Laying the right foundations for property investment and development funding
Many property investors set themselves up for failure before they sign their first document. Investors often only check the top-line figures in a term sheet, letter of offer, heads of agreement or memorandum of understanding before signing it. They don’t pay attention to (or are unaware of) the other terms which will apply. These other terms represent years of legal precedent yet their meaning may not be what you think. Unpacked, these terms can become traps for an investor. They can delay a property acquisition or development and cost significant money.
• Pre-sales may be unacceptable to the financier
• The financier may have the right to change the terms of the loan at any time
• The financier may be able to withdraw from the loan at any time
• Circumstances outside the control of the borrower may be events of default.
We help property investors lay the groundwork for getting the best funding outcomes for their investment or development. We offer personalised commercial and legal strategic advice on funding matters. Our service leads to the signing of better initial commitment documents and formal documents that follow.
You will be in the best position to successfully negotiate changes to funding documents if you know what the main non-financial terms are or will be before signing any documents and deal with issues of concern at that time.
Peter Faludi has over 30 years of legal and transactional experience in property investment and development funding. He is well known for identifying the issues you must consider for your unique situation to save time and money later in the process. He explains complex issues so you can understand the relevant issues without the legal jargon.
Peter has helped clients avoid significant losses and save time through his experience. He gets things done.
Talk to Peter Faludi about getting the best funding outcomes for your property investment or development
What other people say
Peter has a deep understanding of the real estate market, and the legal and commercial issues faced by its players. Peter brings to each transaction a wealth of experience gained over decades of acting on complex deals ranging across property financing, joint ventures, development projects and structuring, for a variety of Australian and international businesses. Peter is a ‘deal doer’ ...Read more
Kingsmede has trusted Peter to represent them across a number of varied and complex real estate, development and financing transactions over the past five years. His commercial approach and in depth understanding of real estate markets and financing has ensured we always achieved the desired outcome and completed the transaction. Peter is a trusted adviser who we seek counsel on ...Read more
... key attribute that stands out to me is his emphasis on providing effective and efficient legal advice in a commercial context. As a former lawyer myself, I have seen firsthand on many transactions how a grandstanding or pedantic lawyer can delay or derail a transaction and add unnecessary cost and complexity. Peter is not one of these lawyers and ...Read more
... Peter played key roles on several landmark deals for both foreign and domestic investors and developers, using his expertise and formidable experience to ensure the practical application of law to many technical and complex transactions. A key feature of his work is his ability to provide user-friendly advice delivered extremely efficiently and in a timely manner, ensuring the clients' commercial ...Read more
We had the opportunity to work together with Peter during a very extensive and complicated acquisition for a new project “Southpoint” in Brisbane where he took the negotiation lead on the Development Management Agreement (being the key document relating to the development) as well as overseeing all other major documentation. His enthusiasm, engagement and knowledge was remarkable. His professionalism and ...Read more
Peter Faludi is a member of The Alternative Board of which I am the chairman of the Ryde-Parramatta Region. The Alternative Board consists of the owners/managing directors of a number of small to medium sized businesses. The skills and experience of the other board members provide guidance to individual members in overcoming issues which arise in the course of their ...Read more
Peter has assisted me in relation to property financing, joint venture and co-ownership arrangements and other commercial matters relating to property transactions for nearly 10 years. As a property investor and developer, I have found his expertise and commercial approach invaluable in guiding me (and my investors) through complex transactions and making sure our interests were properly looked after. His ...Read more
What can go wrong with your property investment or development funding without experienced advice
It’s critical to get experienced advice on funding as early as possible when investing in a property or undertaking a development. Without it, you could sign a term sheet, letter of offer or other initial commitment document that ties you to an agreement that you will find is unsuitable too late in the process. You could end up losing money, valuable time, or even an entire deal.
For example, a borrower recently signed a term sheet for a $20m loan to refinance some equity used to buy a Sydney property. The borrower had signed the term sheet without getting experienced advice.
The term sheet restricted the borrower from buying another property or borrowing other funds without the prior consent from the lender.
This created a serious problem because it limited the borrower from pursuing its strategy of buying more properties to build its portfolio.
Despite trying to renegotiate the term sheet, the lender did not agree to any change. The lender only had credit approval for the deal based on the terms of the signed term sheet. As a result, the loan was not provided.
This is a common experience for many investors. They focus on the headline figures but miss the detailed terms or do not fully understand them. Although the terms look harmless, they can represent significant responsibilities that can limit an investor’s business. It takes experience to pick this up. It takes even more experience to be able to advise an investor or developer on terms which are not even mentioned in a term sheet, letter of offer or other initial commitment document but will be included in formal documents.
We help you avoid these pitfalls. Drawing on 30 years of legal and transaction experience, we help save significant time and money whilst optimising investment funding outcomes.
Get Peter Faludi to examine your funding terms before you accept them. You will be surprised at what he finds.
We’re here to support your property investment and development funding outcomes
There are lots of things you need to consider carefully before signing a term sheet, letter of offer or other initial commitment document.
• Is it necessary for any party to the transaction to obtain FIRB approval?
• What are the main matters you must deal with in your documentation to protect your interests?
• Is it possible to get finance for your project in the current market and, if so, where?
• What restrictions or covenants are likely to be included in funding documentation used for the project?
• Given the nature of the proposed project, are your current advisers sufficiently skilled and experienced to protect your interests? Can they identify and explain the pitfalls in the terms (contained in initial commitment documents and those likely to be contained in the formal documents.) and Can they implement the transaction in a cost-effective and timely manner to protect your interests?
These are just some of the questions you need answers for when laying the groundwork to protect your interests and allow you to carry out your project as you had planned. Each client will have a different answer since the right approach depends on your unique situation.
We work with third parties supporting property investors or developers and with the investor or developer itself. We draw on deep experience advising on property and development finance to ensure you lay solid grounds for investment success in a cost-effective manner.
Talk to Peter Faludi about what you’re missing before signing your next term sheet, letter of offer or other initial commitment document.
You may also like:
- Helping Property Investors improve their position in Australian Property
- The new world is not all about COVID 19 Property investors and developers beware
- NSW Building Reforms – Finance will be harder to find