2nd Mortgage Finance

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Julian
Member
@julian
Join Date: 2003
Post Count: 232
June 13, 2003 - 10:23 am
Hi, Dear All,
One Finance broker offered me a 2nd Mortgage finance deal. The terms are: I need to lend out $50,000 for six months , The interest rate is 16.5% pa, after six months I will get back the capital. the solicitor will handle everything! Does it a good deal?
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AD
Participant
@ad
Join Date: 2002
Post Count: 636
June 13, 2003 - 11:15 am
On face value it is a great deal…..the fineprint will tell the full story though. Make sure you have a solicitor check out the agreement and ensure it is not putting your capital at risk.
Some other thoughts.
1. Is the money guarenteed by anything ?
2. Is it a true second mortgage where you have an interest recorded in the property ?
3. Is the property purchase a realistic purchase where you will get monies back if the deal goes wrong ?
4. Do you know the individuals involved ?
5. Is the solicitor your solicitor or acting for the other party ?
Just a few thoughts that came to mind instantly but if all is well. Sounds like a reasonably good return on your money if you want to be a passive investor.
If it was my last $50K I would probably use it elsewhere because I know I could get greater than 16.5% return out there.
Hope this helps
Enjoy
AD [:0)]
(Andrew)
“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
June 13, 2003 - 12:45 pm
Just think of how much money you could make if you used this money yourself. Eg if you used it as deposit on a property, a wrap maybe?
With this 2nd mortgage you would only make $4125 in 6 months. Do you have to pay any legals?
If you used the $50,000 as deposits on
– 2 wraps with a purchase price of around $100,000 how much would you make?
– 2 cheap buy and holds?
-one capital growth type property?
etc
Terryw
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Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Julian
Member
@julian
Join Date: 2003
Post Count: 232
June 13, 2003 - 1:15 pm
Thans Andrew & Terryw,
The money i lent out is guaranteed by a true 2nd mortgage & I also get indepentant valuer report, the LVR must be less 80%. I know it is a “fair good” deal, but not good enough. Andrew, Could you tell me where can i get grater than 16.5% return?
Thank you Terryw your idea to purchase two ip, but I live in Sydney Southern area, I can’t find any rasonable ip which market value below $330,000, Could you give me any furcher advise?
Regards
Julian
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Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
June 13, 2003 - 1:59 pm
I friend on mine bought a 3 br house in Macquarie Fields (in Sydney) last year for 148,000. She just sold it for about $250,000. There are still cheap places in Sydney.
Terryw
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au