Subdivision Financing

Mortgage broking  as a business or career can be pretty lucrative, given that brokers generally get paid around 0.65% of the value of each loan or mortgage they write out.

 One very lucrative line of work is new subdivisions, and brokers with the right experience and contacts can get themselves involved at all aspects of The Project, including the early start up phase with a developer, the ongoing development including the preparation and clearing of the land and the building of the subdivision, and then in the ongoing marketing of the individual properties to residential home owners.

 Generally financially will be required for around 80% of the total value of the subdivision and traps even 90% or 100% of the initial costs of the subdivision, depending on the financial reputation of the developer, click this link for more information.

  A good mortgage broker may be able to provide the finance for the purchase of the property to be subdivided, for the planning and consenting work, for the development of the roading and services, for the subdivision and site preparation of each separate lot, for the sale of each lot of land, and, if they are very smart, then for some or all of the financing for the new homes on the property. It is unlikely that a single mortgage broker will be able to pick up all this work, but good brokers can often pick up a very high percentage of the total work.

 A piece of wasteland that has been resigned from industrial to residential may sell for $500,000 for example, but then this land could be subdivided into 20 sections that sell for $300,000 each. Who develop I may need to raise 1.5 million dollars for example to fully develop the 20 sections, but once the sections are finished they will make $4,000,000 in profit.

 Who smart mortgage broker  will make $13,000 on the financing for the purchase and development of the subdivision, and then could make another $40,000 on the sale of the individual sections, even if they can only get 50% of the new houses being built  they could still  earn another $40,000. In other words a single development project for the best mortgage brokers could make them over $90,000, but the total hours involved could I mount two one or two weeks work, admittedly in short intense stretches at different points on The Project. Mortgage broking can indeed be a very lucrative business.