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Renovating Auckland Villas – Mistakes You Want To Avoid

Renovating Auckland VillasIf you have made the decision to renovate your home, you have to be particularly careful if it is an older one. There are many mistakes people make when renovating villas in Auckland and you do not want to do something you will regret. This article notes some of the more common mistakes. Here is a list of things you do not want to do while trying to fix up your home.

 

Going For A Look That Is Too Modern

There is nothing wrong with making your home ultra-modern if you plan to do this to all parts of the house. It is a big mistake to make one room look like a scene straight from 2025 and the rest of the place is from 1925. Try making subtle changes that will mix the old with the new. This will look much better than having a home with different styles that do not mesh.

Not Budgeting Enough Money

One thing that you should understand is that renovating a very old home is usually more costly than working on more modern houses. Things like older plumbing and wiring may have to be removed or replaced, and this can be very costly. The costs are not just in the plumbing or wiring themselves but as these services are hidden away behind the walls, the workers will have to take out and then replace a lot of the walling. Plus of course, you will then have decorating costs on top of that.

Many people make the mistake of getting started without making sure that they have enough money to complete the entire project. This is not something that you want to do, so be very careful when planning financially for a renovation project. Talk to a number of builders or trades people to get some ball-park ideas on costs, add them up and add 25%. Yes, every renovation project goes over budget so to avoid major stress and disappointment, build in a hefty contingency before you start. If you cannot afford the contingency, then seriously, gold off doing the project until you have the extra money saved. In all probability you will need that extra but if at the end it has not all been spent, then you can pay off some of your mortgage.

Forgetting To Replace The Foundation

It is often said that older homes were built more solidly than modern ones but this does not mean that they are built to last forever. One thing that you should know is that foundations start to wear out over the years. In some cases, this can make your home structurally unsafe.  Also, modern building codes require deeper foundations than in the past. With moving and settling of land, it is a good idea to think about this aspect. If you are planning to do major renovations to your home, it would be a big mistake to forget about the foundation.

Not Considering Resale Value

You may look around your home and have this feeling that all it needs is some new and modern renovations to really make it look nice, but you have to consider the fact that you may want to sell your home one day. People who purchase older homes do so because they are a fan of the classic look and feel. They may not be too happy to take a look at an older home that had too many modern conveniences

Another common problem with major renovations is that people over-capitalise. This means that they build a house that is too big for their area. While a five bedroom house might seem like a good idea, if all the others in your road are only three bedrooms, you will find it hard to get a buyer. When you are doing renovations, make sure that you don’t do so much work that it removes all of the character from the place.

Failing To Set Aside Money For Asbestos Removal

Asbestos is not used when building houses these days, but it used to be very common to find them in all kinds of building materials. If you are living in an older home it does not necessarily cause a threat if it is not moving often and releasing particles into the air. Once you start removing walls and that type of thing, it is common to find asbestos. You will need to have the asbestos disposed of before the job can continue. It is important for you to have money set aside for this since you never know what lies behind the walls in your home.

Finish Renovating Auckland Villas

Clearly the renovation tasks outlined above are not for the average DIY-er. These are serious jobs which require a lot of experience and equipment to carry them out. They are definitely tasks for a professional builder, preferably a Master Builder who has the correct insurances and training.

There is nothing like making a solid plan for renovating villas in Auckland to make it look like new. While this is the result you are looking for, there are several things that can happen along the way to make things turn out very differently than you had hoped for. As long as you follow all of the advice given here, your project should be a complete success.

For more details on renovating villas in Auckland contact Repair and Restore.

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Commercial Lenders – How To Find The Best Ones

 

Are you looking for an Auckland corporate finance company that will help you with a project that you have planned to start and complete in the next few months? A commercial lender is a company that will only loan you money based upon what is called hard collateral. In the case of these banks and lending institutions, the hard collateral is in reference to the real estate that you are going to build. However, it could be a much larger project which could be anything from nonconforming assets to different types of factoring, all of which will allow you to get the funding that you need. Here is a basic overview of the different types of commercial lenders that are available, and where you can get the best interest rates on this type of loan.

