I bought From 0 to 130… on Sunday and started looking for properties already and I found a property that is well within the ’11 Second Solution’ but I do not have the deposit money so I was wondering: if I make an application for a 100% loan will I still make a positive cashflow or is this a trap? Or am I just being slightly premature?
throw some numbers up for discussion…
cheers
rThe only difference between 100% finance and a smaller loan to valuation ratio is that you are borrowing more and the interest rate is a little higher. Also, it is harder to get 100% finance. If you can find a positive property with 100% finance, you are a champion.
As Richmond said, throw some numbers our way.
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
I’m going to go inspect it but it’s a mobile home selling for $33,000 with a secure tenant paying $120/wk.
I’ve already made inquiries into 100% loan and it’s a definite possibility!
When you say mobile home, what do you mean exactly?
I can’t see a 100% lender using a mobile home valued at 33k as adequate security in a hurry. Who did you discuss the 100% loan with and at what interest rate?
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
Yes!You have found gold.
The 11 second solution gives 10.4% that is based on 52 weeks rent per year. What is the fixed interest rate today?
Do remember to negotiate! Get the price down!
It is possible to get 100% finance.
You can ask the vendor to finance 20% too.
does home come with land? what’s the population of town?
I am going to go have a look at it next week. In relation to the loan, I e-mailed a mortgage broker I have had dealings with in the past and they said they’d look into it but they couldn’t forsee a problem getting the loan. I guess we’ll see.
mobile home ay? Is it in a caravan park? What are the weekly fees to keep the home there? Any prospects of CG? You say secure tenant, what’s the length of the lease? Would it be easy to on-sell if you had to?
cheers
rWhat is Mobile home ? Is it included the land ?
Thanksa lot of mobile homes don’t include land… they’re basically glorified caravans. a search on realestate.com.au will turn up quite a few, so they’re not that hard to find.
cheers
rIt would not be a MOBILE HOME if it came with land. A mortgage is predominantly over the land!!!
You will probably find you need a chattel mortgage or similar to fund the purchase of a mobile home.
Just because the numbers work, does not mean it is a great deal. There will be higher borrowing costs and the security will be very restrictive when it comes time to use for further purchases.
IQ, I am interested… where could they get 100% MORTGAGE finance on a mobile home?
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
I have to agree with Robert. This does not look like a good deal to me. beware. It will be very hard to finance. And if it is mobile, your ‘home’ could disappear easily.
Terryw
Discover Home Loans
Mortgage Broker
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for all the feedback!!
On talking with my mortgage broker this is what i discovered: no lender will give a home loan for a mobile home BECAUSE it is not a fixed chattel. Apparently a personal or even a car loan will suffise. So I have to redo the numbers (interest rates, insurance etc).
It’s in the city of Gosford and I am assured the tenants are long-term (I’ll get a better idea when I speak to them next week).
hrmmm… you may do well out of it, but what is your strategy ? It sounds like you will get no CG and it is a depreciating asset. The only positive is the +CF.
If you have small equity have you thought about a listed property trust type investment on a margin loan ? That too could be +CF (depending on the LPT you choose) and you would a) have some chance of CG (or loss) b) not have to worry about tennant or them excrementing in the home c) more diversified
I would not touch a mobile home!
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
neither would I.
Terryw
Discover Home Loans
Mortgage Broker
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
i’ve looked at something similar, its a cabin/mobile home in a caravan park. The park doesn’t allow permanent residents, but rents on a short term holiday bases. Its on the coast and is heavily booked over the xmas/summer holidays. I have spoken with the managers of the park and they advised the winter(melb area) is obviously quieter but they still get 2-3 nights a week with the cabin occupied.
Some of the basic figures are:
Cost: $41,000
$2800 per year rent payable to park (use of land!)
* they rent the cabin for $88 per night which would only need to average approx 2 nights per week to break even…..i think it would offer a lot more than that…. it sounds like it could offer some positive cashflow!!!Any more thoughts on this type of property??
**my current position only allows me to look at properties in this price range, am just trying to start somewhere….
Fantastic Ideas everyone… what if you took a lease option on the mobile home? this way you do not have to deal with the lenders at all.
1. You could negotiate some equity into the deal with each payment.
2. You would have more to offer a lender if your venure included a cashflowing business venture… and a solid long term lease that you have tied a potential purchaser to.On the other side of the coin you will not get any capital gain as there is no land so could be risky also…. but hey people buy do dads all the time and never complain about the cars they paid $49,000 on 2 years ago and it is now worth $15,000! – make sure you research the depreciation of this item … at the end of the day …. if you wnat cashflow then you could be on a winner…(BECOME THE BANK) if you want capital gain…. then DO NOT GET INTO THIS TRANSACTION….. my humble opinion.
Good luck with your decision
Cheers,
Kiwi
[baaa]Has anyoned asked themselves if the investment is so good, why doesn’t the caravan park operator keep it and make all the money?
My answer is that they would prefer the certainty of income from having another investor paying them a fee and getting bonus commissions or management fees if they rent it out. I would also find out how many the caravan park operators own themselves as I am certain these ones would be rented out first.
After you pay for it and realise the money is terrible, I would bet that they offer to buy it for peanuts back off you before onselling it again.
I would never get involved with something that has so many variables and such a high uncertainty of income dependent on a total stranger.
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
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