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How You Can Finance A Property Development
In this episode of the Property Mastermind Podcast, Hilary Saxton and Bob Andersen break down how property development finance works. Many investors assume that financing a development is the same as financing an investment property, but the two processes are very different.
Hilary and Bob discuss the key differences, explain the role of equity and serviceability, and explore the financing options available for new and experienced developers.
Episode summary
Hilary and Bob discuss the differences between retail and commercial finance, highlighting how banks assess risk and the ways developers can structure finance to suit their situation. Bob explains how equity—whether in a home, investment property, or other assets—can be leveraged to fund a development, and how some financiers accept unencumbered properties as security.
The episode also explores alternative funding strategies, including second mortgages, joint ventures, and creative structuring. Hilary and Bob emphasise that lack of serviceability does not have to be a barrier to property development.
They conclude with advice on taking the next step, whether by accessing personal equity or partnering with investors to get a project off the ground.
Highlights
- Common Confusion: Property Development vs. Property Investing [01:56]
- Understanding Retail vs. Commercial Finance [03:37]
- Tapped Out Investors and Serviceability Issues [05:54]
- Equity and Serviceability in Property Development [08:18]
- Capitalised Interest in Commercial Loans [10:04]
- Accessing Equity in Principal Place of Residence (PPR) [12:00]
- Using Unencumbered Property as Equity [14:25]
- Using Investment Properties as Equity [17:01]
- Joint Venture Workshop Announcement [19:13]
- Advice for Aspiring Property Developers [22:00]
- Encouragement and Final Thoughts [26:07]