 

What Exactly Is A Commercial Lender?

 

When you are looking at the many different types of commercial lenders that are available, they can be anything from private lending institutions, mutual companies, commercial banks, financial groups and what are called hard money lenders. All of the companies have different standards and interest rates, allowing the borrower to assess what each company has to offer and make the best choice. The reason that you want to compare what the different companies have to offer is because not all of them have the same financial qualifiers, and are certainly easier to work with data in a traditional bank for a regular home loan. Since everything is based upon hard collateral in most cases, if you have a good reputation for starting and completing projects in the area, you will more than likely get the money that you are looking for, regardless of the you choose to work with.

 

Why Commercial Lending Is So Fast

 

One thing that most people notice when they are doing their first loan with a commercial lender is how quickly they can fund your money and how responsive they are in regard to your needs. Since they are not bound by same regulations that a traditional bank is, it’s actually very easy for them to finance whoever they choose to work with. This has led to many unscrupulous lending companies popping up, all promising to provide the money, but at a extremely high interest rate. It depends on how desperate you are, how much money you need, and what your reputation is in the industry, in regard to who you will inevitably choose to work with that can give you the best rates and prices.

 

Commercial Lender Loan Terms

 

development finance lender NZ

development finance lender NZ

The terms of the loan itself will depend upon the value of the property, if you have a track record per your credit rating, and whether or not a prepayment penalty clause is part of the deal. For instance, most of them will not lend you more than 80% of the assessed value of the actual project, they will usually lend money for five years or 10 years, and could also have a balloon payment at the end. There is sometimes a prepayment penalty clause which means if you get the money right away, they don’t want you to pay off the loan immediately. This means they will be losing all of the interest that they otherwise would have been able to charge you, which is why many of these loans will have this clause. Each business will be able to qualify for different loans, so the more that you are able to apply for, the more likely it is that you will be able to get a very affordable rate from an Auckland corporate finance company that you can trust.

 

Once you are able to compare the different Auckland corporate finance companies out there, and choose one that can give you a low interest rate, without a prepayment penalty clause, you will have found the best company to work with, one that can give you the money that you need for the project that you need to complete, and do so for the most affordable rates available.

 

If you are looking for corporate finance in NZ, try globalpacific.co.nz who help finance many different types of project.

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Tips To Find Development Finance For Auckland Commercial Property

 

NZ development finance

NZ development finance – image

Do you want to know where and how to find commercial property development finance for Auckland real estate investment projects? If you do, you have come to the right place. Read on to find out where, as well as how to find financing for real estate development.

 

Big banks and commercial development finance

One of the most common places people turn to when they need financing for commercial property development is the big banks. This is an obvious thought since the banks promote all kinds of different finance packages. As a result, the major banks often have different kinds of financing including loans that are specifically for people who need money for commercial ventures. However, it is worth noting that most banks do not really like property development as the risk associated with these projects is too high for their standard measures. Many banks will not even lend to commercial property development but those that do have some very difficult requirements for this type of real estate development.

 

Here is a tip to keep in mind if your own banks declines you. Often it is up to individual managers as to the projects they will fund. If you go to a competing bank they may look at your real estate project with different eyes. So for this reason alone, research as many big banks as you can. This may seem like a daunting task, but it isn’t that difficult especially if you do some preliminary research online. You can perform a search very quickly and compare big banks and their loans for commercial projects and their mortgages which you can use for viable development plans. The more research you do, the better the chances are you will find a good bank to do business with.

 

Private investors for development finance

development finance company NZPrivate investors can also provide you with the funds you need for commercial real estate development. There are a number of ways to locate private investors, with one of them being the Internet. There are many websites that are specifically designed to connect you with potential private investors. Also, word of mouth is another way to find possible investment sources, but keep in mind that getting private individuals to provide you with funding can sometimes be a daunting task.

