STAC was approached by a Development Manager who had been working with a group who had amalgamated a proposed development site over several years. The group had engaged their own valuer for before approaching STAC, thinking that doing so would put them in greater control and make the financing process faster.
A Good Valuer, but the Wrong One
With less than a month to settle on the sites, there was no time to waste.
Although the valuer that the group had engaged was well known to (and respected by!) the STAC team, there was a very good reason why it was the wrong valuer in this instance:
Private finance was needed – but that valuation couldn’t be used by a Private Lender!
The reason for that, is because of Professional Indemnity (“PI”) Insurance, which is one reason that it is so critical to choose the right valuer for the specific circumstances.
Different valuation firms have different insurance restrictions. Some of the major valuation firms that the banks use, have PI policies that will now allow them to assign their valuation reports to non-bank lenders – or will only allow so after the valuation firm has done a due diligence assessment on the proposed lender.
Other valuation firms however, choose to have a PI policy that allows them to assign valuations to more non-bank lenders.
Leveraging Relationships
Because we are constantly engaging valuers, we have the luxury of strong relationships that we can leverage when needed. In this instance, we reached out to a valuer that was suited to the funding requirement, requesting an urgent valuation on the site.
The valuation was completed within the agreed two-week period, providing enough time for the site to be settled.
Loan Facility Outcome
The site had minimal holding income, which meant that capitalisation of interest was required.
A 12 month loan facility was negotiated at a high 75% LVR, structured by way of 65% Senior Debt (first mortgage) and a further 10% Mezzanine Debt (second mortgage), all provided by a single fund manager.
How you can Leverage STAC
Talk to us as early as possible – so that we can make sure the right things are done at the right time, for your specific needs.
Because STAC Property is so active in financing site acquisitions and developments, we have strong extensive relationships with all types of Valuers and Lenders, ranging from HNW individuals through to Fund Managers of all sizes, as well as all of the Banks.
Having these strong relationships allows us to achieve great results for our clients, in short timeframes when needed.
If you have a site or a project in train, don’t delay – give us a call today.
