 Re: building and development
Hi Dan,
It sounds like you need to do a bit of light reading on the subject first. There are millions of books on property investment and development, so have a browse through a large bookshop (or library) for a few hours. If you've still got any questions after that, you'll at least be able to get more useful information from any experts you come across. There are also plenty of forums and information pages on the internet but, like the books, may not be written by someone who actually has experience.
I haven't done any development myself, so take this post with a generous handful of salt. What I have seen people do in the past is go to the bank with a finance proposal outlining all the costs of the development and at the bottom put your expected sale price. Development is risky business (council approval delays, building delays, not finding an end buyer), so banks prefer to see that you get a good profit at the end of it, which I suspect is 20% plus. Make sure you allow for the extra interest if your development doesn't finish and sell as quickly as you thought.
Where'd I get this information? Way back when I was a trainee accountant, my boss had me draw up a finance proposal based on others he'd done. So bear in mind that this information is neither current nor necessarily accurate. However, it should give you a starting point to talk with a few banks and your accountant.
Good luck!
Ben.
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