Forum Replies Created
Hi Wilko,
I ‘all’ you are wanting to do is investigate possible loan restructuring (if necessary) then I suggest a chat with a couple of brokers.
They won’t charge a cent and will only be paid if you do restructure.
Please note I am not advocating wasting their time but rather if there is a genuine ‘better way’ they should tell and assist you and will earn their money if, in fact, you do restructure.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mel,
Bugger – you type too fast[biggrin]
But in answer to the question – the $26K is deductible because the funds have been used for investment purposes – even though security is provided by your house it is the purpose of the loan which determines deductibility.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Karl and Rita,
You are on the right track but with a couple of clarifying points.
Assuming the bank recognises th evalue of your property is $125K they will allow you to lend up to 80% of this ($100K) less your existing loan ($74K). As such you have $26K of equity you can use towards the deposit and costs on other property.
Assume you find a property for $100K you find a lender who will provide an 80% loan ($80K) with the balance $26K (assuming $6K loan/purchase costs) from your line of credit.
Under this set up you will have three loans. One for $74K on your own home, another for $26 being the line of credit and the third for $80K being the investment property.
In each instance you can go beyond 80% if you were prepared to pay Loan Mortgage Insurance and if the LMI providers were prepared to accept your locality as suitable security.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Wilko,
If you want a financial advisor with a leaning towards property as the core investment vehicle then I recommend Navra Invest http://www.navrainvest.com.au – they have offices in Sydney and Brisbane.
Be aware they are growth focussed and as such may not suit you.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
And factor in very high insurance premiums for buildings when doing you calculations.
Elvis, is Gorgon project really going to have that much of an effect on Exmouth property – when I was living in the Pilbara many Hedland, Karratha & Dampier employees flew in and out from Perth where most of their families were based.
Given Karratha to Exmouth, by road (direct flights?), is some distance I would be inclined to believe the ‘Gorgon’ impact to be relatively minor on Exmouth in the grand scheme of things.
Or have things changed that much since I was last there?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Avranjes,
And your definition of high growth is?
I would suggest that finding high growth in the short term isn’t, in the main, feasible in the current climate.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Wayne,
Congratulations on your achievements to date.
I noticed from your thread that you are contemplating a trading approach to property investment.
Be aware that everytime you buy and sell property you will be hit with CGT and also stamp duty. As such your profit margins will be severely eroded and compromised over time. You may find that develop, kepp one and sell the rest is a more profitable way to go over the long haul.
Selling isn’t necessary to realise your gains – the gains you have made can be used to increase your equity levels and the funds available which then provide funding for subsequent investments.
Trading also has the added ‘X factor’ of the property market cycles and requires proeprty to be bought and sold at the right time in the cycle to maximise profits. Whereas a long term investor isn’t quite at the same mercy of the property market.
Just a slight variation on a theme for you to consider.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Wayne,
Give Patrick Thatcher a call 93809533 – he is based in Subiaco.
As with all matters tax – you will need to have a discussion with Patrick to see if he suits you.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jackie,
You could use a real estate agent to source your property however be aware real estate agents are employed by the vendor and as such are legally bound to look after their interests and not yours.
An alternative may be to consider the use of a Melbourne based buyers agent who can be employed by you. As such they have an obligation to you and not the vendor. Some people here may be able to make recommendations.
You can establish a power of attorney (?) enabling a trusted other to sign the necessary documentation. Some of the paperwork can be accomplished by fax and with some prethinking all the necessary financial documents can be in the hands of your broker/lenders ready for actioning the moment you find the property.
However I suggest that in the current climate a vendor would be prepared to have a longer settlement (make this one of the conditions) in recognition of your situation, especially if it meant the difference between sale & no sale.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Donella,
Not Richmond – but can’t let a chance to get my post count up go by.
Look to the left hand side of the board and click on ‘forum boards’ this should show a drop down menu underneath. One of these ‘buttons’ is a search button – click on that and off you go.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi James,
I recommend a search on Victor Ollis and/or Country House and Land to see what others think. This group has come up from time to time before.
I suggest you read the fineprint and, if necessary, seek legal advice with a view to getting the lease away from CH & L related parties.
