Subscribe: RSS | Listen to the Property Developer Podcast

Matthew Royal from Development Finance Partners talks about property development funding

The sands of development funding are always shifting, and never more so than recently, so today we are going to be talking finance with past guest Matthew Royal.

He is going to give us a round up of the current lending landscape and what is happening with development finance.

Just before that, you may recall in episode 48 where I spoke with Andy Hoyne about how to get 200 people lining up to buy stock in your next development project, that we offered a copy of Andy’s beautiful book the Place Economy, valued at $200, to anyone who could suggest a great case study of a project that had made a big difference in the local community.

I did receive a number of examples from listeners and Andy has selected a winner… so the winner is… drum roll please. Larry Li who sent in a great development project in Auckland New Zealand called Hobsonville Point.

It is a significant redevelopment of an old air force base that is being slowly developed to provide more than 4500 new homes, of different types and price points.

It was a great case study and here is a link to the project’s website, which is hobsonvillepoint.co.nz . So congratulations Larry, enjoy the book, and thanks again to all the people who sent in suggestions.

Just quickly before we move on with the show, if you are interested in learning how to develop property safely and profitably, then email me justin@propertydeveloperpodcast.com to find out about the mentoring program that is available to listeners of the show.

“At the moment there is more non-bank capital than qualified deal flow.” Matthew Royal.

Okay, on to today’s guest finance expert Matthew Royal from Property Development Partners, who is also a past guest of the show, he featured in episode 28. In that episode we talked about building up a pipeline of works and how banks assess risk.

Matthew has a long association with development finance and I wanted to speak with him about the current lending landscape and what developers are facing with getting finance for their projects, as a lot has changed since our last chat.

In this conversation we discuss what’s happening with the banks, how developers are still obtaining development funding, and some tips on how to manage the current credit conditions.

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. The training includes a bonus program called Taking It To The Next Level for people who may want to go into developing full-time, along with another bonus course called Raising Capital which covers how to raise money for your projects.

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

Lessons for property developers

Okay, there you go, an update on how things are looking out there in funding land. It certainly sounds like things have turned in terms of availability of credit and many developers are looking at alternatives to simple senior debt funding from the banks. Here are a couple of things I took away from my chat with Matthew.

1. Banks aren’t lending to new clients

So if you don’t have an existing relationship with a major bank it seems you may have trouble securing a loan with them. This has meant that many developers are exploring alternative funding options and residual stock loans, which may come at a higher cost than what they had originally planned for in their feasibilities. So my advice is to start discovering what options and costs you may need to include in your next project feasibility.

2. Look at your marketing, sales, and finance strategies

With the current lending landscape, how are you going to tackle the existing conditions. Do you need to review how you are planning on marketing your properties, is your sales campaign right for where the market is headed, and how accurate is your funding strategy? As the market moves, it is prudent to monitor and update your project plan.

3. Seek early input from your trusted advisers

As the funding sands seem to be frequently shifting, it would be wise to speak with your advisers about what’s happening, how your project may be viewed by lenders and how you plan on securing funding to get your project delivered. Early and ongoing discussions can avoid nasty surprises later which may slow down your development and eat into your bottom line.

Alright, we are almost done for another episode. If you enjoyed that chat with Matthew Royal, then I suggest going back to our past discussion in episode 28 and listen out for the many tips and ideas that Matthew had on how to grow your development business. Including this gem of advice, which is still highly relevant today. There are plenty of other great tips in that episode so go back and take a listen.

And if you are interested in learning how to develop property then please send me an email justin@propertydeveloperpodcast.com to find out more.

So until next time, may all your funding applications be approved…

Links

DF Partners – www.dfpartners.com.au
Case study winner – www.hobsonvillepoint.co.nz