Residential property finance broker houses

Westminster National Finance broker Don Tapper, who specialises in property development financing, recently achieved a great outcome for a new developer client.

The issue: running out of time on a development loan

The developer had completed a small residential subdivision comprising eleven lots in Perth’s Cockburn Central. However, due to project time delays, they were unable to sell sufficient lots to repay their financer by the loan expiry date (a situation that many experienced developers encounter from time to time).

When the developer approached their existing financier to extend the time to repay the loan, the financier offered to roll over their current loan for a further 3 months based on establishment fees of 3% and an interest rate of 18%. And, if sufficient lots were not sold within the 3 month extension period, the developer would be faced with paying a further 3% establishment fee and an interest rate of 18% again to extend the loan.

A rather opportunistic proposal according to Don.

Don’s development finance solution

The developer was referred to Don by an existing client of his, who (based on previous dealings with Don) was certain there must be a more cost-effective funding solution than the extension terms and conditions the existing financier was offering.

The total debt on the Cockburn Central land was $1.05M against a value of $2.3M for an LVR of 46%. Don successfully negotiated with a new lender to provide a 12-month loan of $1.1M with interest capitalised at a lower rate of 8.95% pa and sufficient funds to meet setup costs at a lower amount than the prior proposal.

So, Don was able to organise a loan at a lower interest rate, with lower establishment fees and a significantly longer term to pay it back. As well as being money saving, this also gave his new client some breathing room – taking the pressure off to sell the land quickly at a potentially lower amount. Don’s new client took the better deal. The developer appointed a new selling agent and over a 7 month period was able to sell sufficient lots to clear the debt in full.

The overall saving to the client was circa $55,000 compared to the offer they had from their incumbent financier. 


Here’s Don enjoying this fantastic new subdivision.

Final Thoughts

Property development finance can be a difficult form of finance to acquire. Many developers are of the view that there are very limited bank funding options available. Whilst private financiers are abundant, they can be very expensive and their terms and conditions can be vastly different from each other. As this case study demonstrates, having a broker in your corner can make a huge difference to your outcome!