Residential Subdivision Development

Mortgage brokers get involved in a lot of projects, including subdivision developments. These type of projects are quite complex and that different types of funding are required at different stages and milestones and the project.

Developers who tackle subdivisions are generally pretty risk-tolerant high net worth individuals with  with either good financial contacts or very good Taranaki mortgage brokers. Subdivisions have a number of different stages and some require long term finance while others require shorter term finance. A mortgage broker would probably have got involved during the initial purchase of the property, and the loan at this stage for the purchase would need to be over the long term as it could take years for the necessary planning, approvals and consents to be complete.

Ideally the mortgage broker would be able to obtain finance where the developer would not be saddled with large monthly payments, but rather have their payments capitalised onto the loan. The developer is going to have significant costs just planning the subdivision and sometimes these can be quite complex in terms of zoning, approval from Neighbours, and special engineering requirements for example dealing with drains and streams on the property. The mortgage broker may even be able to leverage the developers own personal finances or simply their reputation in order to obtain a favorable loan that covers the purchase of the land and all the planning and consenting work.

Once the planning and consenting is complete in the land will need to be cleared and prepared for the development of the subdivision. This may involve challenging work such as removing trees and brush from the property and backfilling and compacting existing drains and Waterways. The initial loan will need to be able to cover this work.

Following the clearing and preparation of the site the developer will then be able to start laying out the roads in the individual sections and that stage will be able to start marketing their properties. Depending on the reputation of the developer purchases may be able to put down a significant deposit to secure their own property even before any roads have been built or boundaries properly laid out, and these deposits can be used by the developer to offset the initial loan and costs.

The challenge for the professional independent mortgage brokers in Wanganui is to set up a financing arrangement that takes account of the risks involved, and this can require some serious salesmanship to the finances and the banks. Once the developer starts taking and deposits for the sections and particularly if the developer can pre-sell most or all of the sections then the job of the mortgage broker becomes immediately much easier. Both banks and non Bank lenders will be very keen to lend to the developer simply because  at that stage the project becomes much lower risk and much higher guaranteed return.

Financing for Large Commercial Buildings

Large commercial buildings can cost many tens of millions or even hundreds of millions of dollars, and the financing for these projects is very complex. The specialist mortgage brokers Marlborough who operate in the sector need to have a highly detailed understanding of all aspects of the financing, including the detailed business plan for the project.

The broker will need to understand in detail what type of tenants be developer and signed up to long term leases, and how secure these contracts are. This will require the broker to get a detailed understanding of the tenants and their own business models, and while this will be fairly straightforward for high profile anchor tenants such as a major government department it won’t be nearly so straightforward for smaller companies such as startups and other more obscure Enterprises.

Once the broker has got a good handle on the long term security of all of the tenancy agreements then the broker can then help the developer to assemble a business case for the financing of the construction. The broker will need a good working knowledge of the construction process, particularly as it relates to the milestone payments required at the various stages of the building project.

For very large projects the broker will generally need to organise financing from a number of different lenders, and this can include commercial Banks, non Bank lenders and even high net worth individuals. In many cases in New Zealand the broker will have to go offshore for financing, because the project is just too large or risky for the much smaller New Zealand backs. When it comes to mortgage brokers Nelson is the best place to be.

The important part of any financing arrangement is to make sure that just the right amount of financing arrives at just the right time, because in general the financing will be at a high interest rate and will be very expensive if it arrives before it is actually need it. Similarly if the financing arrives late and the project is held up in this also can be very expensive.

Generally large multi storey commercial developments have their tenants lined up in a very early stage in the project, and often it will take only one significant anchor tenant to convince financiers that the risks are reduced and therefore interest rates can be reduced accordingly. The process of obtaining a large and respected anchor tenant is obviously very important for the financing.

Property Bubbles and Mortgage Brokers

The mortgage broking industry in New Zealand has been on good times for a number of years, as a very active property bubble has been developing throughout the country. The price of Residential Housing throughout New Zealand and especially in the main centres has been rising exponentially over the past decade or so,  due to the population growth and a shortage of new housing stock.

The housing market in New Zealand has been very active for the past decade, as first time buyers are entering the market, existing home owners are upgrading their homes or moving to other areas, and as property investors are building their portfolios or even just starting them. In all these cases  the purchasers of properties are doing so with an eye on the future value of their properties, as in New Zealand the easiest way to get rich in the current political climate is to borrow as much money as you can and use it to buy a property or two or three. If you only need to put in a 20% deposit and borrow the rest, but then your property doubles in value over 5 years,  then your initial investment in the property increases by a factor of 6. It is very difficult to get these type of returns in any other business.

Mortgage brokers Upper Hutt are flourishing in this heady environment, as for every house sold there must be a purchaser and there must be a mortgage. While there are a lot of mortgage brokers in New Zealand there also are a lot of properties bought and sold every year, and with around $20 Billion dollars worth of mortgages written the mortgage brokers  turning around 130 million dollar every year.

All this of course could come crashing down  if the property market does a nose dive, but mortgage brokers can expect to continue to do well simply because New Zealand is well have to buy a lot of houses. If I knew government comes in after the election and  build a lot of new houses then the mortgage broking industry will be very happy, because all these houses will need to be sold and all the first home buyers who will be purchasing them will need a mortgage.

While the property bubble over the past decade has been very kind to mortgage brokers Lower Hutt, they will continue to flourish because the New Zealand housing market is basically unstoppable.

