Dixon Homes

Earlier this month we sat down with Jonny Dixon of Dixon Homes. Jonny is an experienced property developer and mortgage adviser operating in the Christchurch area.  With over a decade working in property investment, property development & property trading, we wanted to get his take on his recent experience with ASAP Finance. Here’s what he had to say:

Thanks for taking the time to sit with us, do you want to briefly describe your project and your objective?

“Yeah, cool. I was undertaking an integrated townhouse development in Linwood, Christchurch. The project comprised of 5 two-bedroom and 1 three-bedroom townhouse across two blocks. It was a build to sell project and I wanted to deliver a product that looked great, revitalise the local environment, but that would also maximise the use of the site. Also being a property investor myself, I made the decision early on to optimise the product in a way that would appeal investors, this meant low maintenance and durable products.

Describe your development finance journey, how did you end up working with ASAP Finance?

After consenting the property, I managed to quickly get five pre-sales. It all happened relatively fast (which was great) but it also started the clock regarding sunset clauses, so I needed a quick funding solution.

Being a mortgage broker, I knew from the get-go I was going to use a non-bank lender.  My investment property portfolio is spread across multiple entities – to get bank funding would require updated financials, cashflows, loan statements for ALL of my entities. This wasn’t an attractive proposition, I needed a lender who could look at the project on its own merits and without tainting my investment properties. I knew ASAP would fit this mould well.

At the time, there was also a bit of credit crunch going on and several lenders had run out of money. ASAP had a big presence in the Christchurch market, and I knew that they were one of the few lenders that had strong liquidity. So, it was an easy decision to engage them.

Did you have any concerns when you were looking to initially engage ASAP?

The rates and fees. I’ve always been a main bank client, so the idea of paying an upfront fee was off-putting (and the rate was also higher than I was used to). But once I did the math it became apparent there was value in the product and service they provide. For example, ASAP waived the requirement for a valuation, and they also didn’t need a QS appointed to the project. Once allowing for these add backs, they were priced in line with the rest of the market. And like I said, the main thing for me was the ease of the whole project and not having to jump through a million hurdles.

How well did ASAP understand critical aspects of your project?

Yeah. So, after getting in touch with ASAP, it probably would have been later the same day that I had ‘indicative terms’. The speed enabled me to quickly assess my project margin (based on ASAP’s funding costs) which was still robust – with the presales locked in, I pulled the trigger.

Are there any services or resources or things that ASAP could have done better to support you with your project?

ASAP were probably one of the most hands on lenders I’ve dealt with. The had really good grasp on what is involved to take a project to completion.

It almost sounds like a bad thing?

Not at all… It kept me on my toes and made sure that I focused on key deliverables. Most of my other projects I funded myself so there was no time pressure. But this time there were time constraints. Not only did the presales have sunset dates which would allow the purchasers to cancel their agreements if the project was not completed on time, but in the non-bank space time is a big factor in keeping cost down. ASAP were helpful in this regard.

It was the small things like, reminding me to instruct my solicitor to make a start work on the easements instrument before s223 and 224c issued. This ensured there were no delays in lodging for titles. They also picked up that the deposits for the presale agreements could be released early (once the contracts became unconditional). This enable them to be released to ASAP by way of a principal repayment, which in turn reduced my interest cost.

Are there specific challenges you encountered during the project that needed to be resolved?

Not really. It’s been pretty smooth sailing (touch wood). I guess the only minor issue was a delay with titles. But because I’d already been pushed by ASAP to do this early, I still received them before code of compliance. In future I would make getting titles at the start of the project more of a priority.

In terms of responsiveness and accessibility, how did you find the lending team at ASAP?

My lending manager Ben was just an email away. As soon as I sent invoices, they were paid (often on the same day). There was never any hold up with any progress payments, and everything was very accessible. A lot of work was done upfront around the payment schedule so you know exactly what you have to do to access funds.

What was the thing that you liked the most about our product or service?

I think the flexibility. Basically, having an idea of how much we could lend and the fact that I didn’t need to send a million and one different statements was ideal for my situation.

What do you think ASAP’s impact on the project has been?

ASAP’s impact on the project was highly beneficial. They not only played a crucial role in its successful delivery but also supported our learning process. Their hands-on approach provided valuable insights that will help me when structuring and pitching future projects.

What surprised you the most about your experience?

To be honest, there were no surprises. From the start, they just said what they could deliver, and they did everything they said they would, so no surprises.

Awesome. And finally…how would you summarize your experience with ASAP in one sentence?

I just found it easy. The whole process… Nothing was too hard, and whenever a problem arose they were quick to put forward a simple solution.