subdivision lot in Brisbane, Gold Coast area was in a sell down mode (selling completed properties).
He needed an extra $1.725M to undertake a second development application for subdivision on his land holdings separate to the completed titles being sold, This land an asset that had a value of $10M.
The bank that had the relationship with this land banker could not fulfil this loan requirements any further despite a long history of repayment.
The land banker was super thrilled because the cost of not doing this deal was greater than the interest with the net value created on completion of this project. As the interest was capitalised it didn’t impact his cash flow for a year. The land banker added value to his asset base, while operating with average interest rate of 7% across all the borrowed funds. He was able to exit the loan in 8 months and the bank’s commercial manager continue to maintain relationship with the land banker.
A land developer, owner of an englobo had over the course of 10 years purchased a number of parcels, many hectares - enough supply for two decades!
Total purchase price of $42M. It was a rezoning play for him and he had invested into rezoning applications.
He sold the entire future precinct to another developer, who purchased it for $120M under option in 3 stages and staggered over 5 years. He (the land developer) received $30M for the first lot, and before the second year the option holder (purchaser) become insolvent.
This nullified the option agreement and the lot he sold for $30m was back on the market. One fifth of this land was with receivers when he engaged us.
Ability to get funding from the banks was near impossible based on RP Data and GFC like market conditions.
With an exit strategy of a rescindable contract we were able to bring lenders to the table. A rescindable, allows a lender to have more fundamental control of the property in the event of default. This is because the lender will OWN the property and is not tangled in messy receivership, then can make his own commercial decision about the future of the property. In this case, should the lender have OWNED the property, he would have picked up an asset that could have yielded some 4000 residential lots over 15 years and for an investment of $4m.
A Sydney business owner found themselves with an ATO debt and was seeking added liquidity to cover for some cash flow challenges in the business.
Banks as a policy don’t get involved in lending when ATO debts are outstanding.
The private investors understand such scenarios occur, and business can come through such challenges.
The land banker was super thrilled because the cost of not doing this deal was greater than the interest with the net value created on completion of this project. As the interest was capitalised it didn’t impact his cash flow for a year. The land banker added value to his asset base, while operating with average interest rate of 7% across all the borrowed funds. He was able to exit the loan in 8 months and the bank’s commercial manager continue to maintain relationship with the land banker.
Come visit us at
Lvl 29 Chifley Tower, 2 Chifley Square, Sydney,
NSW 2000
Australia