93 – Construction finance essentials in a dynamic market

Property Developer Podcast

With escalating build costs, delays obtaining materials and softening property values the development sector is once again facing a raft of challenges that are effecting the bottom line. This volatility and uncertainty is having an impact on finance and lending with variations to time and cost quite common. So how is this affecting the lending markets and what sorts of responses are lenders putting in place to protect themselves and their clients? Let's discuss all this and more with previous guest Fabian De Marco from Commercial & Construction Capital. We cover: - changes in private capital markets - lenders reviewing /adjusting maximum loan to value ratios - length of loan terms being reviewed/shortened - interest rates changing from fixed to variable (not seen in the last 3-4 years) - some lenders increasing percentage of contingency funds required - the listed builder on a project is under more scrutiny from lenders than ever before - feasibilities may no longer stack up so what are developers doing in this situation? Property Development Training If you are interested in learning the fundamentals of property development, in your own time and at your own pace, then be sure to head over to www.propertydevelopertraining.com and take a look. I take you step by step through the development process so you know exactly what is needed to find a site, run a feasibility and complete a small scale property development, be that a duplex or 3 or 4 unit site. So head over to propertydevelopertraining.com and take a look... I would love to see you on the inside... Property Developer Quiz Keen to find out how ready you might be to become a developer? Then take the Property Developer Quiz (https://www.propertydevelopertraining.com/quiz) and get a sense of where you are at… Become a Million Dollar Property Developer Grab my book Become a Million Dollar Property Developer about my journey into property development. This book is ideal for anyone who intends to get into small-scale property development and wants an insider’s guide to successfully obtaining wealth, fulfilment, and glory. In this book, Justin will share how he succeeded in delivering a 20-townhouse project on his first property development project and what he learned along the way. Many people have a dream of becoming a property developer. They aspire to build properties, grow portfolios, and amass great wealth. However, many people often struggle with making the leap into property development. This book has the answers for how you can make the leap into property development. Grab your copy now. Social Connection Property Developer Podcast Facebook – https://www.facebook.com/propertydeveloperpodcast Property Developer Podcast Instagram – https://www.instagram.com/property_developer_podcast/ Property Developer Podcast LinkedIn – https://www.linkedin.com/company/property-developer-podcast Links C&C Capital - https://www.cccapital.org Episode Summary The construction finance process involves identifying the right financing options, setting realistic budgets and timelines, monitoring cash flow, and managing risks. In today's dynamic market, developers need to stay informed about the latest trends and best practices in construction finance to make the most of their investments. Financing Options The first step in the construction finance process is identifying the right financing options. Developers can choose from a variety of financing options, including bank loans, private equity, and mezzanine finance. Each option has its own advantages and disadvantages, and developers need to consider factors such as interest rates, repayment terms, and loan-to-value ratios when choosing the best financing option for their project. Realistic Budgets and Timelines Setting realistic budgets and timelines is critical to the success of any construction project. Developers need to create a detailed budget that includes all construction cost...