 

Commercial real estate agents

Some real estate agencies may be able to guide you in the right direction. Real estate agents area always looking for leads and if they help you develop your property, then you will need to either sell it or find tenants. Whichever the case, you will need the services of a commercial real estate agency and, since they helped you find the finance, you are more than likely to turn to that agent to find buyers or tenants. Further, agents know all sorts of people in the commercial property field and have probably sold investment properties to investors who understand your market and so may be happy to be involved in your project.

Commercial finance brokers for development finance

Perhaps the easiest route to development finance in Auckland is to go to a broker. Finance brokers are used much more extensively in the commercial field than in the residential market. This is because these companies have access to many different types of lender that the general public is simply not aware of. They often have links to private investors mentioned above but they can also access the secondary and tertiary lending markets.

 

Further all of the people involved in this sector know and understand the risks far better than the regular banks do. This is their business and so they are more accustomed to the risks, the challenges and how to mitigate against those possible problems. They understand how the commercial property market works.

 

Another benefit of going to a specialist provider for commercial property development finance is that they have experience which they can pass on to you. This is really useful in preparing your applications and business plan. They will know what different lenders are looking for and can guide you to bias your presentation to the positive triggers of those funding sources. One such specialist development finance provider is Global Pacific Finance Ltd in Auckland although they do provide finance across New Zealand.

 

More tips and advice about development finance in Auckland

Have a good business plan before you go to see any potential finance company. You may need to tweak it but it will be the basis for the discussion.

 

Make sure you have an exit strategy or some other means by which they lender will get their money back. This is crucial. You may choose to sell the finished property development and repay from the proceeds. Alternatively you might want to keep the property in which case you can raise a commercial mortgage which you fund from rental income and repay the initial loan from the mortgage. You need to be sure that you can raise sufficient capital to afford to pay back the original capital.

 

Also, just do as much research as possible on all types of investors. This way you can see what sort of thing will interest different lenders and therefore be able to adjust your pitch to satisfy their preferences. The key is to get their confidence and all ay their fears of not being paid.

 

development finance broker AucklandThe last tip you should keep in mind is to apply for financing with at least three or four different banks or lenders. This will not only increase your chances of getting financing but if you are lucky you might have more than one offer and can therefore negotiate better terms.

 

Conclusion

Finding commercial property development finance for real estate projects in Auckland does not have to be hard. Follow the above tips and you will be fine. Just make sure to be persistent in your search for financing. For more information on Global Pacific, click here.

 

globalpacific.co.nz

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Some Options For NZ Commercial Mortgages

There is a wide variety of lenders that have decided to close their doors for any new commercial borrowers. For some it was due to taking on bad loans which meant that they were carrying too much debt on their balance sheet. This means that for those who are still in the commercial mortgage market, they are having increased levels of business. This has also meant that some brokers are not taking on nay new business as they do not have ht e capacity to process all of their current lending business. There are some of direct competitors that have even stopped taking new loans, just to be able to process their current contracts. However some brokers are still able to offer excellent options for NZ commercial mortgages.


The way some lenders and brokers have handled this is to focus on certain areas. For example, some may be now focusing only on commercial properties and solid apartment buildings rather than looking at industrial premises. If the risk is lower, then it is easier to get commercial mortgage finance. Other lenders and brokers are still lending to a wide range of projects including, hotels, motels, hospitality venues as well as warehouses.

As the economy improves, the Debt Servicing Ratio is getting better i.e. lower ratios for the economy as a whole. However for the residential and commercial sectors the numbers are different and of course they vary considerably for each individual borrowing entity.  For residential properties the banks tend to look at ratios of 35% even higher ratios for commercial properties.

So even though there is plenty of money on hand with the main banks that is available for loans, they are more nervous than a few years ago about taking on risky commercial mortgages. To increase your chances of getting funding to buy you industrial property or warehouse for example, it will help your cause if you can reduce your Debt Servicing Ratio.

You can do this by reducing expenses. Almost every business carries unnecessary expenses which are a drain n their cash reserves. Create a budget if you do not have one already. Then look closely at what you are spending each month and see what you can eliminate. It can be a surprise to many companies how much they can save in outgoings. As far as getting a mortgage is concerned, the effect will be significant due to the multiplier effect of the ratio.

