All Topics / General Property / Financing project using non-conventional sources

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of AllanFCAllanFC
    Participant
    @allanfc
    Join Date: 2003
    Post Count: 25
    June 29, 2004 - 3:28 am

    Hi,

    Would it be possible to use strictly non-conventional sources to fund the entire realestate deals in Australia? I am talking about not using banks at all.

    Non-conventional sources includes money brokers, private lenders, corporate lenders, hard money lenders, investment trust etc.

    Being originally from the US, I have strictly used non-conventional sources or creative financing to buy investment properties. What I found I was able to buy more properties with 100% financing so much faster than going through banks. I usually use a combination of hardmoney lenders and also purchase mortgage from the seller to close the deal with no money down. This way it was not necessary for me to wait for my properties to go up in value before I can buy another one. Is that possible here in Australia? Any advice would be much appreciated.

    KIndest regards,
    Allan

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    June 29, 2004 - 3:34 am

    Yes it would be possible if you could find these lenders. Australia appear to be much tougher than USA in this regard. Generally private lenders only go up to 85% LVR and the rates are much higher, so you are better off going to a conventional lender.

    Terryw
    Discover Home Loans
    North Sydney
    [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

    Profile photo of AllanFCAllanFC
    Participant
    @allanfc
    Join Date: 2003
    Post Count: 25
    June 29, 2004 - 6:26 am

    Thanks for all your replies.

    The reason why i prefer non-conventional sources than conventional is because eventhough it is obviously much more expensive to acquire funds using non-conventional sources i feel that it is much faster to acquire properties that way.I am also able to buy as many properties as i want without anyone (like banks managers etc) telling me whether I’m allowed to borrow or whether i could service the loan or not.

    In the US, I have strictly focused on positive cashflow properties. i believe that if you can acquire a property with positive cashflow from day 1 with 100% financing through non-conventional source I would be able to quickly move to the next deal without waiting for my properties to increase in value so that i can mortgage out or beg banks to lend me money. Also I prefer to remain as a full time property investor. I use short term strategies such as flipping contracts, lease options, sandwich lease options, wholesaling, equity sharing etc for immediate cashflow therefore most of the time conventional lenders feel that I do not meet their lending requirements.

    Thanks again.

    Profile photo of kpkp
    Member
    @kp
    Join Date: 2004
    Post Count: 509
    June 29, 2004 - 12:52 pm

    Allan,
    There is no restriction on you using private funds, if you can source them. Theres no law against it.
    Just out of interest, do you have a source for these funds or are you intending to go to the market and canvass for them ?
    I’m curious….
    KP

    Profile photo of AllanFCAllanFC
    Participant
    @allanfc
    Join Date: 2003
    Post Count: 25
    June 30, 2004 - 3:03 am

    Hi KP,

    Thanks for your advice in regards to using private funds.

    Yes I do know a few hard money lenders and private lenders but unfortunately they are based overseas. I hardly go to banks when I want to borrow money for realestate deals in the US. I have been asking around for hard money lenders here, I think there is one in Sydney CBD that offers no qualifying finance at very high interest rate of 10-12%. I think they get their money from private investors. They are only willing to lend 60-65% of the purchase price. I will still look around for some more lenders in the same category so that when the time comes I would be able to negotiate a better deal if I can generate a bit of competition.

    Kindest regards,
    Allan

    Profile photo of kpkp
    Member
    @kp
    Join Date: 2004
    Post Count: 509
    June 30, 2004 - 9:26 am

    Alternatively Allan,
    CAn you get access to some of that overseas money…sounds like it is cheaper than local money

    KP

    Profile photo of SeachangeSeachange
    Member
    @seachange
    Join Date: 2004
    Post Count: 5
    June 30, 2004 - 10:04 am

    Hi all,

    As an investor new to creative investing. Could someone explain wholesalng, sandwich leasing and equity sharing?

    Thanks
    Seachange

    Profile photo of lifeXlifeX
    Member
    @lifex
    Join Date: 2004
    Post Count: 651
    June 30, 2004 - 2:13 pm

    Allan,
    Try looking in the Australian Papers Classifieds under Money/Finance.

    Here in Melbourne, Herald-Sun, The Australian and the Age. are the main papers.

    Also check our Yellow Pages (business/telephone directory) under “Finance”.

    [cowboy]

    lifexperience

    Profile photo of esaaresaar
    Member
    @esaar
    Join Date: 2005
    Post Count: 11
    August 3, 2005 - 1:27 pm

    YES you can borrow 100%, you can even borrow 106% if you can service it. It will go toward purchasing costs such as stamp duty, mortgage insurance legal etc. So basically you DO NOT use your money!! Allan, I can arrange for that type of finance, just reply to my message.

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