Forum Replies Created
No, unless you get them for a ridiculously low price. For most investors they just tie up equity and stop them from doing other, more profitable things.
daniellee wrote:APerry wrote:Whether or not you use a trust to buy shouldn't have an affect on your servicing.Hi APerry,
When we went to the bank, they calculated our borrowing ability and said that as we already had a PPOR and guaranteed the trust loan, we were at our limit and so no more money was available. This was because as Directors of the trustee company, we had to show that we could service the trust loan in the event of a default.
Whether you are guarentors of a loan to a trust or have taken out the loan yourself makes absolutely no difference in a servicing calculator. If the advice you received was that you could lend in your own name, but not in a trust structure then it is very unlikely that servicing is the issue. The only reason a trust could impact on servicing would be if a lender did not allow -ve gearing benefits to be used because they were quarantined in the trust, but this would have no impact on whether or not you could use a trust for a new purchase. The advice you received doesn't make any sense.
Whether or not you use a trust to buy shouldn't have an affect on your servicing. However, If you are sitting on a $100K capital gain, sell the IP and pay down the loan on the PPOR or use it as a further cash contribution for the new PPOR once the current one is sold. You can always draw back equity for deposits to buy again.
There are a number of reasons to use trusts to hold IP's but one downside is that you can't pass through the -ve gearing benefits. In your situation, if you think -ve gearing is the way to go you should stongly consider if the benefits outweigh this disadvantage.
v8ghia wrote:Hi magic32I am a big believer in relationship banking – ie, if you have accounts etc or a history with a lender, and are reasonably happy why go elsewhere to theoretically save time or money. Got a complex deal, time restrictions, your local branch of your favorite bank has a snotty nosed acne covered still living at home 'kid' as their 'Senior Lender' Lo-doc, or lazy – maybe – but other than that I would suggest going to the source directly to be a better option. Some lenders consider broker deals a higher risk than direct ones, particularity those that use credit scoring – sorry, but that is true – so it could be the difference between getting a loan or not. That said, standing by my first comment, if you have an existing relationship with a broker you are reasonable happy with why not continue to use him/her.
CheersI agree with some of your points, but definately not all. For a start, you can have a relationship with a banker, but if anybody thinks that the institution places any value on them individually then they are sorely mistaken. The fact is that when push comes to shove credit officers have the final say and they don't have relationships with anyone. It is true that you can sometimes get loans through the system faster going direct, but not in every case, and most times this doesn't matter anyway. It is also correct that some lenders give broker clients an automatic lower credit score, NAB in particular, however, not every lender credit scoes and even when they do it mostly only matters for high LVR loans.
People also shouldn't reduce the role of the broker to simply finding the cheapest product and handling the application, of course these are roles that all brokers play. Investors need more than this, they need advice on loan structuring and which products suit their optimum structure best and often assistance with how to go about building their portfolio. The ability to obtain finance is often the biggest issue in being a successful investor and buying the wrong type of property.
Regards
AlistairHere's a little bit of Gossip from those interested in the market up there. There is a rumour that an additional coal port has been slated by the Qld State Government for the northern side of the current Port. Bundaberg hasn't currently benefited from the coal boom, if this rumour is true it may start to see some similer benefits.
Hi Mark,
The usefulness of super depends on your age and investment horizon, as well as other factors such as your current net asset position and income. It is a lower tax environment for many people and there are numerous startegies that can be used, which include placing money into super, either deducted or non deducted, which can lead to very substantial tax savings.
Regards
AlistairIn terms of finance you can fund a 3 unit development with either a residential facility or a commercial facility. Residential is cheaper and you can potentially borrow more money if you can get it mortgage insured, but you have to meet servicing requirements for the peak debt and make monthly interest payments. Commercial lenders will lend you as a ballpark 80% of your costs, it is more expensive but you can capitalise interest and servicing is not such an issue because of this.
When you acquire the land, unless it already has permits I suggest you just use a residential facility, as it may take you 12 months before you are in a position to start building. If you go this way, once you have the permits and apply for contruction funding the valuer will value the land on a project specific basis, to do this they work back from the end value, minus costs and what they consider to be a suitable marging, what is left is the value of the project, the Project rleated site valuation. This will likely be considerably higher than the staright land value, and the uplift forms part of your contribution. If the project works, this is often sufficient to enable you to get 100% of contruction costs.