NZ commercial mortgagesYou can also take a serious look at how much you need to borrow. Be ruthless with this as the lower your borrowing requirement, the lower will be your DSR and therefore the more likely it is that your loan request will be approved.

Another obvious benefit of being absolutely honest about the amount you need to borrow is that this will also reduce your outgoings once the loan comes into effect. You will be paying less interest on a lower loan. You might also find that if you can bring your loan below a certain threshold, it will be perceived as a lower risk by the lender and so will attract a more favourable rate of interest for you. This again will lower your interest expenses. A good broker of NZ commercial mortgages will be able to advise you on this.

Leasing your building - image Stuart Miles

Leasing your building – image Stuart Miles

It may be possible that you can sub-let part of your building to another company. This rental income will be used in the overall calculation to assess your Debt Service Ratio as well as providing an additional source of revenue which can be sued to pay some of the interest. Remember though that this is income and will be subject to income tax so be sure to make an allowance for this in your cash-flow forecasting.

There are many other ways you and options for NZ commercial mortgages or factors to take into account. However, it can be a complex process which requires a lot of knowledge and experience. To make the process easier for borrowers and to learn some of the best ways to present an application for a loan, it is a good idea to talk to a commercial finance broker like Global Pacific. They have a number of brokers who can help and heave experience dealing in many different industries and with various forms of commercial lending.

There is plenty of information available about their services on their website here globalpacific.co.nz.

 

 

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Why NZ Borrowers Are Opting To Mezzanine Finance

Mezzanine finance is a new term that is being seen more and more often in the commercial finance world, but it actually is not as new as people think it is. The problem is a lot of times people have not heard of this type of finance before and this is why they think it is so new and never been used before. It has been used by “people in the know” as a secondary tier of funding for a long time but due to the finance constraints of the last few years, borrowers have looked for different ways to get financing for the company growth and to fund their expansion strategies. By knowing what this is, it is easier for people to figure out why so many people are opting for this type of finance over the traditional methods that are available on the marketplace that so many people are using.

Ease Of Mezzanine Financing

Typically a good reason why people will turn to this type of financing, also known as mezzanine capital, is it is easy to obtain the required funding for their business. Since people are putting their business on the line and a failure to make repayments often means the business reverts to the bank, people will find it is easy to get the financing that is needed. Another problem with traditional financing options is that they can take many months to come to fruition. Under a mezzanine finance situation, people will not have to sit and wait for a long period of time to get the approval that they need to make the most of an opportunity. Instead, people will find they are generally approved within a couple of days to a couple of weeks.

Understanding mezzanine finance

Quick Availability Of Mezzanine Funds

Typically since the business has been approved for the funds so quickly the lender is also going to release the funds to the company quickly too. This means that people will find they are able to make use of the money right away and maximise their ability to move in their market. Often people use mezzanine finance to get an injection of working capital so they will not end up struggling to pay their bills on a regular basis. With this access to credit, people will be able to get the products or materials they need sooner so that they can begin the production, construction, or whatever their business activity is.  Clearly the faster they can get their product or service to market the sooner they can make profits and then repay the finance.

If Repayment Fails People Lose Their Business

A downside to this type of finance is people have to make sure they are paying the bank back on time. If they miss a payment without talking to the bank or even letting the bank know the payment may be late people could easily lose all of their business and inventory. This is the hard thing that comes with this type of finance, but it is something that can happen and this is often why the banks are so ready to lend on this type of financing because they are guaranteed to get the business if the loan fails. However, this does not mean that everyone will be approved which can make it hard for people to get the right type of financing for their situation.

