An experienced Queensland property developer needed to acquire one stage of an established land subdivision on a 21-day settlement, out of a mortgagee-in-possession sale, with no pre-sales. STAC Capital structured, approved and settled a $12.1M facility inside the contract period. Here is how the deal came together.
The client
An experienced Queensland property developer had the chance to acquire one stage of an established land subdivision at Collingwood Park, in Ipswich, west of Brisbane. The site was sound and the pathway to titles was short. The catch was the contract: settlement in 21 days, out of a mortgagee-in-possession sale, with no pre-sales.
The transaction
- Location: Collingwood Park, Ipswich (Greater Brisbane), QLD
- Asset: One stage of an approved residential land subdivision, including an allocation for a childcare site
- Transaction type: Acquisition and land subdivision development finance
- Vendor: Mortgagee in possession (power of sale)
- Purchase contract: 21-day settlement
- Pre-sales: None
- Facility: $12.1M
- Senior lender: Non-bank fund manager
The challenges
- A 21-day settlement, no room to move. The contract was a power-of-sale purchase from a mortgagee in possession. Finance had to be structured, approved and settled inside the 21 days.
- No pre-sales. Without pre-sales to underwrite the deal, the lender had to get comfortable on the saleability of the lots to be completed.
- A mortgagee-in-possession purchase. These come with their own due diligence requirements, including a degree of assumption that the last owner had probably made a mess of things, and the timeframe leaves no slack to work through them in sequence.
- A development valuation under time pressure. The lender approved and documented the loan on trust, before it had even sighted the valuation, with the valuation commissioned, completed and relied on inside the same fortnight. That took a special kind of lender, and a relationship built on trust.
The STAC solution
We went straight to a non-bank fund manager we have a strong relationship with, one whose appetite and speed of approval suited a short-fused acquisition with no pre-sales. The major banks, and even many private lenders, were never going to move at this speed on this structure.
We built the submission around what actually de-risked the deal. The civil works had largely been completed back in 2023, the correct approvals were in place, and only minor rectification remained before plan sealing and titles. That made it a low-construction-risk proposition, and low construction risk is what gives a lender the confidence to move quickly. All of it rested on trust that the sponsor knew what they were doing on due diligence and had a civil contractor ready to go.
Then we ran it in parallel, not in sequence. Valuation, credit and settlement all had to progress at the same time rather than one after the other, which is the only way a 21-day contract gets to the line.
The outcome
- Facility: $12.1M
- Gearing: 62% of GRV (excl. GST)
- Lender: Non-bank fund manager
- Rate: 9.90% p.a.
- Line fee: Nil
- Establishment fee: 1.25%
- Term: 8 months
- Pre-sales: None
- Settlement: Within the 21-day contract
The client settled on time, took control of the stage, and then had a short, clear runway to titles and sales.
Key takeaways for developers
- Short settlements are won on preparation and relationships: the broker’s lender and valuer relationships, and the developer’s consultants, civil and builder relationships. If everyone is starting from scratch, it isn’t going to work.
- No pre-sales is not a problem with the right product, the right lender, and a site that stacks up.
- Mortgagee-in-possession opportunities reward certainty of funding. The mortgagee wants a clean, on-time settlement, and that’s exactly what wins these deals.
- Match the lender to the deal. For speed and a non-standard structure, a non-bank fund manager was the right call, even at higher headline fees and rates, because the alternative was missing the opportunity entirely.
If you’ve got a deal with a tight settlement and a clear story, that’s the work we do. DM us or visit staccapital.com.au.
This article is for general information only and does not constitute legal, tax or financial advice. Deal terms reflect this specific transaction and will differ for every borrower and lender.
