South Africa: Building development funding

D

directoritr

Guest
I am trying to find out does any Irish company/financial institution offer building development loans for overseas property? I have purchased land in South Africa and have eventually acquired planning permission to build 4 beachfront properties.
My situation is this, I own a couple of other properties in South Africa and under South African law you are only allowed borrow 50% of the value of the property so after using this equity to buy the land the banks in South Africa are unable to lend me money to do the build as it would be breaking the law!
Any information would be greatly appreciated as I have everything in place and really want to get building.
 
Re: Building development funding

Its on the South coast below Durban in Clansthal near Scottburgh, I got the last peice of beachfront land for miles in either direction. I can see by your user name you probably know the area
 
Re: Building development funding

Hi

At a guess, I'd suspect Investec might be able to put you in contact with someone ... they have offices in Dublin, but I think they are a SA bank.

Hope this helps.

Cheers

G>
 
Re: Building development funding

Following on from the initial point, my friend is in a similar situation. he has bought some development land in Croatia, and now wants to source funding from individuals or companies other than banks, here or there - and pay back higher than normal interest rates over a set period . is this possible to do this? bit like lookin for venture capitalists for property development or development partners I guess. in other worsd where would he even start to look for private funding????????
 
Re: Building development funding

What I think I am after is similar to a stage payment schedule for a house build. My builder has identified a drawdown schedule from start to finish. In Ireland this si simple as the bank holds the deeds to the site until build is completed and the value of the completed house is at least equal to value of mortgage. Is there a product that anyone knows of where an agreement would be drawn up that the investor/bank would hold deeds of newly completed houses until loan has been paid off for example.
Or if I was to sell the houses off plan and get binding sales agreements does anyone know of an institution who would fund the development on that basis.
Will look into Investec, many thanks.
 
Re: Building development funding

How much do you hope to sell the properties for?
 
Re: Building development funding

The properties will initially sell for just under 3million rand which is around 300,000 euro with the rand at 9.5 to the euro at present. With economists predicting a significant strengthening of the rand up to and after the World cup coupled with the strong house market appreciation the capital return should be quite significant.
Personally I bought off plan less than a mile from where I am building 3 and a half years ago for 1.1million rand, the house has just been valued at 2.8 million
 
Re: Building development funding

Is that rand not supposed to be seriously volatile no? (Admittedly I don't know a lot about the rand)

As in - are you primarily speculating on currencies there with the property as a side bet?
 
Re: Building development funding

I believe Investec do offer off-shore leading for south african property purchases to non-nationals at up to 75% LTV - most like through Investec Mauritius.
Hope that helps.
 
Re: Building development funding

Rand is a seasonal currency, if you check out xe.com you can see last few years highs and lows. It is tied to the US dollar I believe in currency terms. The fact that all predictions state that as the economy reaps the rewards of a more stable safe environment and improved infrastructure including the boom of the world cup - strenghtening the rand - is just a bonus.
The last few years figures in capital appreciation speak for themselves, 25%, 17% and 13%
 
Re: Building development funding

VT1 said:
Following on from the initial point, my friend is in a similar situation. he has bought some development land in Croatia, and now wants to source funding from individuals or companies other than banks, here or there - and pay back higher than normal interest rates over a set period . is this possible to do this? bit like lookin for venture capitalists for property development or development partners I guess. in other worsd where would he even start to look for private funding????????
Click to expand...

i'm in the same situation. Who can you go to?? Where do you start
 
Re: Building development funding

I'm no great fan of the Rand, not sure it will necesarily strengthen in the forseeable future.

I would advise you to borrow to the max in SA, to minimise exposure to currency, and try to sell prior to completion and effectively let the buyer finance the project. Borrowing in a hard currency for this project is very risky!
 
Re: Building development funding

" Howaye" Conti Financial services have contacted me so Im going to put my case forward I will post how I get on. If you have enough equity in property here or in Uk it doesn`t seem to be a problem because they will use that to secure the loan but this is not the route I want to take. There must be a business package out there to suit this situation.
 
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