I hope this helps.
Regards
AlistairWattoette wrote:To APerryI found Jennie Brown on the net like many others…..The mini course that she is sending me each day is a very short paragraph on a different subject each day, not a lot of info really…….Same problem though, how do I tell if she is really legit before I go passing over all my personal financial information….It is still only via websites, testimonials are written on their sites, but like I have said anyone can write those. I want to talk to real people who have dealt with her before or anyone of the internet companies that advertise. This is way too big of a financial cost to just pass on to anyone.
They can give me names of people, but whose to say it is just not peole on the scam with her, how do we know these are not scams……Do you see what I am saying, you hear way too many horror stories regarding house buying, sales etc.
Too many internet sites are dodgy and I am sceptical of developers as they go broke all the time…..I want definate reassurance they are legit. As I dont live in any major cities, and am fairly remote I dont have access to just drop into an office and have a chat. I have also been told that anyone that only has a PO Box and not a physical address maybe dodgy and most of these companies dont even have addresses.
So you see its not just as simple as using one or the other……….I want assurances they are legitimate before I hand over my personal info to anyone…
That's fair enough. I know Jennie very well, she is my client actually and so to are a number of the people who do her courses. I also personally know Nigel Kibel, who has also posted on here and runs a mentoring program, and also the guys, Simon and Brenadan, who run RESULTS Mentoring which is marketed through this site. For what it is worth, as well as knowing all of these people personally, I have a large number of clients (I am a finance broker) in common with all three, and have done so over a number of years. All the people involved a very experienced, knowledgable and have strong ethical values. All services differ, but all have merit and I have seen students of all three do exceptionally well and other do nothing.
Probably if you post something on any of these three specifically you will have some of their students respond. I would assume there would be a lot of RESULTS students, past and present, in particular who post on here.
Regards
Alistairjerkygirl wrote:HiI wont comment good or bad, but I will tell the facts. Almost one year ago, my partner settled on a property in Atlanta using 888 and Top rental returns. The property was marketed as a nice townhouse in a family area. A year on, and still no tenant and the recent change of property manager gave the report that he was too frightened to go into the complex on his own due to screaming etc and that it appeared more like a badly managed project housing estate than a family area.
My partner is not sure what to do with the property now, as we have dropped the rent and still no tenant. We assume that selling will not even get his money back.My advice, be very careful who you trust!
jerkygirl
This is exactly what happened in upstate New York a few years ago and is exactly what is going to happen in a lot of cases this time around. Where there are huge prospective gross rental returns there is generally a good reason and they rarely translate into strong net rental returns.
There used to be a group in Upstate New York which was an association of investors who were active there, mostly US residents, the guy who ran it put out a report where he detailed his returns and then transalted them into an hourly rate, based on the amout of work he had done on maintaining his portfolio. The guy made money, but the returns were not spectacular and the hourly rate was ordinary. I'll dig it up and post it if i can find it as it is a very interesting document.
Wattoette wrote:Thanks everyone, I appreciate your feedback. I am in the process of doing Jennie Brown's 9 day Mini course in Property Investment and I am finding this helpful, I still have a lot to learn though.I understand what you are saying about mentors, but would still like a more proven track record on a business before I start to give them all my personal information as you hear way too many horror stories about people getting caught up with dodgy companies with property, especially in the QLD area.
The company I am looking at is called Investment Mentor in QLD and they seem to be quite good, they have had their ABN listed for around 8 years, they are also known as MRD Realty which is a part of the Investment Mentor business, they halp from start to finish with your investment needs. I would just like to make 100% certain they are legitimate and there does not seem to be anyway of doing this.
I am about to google office of fair trading to see if there is anything relating to them on that site, but otherwise apart from testimonials on their site how do you go about locating legitimate people that have dealt with them before so you can speak to them and feel certain they are genuine.
Any feedback welcome
I don't know anything about investment Mentor, so can't comment there. But i'm curious, if you are alrrady doing something with Jennie, and you've found it useful, why don't you join her mentoring service?
I have clients that are mentored by Nigel who posted above, Jennie Brown and RESULTS. I wouldn't hesitate to recommend any of them. All are different, but all are run by people with a lot of experience and good ethics.
