Background
A retired couple urgently needed $700,000 to complete a 95% renovated bespoke beachfront property in one of New Zealand’s most idyllic locations.
Challenge
Due to Covid-19 time delays and increased building material costs, they had significant cost overruns that they had not accounted for in their build budget. They had used up all their savings and financial resources to get the property to 95% completion. They were paying rent for accommodation and desperately needed to get the project completed so that they could move in reducing costs and then look to place the property on the market.
They required a further $700,000 to complete. They only have Government Super for income, so their main bank wouldn’t assist. Thankfully, their trusted adviser knew what to do and reached out to Avanti Finance!
Mitigants
- Unencumbered beachfront property
- Very low LVR (RV provided in support)
- Strong customer profile
- Renovations 95% complete
- Realistic exit strategy
- Known “cost-to-complete” costings
- Respected local builders to complete the work they started
- Confirmed all required council sign-offs to date had been met
- Desirable high-end beachfront property located on one of NZ’s most idyllic and beautiful beaches and regions of NZ
- Highly motivated client with a strong focus to complete the renovations, sell the property and move on
- Controlled release of funds to builder on invoices to ensure project completed.
Solution
With some great work and advice from their Adviser, we were able to provide the clients with a short term 12-month capitalised loan. Allowing them to complete the work over the next 6 months before marketing the property for sale later in the year, when this amazing property and location will be at its peak buying potential.
A great outcome resulting in very grateful and much-relived clients who can now confidently complete the remaining renovations, move on with their lives, and enjoy their retirement.
- Loan amount: $700,000
- Interest rate: 11.95% p.a.
- Term: 12 months (capitalised)
- Avanti fee: $705 (their owner-occupied home)
- Adviser fee: $5,950 (as requested by Adviser – can charge up to 1% of loan)
- Commission: no commission paid on our short term offerings
- LVR: 38%
Rates and fees were valid at the drawdown of the specific loan facility in each case study, new loans are subject to the rate at application. A copy of our current rates and fees can be found here.