hey guys first visit to this compandy of good people.
Problem I have is the finance peoples wont loan to owner builders, whether I own the land outright.
I was told I need a contract from a builder for them to loan 80% of the land. Spoken to a few brokers and banks.
Strange I am a licensed builder,.
Any ways how I can get around this ?
My plans are ,:
for my present ppr to loan the equity to the max, quickly build a display home( by appointment only) on the land as a investment property where I may claim tax on the interest only for both properties , then the equrity increase from the new build, invest into reno ,s to flip or flap ..
Do I need a ppr ?
Any suggestions and discussions can help all.Regards dougiebuilder
You need to get a bit creative. Make it work in your favour.
Terryw | 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
Hi Dougie
Firstly welcome to the forum and I hope you enjoy your time with us.
Think you are talking to the wrong lenders as there are certainly lenders who will finance deals for owner builders subject to the normal loan conditions.
i assume you can verify your income and everything else is ok should be a problem.
Certainly wont fall into mortgage insurance territory but 70% even 80% is doable
Richard Taylor | Australia's leading private lender
Just talking out loud, but can’t you get out a building contract from the pile and sign yourself up to contract with your own company?
Matt, they still would class that as owner builder
Terryw | 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
Terry: Not if you are XYZ pty ltd as the builder and you as the client.
If you are building a display home, why don't you just get a business loan? (yes higher interest rate but you need the working capital as a business expense not investment exercise).
Technicallly yes that is the case, but you know banks. If it is the same person behind the scenes they treat it the same. I had a client doing this a few years ago and they ended up buying in a brother's name.
Terryw | 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’m trying to work out from the original post if there is enough equity in the existing ppr and the land to do it without worrying about a build contract. It does say the land is owned outright and there is equity in the other house.
If you took a line or credit to 80% of the existing house and 80% of the land would you have enough money?
You only need to worry about the construction component if you are reliant on the end value for security…
Terryw wrote:Technicallly yes that is the case, but you know banks. If it is the same person behind the scenes they treat it the same.is that really the case Terry, how often would the bank do a company search on the Builder (unless it was Joe XYZ & his company was XYZ Building Co. P/L)?
Yes, Scott, good point. You may get through if they don't check too thoroughly.
Terryw | 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
If they are a director of the company it will come up on the credit check.
Hey there guys thank you for your replies really is help ful.
Our ppr we have now I have max ed to the limit, I bought the land( $172.000)from my equity and have been sitting on it through the LOC. for 3 yrs my PPR is worth bout $450,000 and increasing I hope.
I have about $30,000 left to with draw to finish my 5 bedroom home,4 car accommdation, 2 bathrooms ,separate lounge,and a 18m2 office,as we all know us builders leave our homes until we are ready to move on. Hopefully should gain $450- $500 rent for the ppr which in turn will be an investment, where I can have the interest only tax deductable, I think thats the plan.
Not sure how to capitalize on the land finance, trying to get finance away from my ppr.
Guys do you think that I should start a family trust ?
I only suggested display home because it promotes my building compandy. http://www.dougiebuilderhomes.com still a builder learning the ropes with excitement like getting a new breath of life.Scott No Mates wrote:Terry: Not if you are XYZ pty ltd as the builder and you as the client.If you are building a display home, why don't you just get a business loan? (yes higher interest rate but you need the working capital as a business expense not investment exercise).
Thanks scott will do my research on that subject , great idea, will let you know what my findings will be .
Do you think that the land should be under the compandy ?regards dougie
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