Regards
AlistairI'd be interested to know what LVR's and rates LoansUSA are getting for their clients.
white_goodman wrote:Nigel Kibel wrote:That's right we find properties before they are forclosed. We take them over and part of the deal is that they have to leave the note or mortgage in the property. So in most cases you are taking over a property worth between $120,000 and $140,000 that will cost you between $20,000 and $30,000 with an existing mortgage of say $80,000. In all cases the properties are positive cash flow and in all cases have equity. To me this is a much better deal than buying cheap second rate properties in slum areas for $30,000. In our market property prices have held up. In many of the other markets being promoted we have seen falls of around 45-50% since 2006. In Texas prices have not only held up well but will more likely rise faster than most of the other US location.could you explain this to me cos it doesnt make sense to me…
if the property is 'worth' between 120-140k and is going to be foreclosed why would you pay effectively a heavy premium for it, or was it originally bought at around $180k? And if property prices have held up why is their so many foreclosures?
The property is worh say $120K with an $80K loan in it, this leaves equity of $40K. The client pays $25K, so they get instant equity of $15K and also take on the mortgage. Its the same as buying a property worth $120K for $105K, paying a $25K deposit and getting your own finance. <moderator: delete advertising>
I hope this explains it better.
Regards
AlistairHi Kev,
It's good its in Melbourne, you have a number of good non bank options for financing it. I'll respond in detauil to your email, but basically you will be able to get 70% of end value (inclusive of GST) if you presell one unit, 60% with no presales. Banks will offer you 80% of costs exclusive of GST as a maximum.
Regards
AlistairHi All,
Something Nigel should emphasise more is that the properties his clients are buying come with loans in place that are assumed by the buyer (something you can't do over here). One of the major issues with the US, for Aussie Investors, is the difficulty of financing properties on decent terms. <Moderator: delete advertising>
Regards
AlistairHi Kevin,
If you post up a summary of the numbers for the the thgree unti development, i'd be happy to give you some advice. If you have a decent margin in the project then capitalising interest is not a big issue, it actually makes construction projects easier to fund as it removes servicing from the equation. Otherwise email me at [email protected] and i'll answer your questions privately.
Regards
AlistairYou can still fund student accomodation, just the options have reduced. We got an approval on a bulk purchase earlier this year of over 30 in one hit on pretty reasonable terms, and havce financed some individual ones recently without too may issues. It really comes down to the strength of the borrower.
Regards
AlistairHi Neil,
The broker is not based in Sth Yarra by any chance are they?
There are a lot of brokers that ask for large upfront payments, claiming they are for the lender, after issuing an expression of interest. If they have not disclosed who the lender is you can be pretty sure their isn't one. I suggest you ask them to disclode who the lender is and also to show proof that the money has been paid to that lender. If the lender has accepted money then they should have ordered a valuation or done something, ask for evidence of this.
If they won't provide this info I suggest you complain to COSL as a first point of call, amnd mayby the MFAA or FBAA, whichever they are a member of.
It is an acceptable practice to charge an upfront fee. We charge a small upfront fee against an indicative terms letter as there is a lot of work goes into preparing a development application and there are a lot of developers who shiop their deals around and/or do not disclose issues such as credit file problems or a lack of further equity/cash that can kill deals after all the work has been done. However, we refund this if we fail to come up with a formal offer from a lender.
Regards
Alistairjdesil wrote:Cashflow Capital Pty Ltd cashflowcapital.com.au, what can people tell me about this company, does anyone have any actual experience of using this company as a buying agent, I would really like to hear about anyones experiences with them?
Cheers
Hi Jdesil,
Cashflow Capital refer all their finance equiries to my company, so i have a lot of clients in common with them. Like any buyers agent, each of their people have leanings towards different types of properties and different areas. They have very strong relationships with agents in a number of high cashflow areas and the people buying in those areas through them definately buy better than individual investors trying to do it themselves. They also have relationships with a few developers in diferent areas and through them have off market opportunities as well. I suggest you contact Nigel who has already posted on this thread and have a chat with him, he can fill you in on their services better than I can.
Regards
AlistairHi David,
Yes i have a client who has a business matching builders with land owners who need equity to get their develoments over the line. He is in Europe fore the next couple of weeks, but if you want to email me your contact details and some basic numbers for the prospective project I'd be happy to get him to contact you. You can get me on [email protected]
Regards
Alistair
