Campbell Rural Investments Limited (“Campbell”) approached Property Funding seeking $900,000 secured by first mortgage over a Waikato farm with a market value of $2,000,000. The subdivision funding was used to refinance Campbell’s existing $500,000 mortgage, plus provide a further $400,000 to cover the cost of subdividing off 4 lifestyle blocks.
Once subdivided the lifestyle blocks would have a market value of at least $250,000 each, and the remaining farm will still be worth $1,900,000.
Campbell’s bank declined extending the existing mortgage because their annual income was only $70,000.
Property Funding, providing non bank property finance, saw the opportunity to help Campbell unlock value from the property by funding the subdivision.
*Note, some key details have been changed including names of investors and borrowers to maintain privacy.