Forum Replies Created
Craig, Nigel’s point is a very valid one. Often you may pay an inflated price for a good tenant, as commercial is generally return-orientated. Another thing to consider, is the potential GST issues. A standard PAYG (non-GST registered borrower) may pay GST on the purchase price, however the lender will nett the purchase price for their lending calculations
ie: PP $220,000 (GST Inc) = $200,000 nett.
You can get up to 75%, more commonly 70%, therefore you would require $60k to meet shortfall PLUS $20k GST.
You should speak to your accountant, as GST registration before purchasing will entitle you to claim this back. However many commercial properties being tenanted at time of sale can be sold “as going concern” meaning you may be exempt from GST.
If you’re looking at starting out small, small office apartments (strata titled / non-serviced) commercial units are a good starting point, as they can be fairly reasonable, good return and usually easier to obtain a tenant.
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Lancellin is a terrific spot, only 1 hour north of Perth, Im quite a fan of it. It is a tourist haven especially over long weekends and school holidays, however I consider it quite pricey in comparison to surrounding areas. Ledge Point is about 10 mins south and I believe has more to offer, but it all depends on what sort of investment you’re chasing.
On the other hand, have a closer look at Jurien. Also another tourist haven, but also driven more specifically by industry. The crayfishing mecca of the immediate north, very reasonably priced for the land on offer. I believe they’re building or renovating the marina? There are 3 or 4 new staged developments opened very recently, the more popular being Jurien Heights, 5 acre lots just out of town with views to the coastline.
I have financed several lots in this group and the banks are now quite positive in their attitudes lending in those areas now.
Hope this is of some help!
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Paula, the major banks and lenders will generally bawk when they hear about vendor terms, as they usually involve a 2nd mortgage being registered by the vendor and/or a caveat.
The contract of sale by offer and acceptance, or O&A (as used in WA) details terms of purchase including deposit and other conditions. THis is normally where your vendor would state their terms. Unless a private mortgage contract is drawn up (either through a private investor or specialised mortgage manager) lenders will not accept a 2nd mortgage for the balance of 20% as it will obviously jeopardise their 1st mortgage.
However, should you consult your vendor and they agree to draw up a contract separate to the O&A (such contracts can be drawn up by solicitors at a cost), he/she may agree to your terms with only a caveat. These can be lodged after settlement and the lender will be happy to lend 80% with their first mortgage and no letter of priority putting their security at risk.
I hope this helps?
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
