If you want to be involved in a property development project it is rare that you will be able to do so without financing from an external lending institution. A bank or other lending company may be nervous about providing you with the money you need to complete a given project so it is important for you to make your project look as appealing as possible to those lenders. Here are a few tips that you can use to do so.
Do your research
If you can prove that you have researched a property and its developmental potential thoroughly a lending institution may be more willing to finance its development. Banks and other lending institutions want to make sure that you have taken as many factors as possible into account when determining that a project is viable. It is more important to show the research you have completed if you are trying to get financing for a commercial property but even a residential property can benefit from research and diligence.
Include firm estimates and diagrams
If a property is going to need extensive renovation and updating it is important to show a lending institution that you know how much it will cost to perform those renovations. Consultations with contractors, architects, site planners and other construction experts should be recorded and the information should be passed on to your potential lender. The easier it is for them to get a picture of what you will be doing the better your chances will be of getting financing.
Innovation may be rewarded
If you are able to show how a project can benefit an area or show that an idea is very forward thinking you may find that a lending institution, while not able to get excited about a project, may be more willing to give you the financing than they would for a project which is somewhat less unique. If it is a commercial project, adding statements from individuals about how a project can benefit an area it may also be easier for you to secure financing. Showing that you understand how a project fits into an area and how to make it as appealing as possible to the community at large may also help sway a lending institution to give you the money you are looking for.
Donít be afraid to look at more than one lending institution
It can also be helpful if you are able to look further afield for your financing. Look for companies that tend to finance your type of project. Not every lending institution likes to invest money in every kind of property development project. Finding a lending institution that is a good fit for your project will help you have a better chance of getting money for your project. Also ensure that you have as substantial a down payment as possible as this may make a project more appealing to certain lending institutions.
By thinking carefully about who you will approach for funding and by supplying as much information as possible it will increase your chances of getting the property development funding you need.