Following are five common questions asked by brokers seeking construction funding:

1. What is the maximum LVR Vado Private can advance for construction?

We can lend up to 70% of the Net Realisation Value (Gross Realisation Value less GST) for residential projects in metropolitan locations. For other property types (commercial, industrial retail etc.) the LVR’s are generally lower and reviewed on a case by case basis.

2. Does Vado Private require presales?

Presales are always preferred given they establish a market, a price and price certainty around the exit strategy.

We don’t have a prescribed policy on presales. We have funded multiple projects with no presales and assess each transaction on its merits.

3. Does Vado Private fund incomplete projects?

Yes, we have financed many incomplete projects, but we need to consider the following:

a) What stage the project is at and the work completed and the cost to complete the builder’s program. Pictures of the project showing completed works are extremely useful.

b) Will the remaining works be completed by the incumbent builder or a new builder?

c) Have all subcontractors and suppliers been paid?

d) Are all certifications in order and verified in the PCA check list? All are insurance (home warranty, builders all risk, public liability etc.) in order?

e) Are both the ‘As Is’ and ‘As if Complete’ LVR within policy?

4. Does Vado lend to Owner Builders?

Yes, we do lend to Owner Builders and request for the following information:

a) Is the owner a licenced builder? This is essential as seldom will be fund a project for a landowner constructing under an owner builder permit.

b) Does the builder have any experience in delivering projects of comparable size and scale?

c) Is the builder adequately capitalised and have capacity to fund overruns, variations and latent conditions?

5. Does Vado lend to First Time Property Developers?

Yes we do. We don’t penalise first-time developers. Instead we work with them to manage and mitigate possible risks