It is easy to be wise in hindsight but a 10 year management lease is too long and you lose too much control over your property.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by DD:god guys did you actually read the question. I have to wonder about your ethics if you recommend to someone about to loose 1/2 the family income to a new bub(we had that 4 years ago) and you recommend more than an 80% lend.
Sorry to get heated but wild recommendations really upset me.
DD
Hi DD,
Wild recommendations? Ethics?
You will note the essence of my comments revolved around an 80% line of credit against the security of the property.
The ‘option’ of going out further is provided if Phil felt comfortable about that. As an aside just because a line of credit goes out to 90% doesn’t cost more in interest if the funds remain undrawn.
You will also notice that Phil indicates “I want to buy positive geared. Dont want to add any more expenses on a weekly basis” and as such if he is able to do so there will be some additional income coming in – sure not the same income levels as now – but in essence Phil has already acknowledged the desire/need to not add further to his weekly expenses.
Phil hasn’t indicated a swag of deposit money so it would seem that he is going to borrow the full purchase price anyway (assuming at market value purchase) of the property anyway. In effect to pay LMI, or not, is the one key cashflow difference with a 100%+ loan, with 80% coming against security of the property and the remainder from the LOC.
You will also note that I recommended against commercial because they consume more of the available loc.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Steve,
It is one thing to share ideas and network but it is a competely different matter to pool money.
Correct structures and ‘legal advice’ is required so things do not go ‘sour’ and if they do the interests of all parties is protected as much as is humanly possible.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Cristina,
Recommend you get in touch with Dale Gatherum-Goss http://www.gatherumgoss.com
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Lucifer,
Sheez – pushing out to 97% in a flattening market – I don’t think I would go there [biggrin]
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Phil,
Based on the information provided it would appear that you have approximately $100K equity available to use for deposits and purchasing costs.
This $100K + $300 mortgage represents 80% of the total value of your own home. You could increase the $100K by another $50K if you were prepared to go to a 90% lend.
My counsel would be to look at residential proeprty at the moment as you can get away with as little as 10% deposit + a further ~6% for purchasing costs. Whereas commercial lends require proportionally more as a ‘deposit’ so your $ will not go as far.
As your first step I would recommend you go back to your broker and see what sort of financial structure he recommends in your situation. Get this bit right and then move to stage two which is to look for a property.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jay,
Banks have their ‘preferred’ or panel valuers and as such you will need to use one of them otherwise it is highly likely the bank will get another valuation done anyway.
You can avoid the need to pay twice if you can find out who the banks valuers are (your broker will help) and get them to do a valuation.
When asking the valuer to do the valuation you will also need to get them to make if suitable for finance for your lender. Also confirm with the valuer that they are currently on your lenders residential panel.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Wayne,
Welcome aboard and I am sure you will get a lot of information from the people who post here.
The types of investments being promoted by IF tend to give an inflated view of the cashflow situation as they are furnished and a such there are increased depreciation deductions available to improve the cashflow situation.
Short term accomomdation is at the mercy of any tourism downturns and as such you will need to ensure the properties are located in areas that are attractive to local visitors too.
Check the occupancy rates quotes as they can be a little inflated and being new developments you will need to ensure the rates quoted are achieveable. Such property also has the need to be cleaned even without occupancy so you may find that your cashflow gets eaten away by all sorts of hidden/undisclosed costs.
Be also aware that anything under 50 sqm is a problematic lend for many lenders and it is possible you will need to raise a larger deposit (in percentage terms) than you would otherwise for a standard residential property.
Such property can really only be sold to other investors should you ever have the need/desire to sell and as such growth may be a little compromised over the long haul. On the other hand houses, townhouses, etc also appeal to owner occupiers and as such the potential market is much greater.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Devil,
As you already have a card I would suggest that an increase to your current limit may well be very quick.
Whereas if you were to seek a new card, personal loan etc a financial analysis of your situation would be required and as such this would in the main be longer than an increase to your credit card limit.
Hang around and a broker will be along shortly to give a definitive answer.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Devil,
Credit Card?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