Subdividing the Family Section

Mortgage brokers get involved in a lot of interesting work, including helping  ordinary homeowners to finance the subdivision of their family property. Homeowners with an older house on a quarter acre section can be in a happy situation we are selling off the back section and subdividing it can be a very lucrative business. The options for the homeowner are to let a developer come in and do the work, in which case the homeowner will only get the net value of the section less the cost of the subdivision,  to organise a subdivision themselves in which case they get everything going but must be able to pay for the subdivision work.

The advantage of the situation if the homeowner is able to raise the finance is that they can subdivide the whole property in the most optimal way that generates the maximum return for them. This can be truly lucrative if the homeowner is able to  create two new sections and a 1 to 3  subdivision, as this is generally legally possible what’s a quarter acre section. The problem for most homeowners is that the  existing house  as sited in the wrong location on the section, but the cost of moving the house forward on the property  will almost always be a lot less in the prophets that come available from having a third section.

Mortgage brokers in Canterbury in these situations will be confronted with a homeowner that most probably has excellent equity in their property but is not cash much and so needs to borrow almost all the funding necessary for the subdivision. Banks are generally not happy at all about lending on sections alone, but fortunately for the homeowner and a mortgage broker there are a lot of non Bank lenders who are happy to lend into this market but at a much higher interest rate.

The job of the mortgage broker in this case is to find the best non Bank lender and the best interest rate, and then work with the homeowner to make sure that the plans for the subdivision are the best possible or that sufficient work is done up front buy the survey and planner to confirm that the one into three subdivision is completely viable. The mortgage brokers Christchurch may need to find initial finance just to make sure that the planner/surveyor  can confirm the viability of the project, but after the viability has been confirmed then the broker will need to organise finance to fund all the subdivision   planning work and all the consenting work it is necessary with the local City Council.

Monster part of the process is complete then the mortgage broker will need to find funding for the actual physical work necessary to properly subdivide the section, and this may cost as much as $100,000 per section. The sum will be even larger if the homeowner needs to move their house forward on the section, as this work is quite expensive and requires  that they hire a specialist house moving company that can relocate the house onto new foundations and can install new water,  sewerage and cabling.

Plumbing Work In An Old House

Posted on August 17, 2017  in Uncategorized

When renovating an old house it is virtually inevitable that some work will be necessary on the existing Plumbing. This can be difficult as old plumbing generally uses copper piping under the floor of the house, which means that access is difficult as is the actual work. Getting a good seal on copper piping is not an easy task.

Obviously the original builders and plumbers in Dunedin for an old house did not contemplate that someone would want to rip out their work and modernise the plumbing sometime in the future, and so the modern plumber can find that the area under the house is very difficult to work in and maybe covered and rocks and glass and other rubbish which the builders tossed in to the site before they put the floor on. The original plumber might also have hung the pipes haphazardly under the floor, with no thought about future work on the piping.

 

Plumbers who are modernising a bathroom or kitchen I want to use modern plastic piping, and these will need to be connected to the existing copper piping. Plastic piping is much easier to work with and to  bend around corners and joint into modern fittings, but getting a good seal with existing copper piping can be difficult. This difficulty can be aggregated if there is not much space for the parameter work in, for example behind  a vanity or shower base. Stopping  that final leaked  can require multiple attempts and a difficult environment.

A typical problem for plumbers renovating a bathroom or kitchen is that the existing hot water system is low pressure, and inadequate for modern bathroom or kitchen fittings especially mixer taps and shower fittings. The typical plumber will try to encourage the homeowner to replace the low pressure system with a high pressure system, which will cost a few thousand dollars at minimum. There is however a much more simple low-cost solution, which simply involves installing a booster pump on the outlet of the hot water system. The booster plugs into a normal 3 pin plug, and turns on whenever even the smallest amount of water flow is detected, when someone turns on a hot tap in the house. While the booster pump does not provide full mains pressure, it does provide something like it that is very usable for all mixer taps and showers. Booster pumps can be found on TradeMe for less than $200, although the cost of installation will probably also be around $200, as the  pump needs to be jointed to the existing copper piping.

Those Little Moments

Posted on May 24, 2017  in Uncategorized

Life is all about those insignificant little moments that are actually awesome but you don’t want to admit to people how cool it is. Like when you Tinder match with a gorgeous young Asian girl in her 20s (you’re totally hot for Asians) and when you ask her what qualities make her dizzy in a man, what she describes is basically you. Yeah this just happened to me, I’m so happy I can hardly concentrate on my work, to be honest. But I don’t want to admit to the girl that it’s a big deal, gotta play it cool like it ain’t no thang, y’know? The last thing I want is for her to find out that this doesn’t happen to me on a regular basis.

So yeah, they’re little moments. Not life-changing, pivotal points in your life, you won’t remember it a week from now. And yet, it’s an absolutely magical feeling. That’s what I mean by little moments, big magic.

The fact that they’re little means, you need to have lots of them. If you only have these every now and again you have a super dull life. Big moments can be rare, like getting married – you probably only want to do that once or twice in a lifetime, half a dozen times max.

As for this cute Asian girl, I asked her out on a date, and she’s taking like half an hour between texts. I told her I was free tomorrow night, half an hour later she said she wasn’t. I ask when she is free, half an hour later she says Sunday… and so on. ARRRGH. That’s why it’s good to get a date as quickly as possible, texting is just plain boring sometimes.

This is the area where we’ll have our date on Sunday. I need to pick a nice cafe.

I eventually did arrange the date, but it took a long time to organise. Like, a very long time. We’ll find out on Sunday whether its worth it or not, but I think it will be. She’s stunningly hot, Christian, but not too prude – she was very forward, not wanting to talk about drama and acting like I started off but getting straight to the point of why I was attracted to Asian girls. So she’s Christian, but she’s sexual. I love it, that’s a great balance. Let’s see where this leads!