Client or Situation Overview
A residential strata scheme in Wollongong, NSW, comprising 42 lots, required funding to undertake a comprehensive structural and waterproofing upgrade.
Originally constructed in the 1960s, the building had transitioned from short-stay accommodation to long-term residential use, and required significant remediation to address ageing infrastructure and bring the property in line with modern compliance standards.
Challenge / Problem
The Owners Corporation faced a high-impact and financially sensitive funding challenge:
- Extensive structural and waterproofing defects, including concrete spalling, balcony waterproofing and drainage issues
- Ageing building (circa 1960s) requiring broad-based remediation rather than isolated repairs
- High debt per lot creating affordability pressure across a relatively small ownership base
- The project had been delayed for two years primarily because the owners could not agree on how it should be funded
This created a scenario where the Owners Corporation needed to balance urgent remediation requirements with owner affordability constraints.
Solution / Approach
Firstrata structured a $2.15 million Hybrid Strata Loan that:
- Funded the full scope of structural and waterproofing works, including contingency and escalation allowances
- Supported a progressive drawdown structure, aligned to staged construction delivery
- Provided a 10-year loan term, balancing repayment affordability with asset life
- Enabled flexibility for individual owners to:
- Pay upfront and avoid strata loan interest, or
- Participate in the loan and repay via ongoing loan levies
Funding Structure
Results / Outcomes
- $2.15M fully funded, enabling comprehensive remediation works to be undertaken
- Almost half of the owners chose to use their own funds, and half chose to use the loan
- Project delivered via staged drawdowns, aligning funding with works progress
Client Testimonial
“We’ve had an outstanding experience with Firstrata Finance. Their team delivers exceptional service, professional, responsive, and genuinely supportive throughout the entire process. The hybrid funding option was a game changer for our owners, and it’s unlikely the project would have proceeded the way it did without it.
We truly appreciate the flexibility and expertise they provided, along with how seamless they made everything from start to finish. An incredible team offering a fantastic product, highly recommended 😊”
Key Takeaways / Lessons
- Smaller schemes can still undertake major remediation with the right funding structure
- Hybrid funding models can “break the deadlock” when there is an even split of owners wanting to self-fund and those wanting to borrow
- Progressive draw structures support controlled delivery of complex works
- Flexible funding enables older buildings to be brought up to modern compliance standards