Days of yore and development of the minute town Hoquiam Castle
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patrick
As a real estate developer or investor, you're probably very familiar with long-term mortgage financing. Perhaps, you've been funding your real estate projects with it. But truth be told, mortgage financing is actually applied to renovation projects, not development projects, such as hotel real estate development or resort real estate development.
You must understand the difference between a new development project to be constructed and an existing one to be refurbished. Then too, you must understand the difference between mortgage financing and real estate development financing. You might wonder about the importance of telling the difference between two seemingly the same things. Perhaps you have been interchanging the two terms all your life. Or perhaps, you never thought that development project is an entirely different thing from a renovation project. Well, you are about to find out some interesting details.
When you want to buy and own a land or building for the long-term, what you need is a long-term mortgage to finance your plan. Mortgage is great for buying land, apartment, house and whatever property you want to own for many years to come. However, when you want to set out for hotel real estate development, which involves buying a land and constructing structures on it, you need real estate development financing.
With the funds from the development loan, you can then complete the project, sold it and pay back the loan. That's not a very long time really. It could be more than a year, but eventually you will have to let go of the project and give up "ownership". If you want to retain co-ownership, that's the time you apply for a mortgage loan to buy part of the project and own it long-term.
Of course, as a business-minded individual, your goal is to realize a profit. With the use of careful planning, you should be able to realize a profit applied as equity in the investment and to keep your mortgage loan at minimum. Realizing profit in equity form not in cash form is one way of keeping taxes at bay, although not in all cases. Applicable taxation laws are worth checking.
It's imperative that you already gained a good grasp of what is renovation and what is development. In particular, you must know that long-term mortgage funding isn't the way to go if you plan to embark on real estate development. We hope you're no longer in a state of shock or surprise. These things should be easy to digest for you.
If you apply for development loan, always remember that you're requesting funds for both land acquisition and building construction. With this in mind, you will need to do some paperwork regarding your development project. Development plans, cost estimates, and feasibility report are just some of the documents you have to prepare for approval.
Don't be like some real estate developers who mistakenly obtained mortgage financing for their development projects. A hotel real estate development project or any other development project for that matter, is best funded with real estate development financing, not mortgage financing. Remember that so you won't have to pay unnecessarily for loan cancellation or refinancing.
You must understand the difference between a new development project to be constructed and an existing one to be refurbished. Then too, you must understand the difference between mortgage financing and real estate development financing. You might wonder about the importance of telling the difference between two seemingly the same things. Perhaps you have been interchanging the two terms all your life. Or perhaps, you never thought that development project is an entirely different thing from a renovation project. Well, you are about to find out some interesting details.
When you want to buy and own a land or building for the long-term, what you need is a long-term mortgage to finance your plan. Mortgage is great for buying land, apartment, house and whatever property you want to own for many years to come. However, when you want to set out for hotel real estate development, which involves buying a land and constructing structures on it, you need real estate development financing.
With the funds from the development loan, you can then complete the project, sold it and pay back the loan. That's not a very long time really. It could be more than a year, but eventually you will have to let go of the project and give up "ownership". If you want to retain co-ownership, that's the time you apply for a mortgage loan to buy part of the project and own it long-term.
Of course, as a business-minded individual, your goal is to realize a profit. With the use of careful planning, you should be able to realize a profit applied as equity in the investment and to keep your mortgage loan at minimum. Realizing profit in equity form not in cash form is one way of keeping taxes at bay, although not in all cases. Applicable taxation laws are worth checking.
It's imperative that you already gained a good grasp of what is renovation and what is development. In particular, you must know that long-term mortgage funding isn't the way to go if you plan to embark on real estate development. We hope you're no longer in a state of shock or surprise. These things should be easy to digest for you.
If you apply for development loan, always remember that you're requesting funds for both land acquisition and building construction. With this in mind, you will need to do some paperwork regarding your development project. Development plans, cost estimates, and feasibility report are just some of the documents you have to prepare for approval.
Don't be like some real estate developers who mistakenly obtained mortgage financing for their development projects. A hotel real estate development project or any other development project for that matter, is best funded with real estate development financing, not mortgage financing. Remember that so you won't have to pay unnecessarily for loan cancellation or refinancing.
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