Must Already Be Established In The Business World

Mezzanine finance company NZThis is the catch that has led to a lot of businesses being turned away from the financing they need. It is the case that people need to already be established in business with a proven finance record and accounts to show to lenders. Being new in business can be an significant impediment to a fledgling company since they do not have that track record. As a result a lot of businesses get turned down for bank finance. However, people will find that once they are established in business it is easier for them to get the financing they need, but they need to have accurate records of the sales and such to make sure they are able to get the approval they need. Without this type of track record of proven sales or being established in the business world it is very likely that the bank and the other lenders will not provide the funds that are required to help the business continue to grow and reach the new heights they need. However, mezzanine financing can be a way to overcome some of .these obstacles/

As a lot of people have found out it is nearly impossible to get their business financed because of the tight commercial lending market. This is when people should know more about why so many businesses and individuals are starting to opt to mezzanine finance to get the funds they need to expand their business operations. Once people know why so many places are turning to this type of finance it is easy for people to get their business off to a good start and know that they can finally make the sales they need to stay in business for a longer period of time.

 

Global Pacific http://www.globalpacific.co.nz/

 

 

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NX_accountant_worriedfrontWhat You Should Know Before Financing Business Equipment

If you have a business and want to expand, the biggest problem you will face is financing that expansion. It is frustrating for many small businesses that even though they may be making a profit and good sales they are still frequently not able to afford to invest in new equipment for their business. One solution is to look at equipment finance.

For more on equipment finance see here.

 Choices for Financing New Equipment

In all industries there are different levels of quality. This applies just as much to the different pieces of equipment that might be needed in your business. You can buy from suppliers of cheap machinery and equipment or you can go to the top-end distributors for your try.

To take a simple example, if you have a beauty salon, then the equipment that is used in it will be seen or applied to the clients depending upon the services rendered to each customer. Bear in mind this is a beauty industry involved hair cutting, styling, outfitting, nail-care, and spas among other services. As such, the equipment needed might range from the standard levels of quality to extravagant types. The grade you go for will depend to a large extent o the discernment of your target market and your location. It will also depend on the maturity of your business. For example, the cheaper standard salon equipment might be the way to go for most salons that are starting up. Those that have a good name and reputation in the industry may opt to buy the more expensive equipment if that suits your business.

Do Not Overlook Discounts

It only takes a bit of research to come across equipment on sale at discounted prices. The deal might sound good, but it is wise to looking into the reputation of the supplier and the reasons why they are offering the discounted equipment. Are they using it to get your attention or are they selling off end-of-the-line equipment? This is not to say all supplier offer false discounts. Some can make bulk purchases of the equipment for the manufactures or get used equipment at a good price. Reputable supplies will sell good quality equipment are discounted prices. Just do some background check on the supplier, their reputation will surely help support the discounted sales offer.

New or Used – Both Have Benefits

In some parts of your business you will want to show customers the best equipment you have. Again using the salon to illustrate, you might want a new spa. In this instance getting a brand new one might make sense. However, if you need some new equipment to hygienically clean the hair and nail cutting tools, this is not going to be seen by your clients. In that case you might be advised to look for a serviceable second hand piece of equipment.

Look for Equipment Finance or Leasing Deal

Even with steep discounts, equipment can be a big financial stretch for some businesses. A way around this and to avoid a big call on your cash reserves is to look into the possibility of a leasing deal or an equipment financing arrangement. You should nevertheless do this with caution.

Equipment financing AucklandA number of suppliers do offer such options to their customers, but to only those they deem able and worthy of such extensions. The payments are in small monthly installments that will do not place a financial burden on the infant business as it grows. Just look at all financial options include the flow of cash in and out of the business before settling for an equipment financing option or leasing deal.

Alternatives to supplier equipment finance in NZ

While suppliers are often willing to provide various credit terms for equipment, they may not necessarily y be the best for your business. You should consult your firm of accountants to get their input on how you can finance new equipment for you company.

You can also talk to private commercial finance houses. They have various ways available for financing the purchase of machinery. One of the more common is called asset or equipment finance. In short, they provide the finance to the supplier and will take a security over the asset concerned. This does not place such a big strain on your business or you personally in terms of risk. It also enables you to get that new plant at favourable terms so you can expand your business.

For more information about equipment finance, visit this website.

NZ equipment finance