Property development has a lot of potential – as long as, that is, it is done right and you have done the relevant research and feasibility study regarding the development of the property and how much it can give you in return. But if you are thinking of applying for and obtaining financing for your property development project, there are various steps you should be aware of as well. Knowing the steps in the process of financing will help you prepare – and be ready for a good outcome.
Making an Enquiry
As soon as you have identified your property development project, you should find out about planning permission for it. If you already have planning permission for your project, then all the better for you. You can already make an enquiry regarding your financing options. If you speak with a property development financing specialist such as www.seacco.co.uk, they should be able to present you with a short fact-finding report and offer some terms from particular lenders. The ‘agreement in principle’ from the lender should not only include their offer regarding financing – it should also include whatever charges they may have, as well as various conditions such as the copy of your planning permission, valuation, and more.
Visiting and Evaluating the Site
The prospective lender will also want to visit your proposed development site and speak with you and your representative personally in order to discuss the development project face to face. A professional surveyor will visit the site so they can make an assessment and valuation of the property. The surveyor will be responsible for putting the value on the property as is – meaning on its existing condition – and make a report or commentary on the property’s potential costs for building. Along with this, the surveyor will also provide the site or property’s expected value on the market after the project has been completed.
Once the necessary evaluation has been done, your application for financing and its terms will be prepared and underwritten. This will also include such expenses as interest rates, fees for set-up, etc. This is also a good time for you to look for a solicitor who will basically act as your representative and on your behalf. The solicitor you choose should have a good knowledge of the process regarding property development financing. If you can, choose a solicitor who comes with a recommendation from a developer and who is based in your local community as well.
When everything has been arranged and there are no longer any concerns or questions regarding the financing, the funds can then be released. All the legal paperwork has already been arranged, with the lender sending the funds to your solicitor, if relevant. This is officially when your property development project can begin.