Not sure if u r still active over here …. but which Aussie lenders lend for Japan properties?
What are the Aust asset securities for? The equity/deposit part or the entire purchase costs of
the property in Japan? What is the max LVR?
Any possibility yet for using Aust equities/cash as deposit and borrow in Japan to buy properties
there? What is max LVR?
I have maxed out my borrowings capacity right now and wondering if non bank lenders my next best
alternatives for accessing equity plus new investment loans?
I think keeping the loan open but not drawn may be an option and it may be used
as a cash flow buffer for other IP related incidental costs. At least that’s the
theories and ideas many other property experts seem to suggest.
Thanks for releasing the digital version before April which is a bonus before the long weekend.:-)
Is there a video recording version planned to be released at a later time besides the MP3 audio?
The reason being that I find it hard to follow the MP3 audio when you were talking to the price graphs
etc as per the PDF notes for the Melbourne market update for example. I simply can’t figure out which
graph you were referring to at different time during the presentation.
I assume that a video recording, if available, will have you presenting in front of the relevant
graphs and notes and therefore will be easier to relate to the data.
One more thing, on some of the graphs, the numbers along the axis are quite blurry. Are there higher
resolution version available?
Cheers,
FXD
This reply was modified 6 years, 7 months ago by fxdaemon.
Although I don’t have a solution to offer, I have personally experienced such situation but being
the opposite to your case ie two neighbours fences encroaching into my property.
Due to the circumstance being that I was doing a multi-unit development at that time and the local
council planning rules dictate that developer is responsible to put up new fence if existing one is
damage as a result. Therefore, I negotiated with one of the neighbours to re-align the new fence
according to the surveyed title boundary line. The other neighbour is more aggressive and refused to
cooperate so I figured that it’s not worth my while.
I see this kind of unnecessary dispute the result of failed responsibility of local council really.
Try to encroach your fence line into public park and see what reaction you get from the council. To me
it’s double standard how it handles such situation.
If local council can lay down the rules for fence height for example, then by right they can quite
easily go one step further to lay down the rules for fence and boundary line to prevent situation of
fence encroaching over boundary line.
After all, council is being paid hefty rates that only go up year after year and all it takes is
introduce compliance check similar to that for issuing of certificate of occupancy only after criteria
are all ticked off fine.
It just comes down to lazy and failed local council who doesn’t want extra responsibility but only the
rates.
But please do share your resolution if you come to one.
For some very successful boomers who started their investing journey 30 plus years ago, they will
adamantly advise going for growth first before cash flow and that makes perfect sense in that context.
I personally feel that there should be 4 different quadrants of environments or contexts every investor
should learn to navigate, ie:
– negative cashflow, negative equity. This is probably where most people will start out on their own
without any knowledge, experience, education or guidance. The associated costs like stamp duty will
set one back 5.5% as negative equity immediately in Victoria.
– negative cashflow, positive equity. This is probably the most common transition for investors lured to
negative gearing and able to hold on to the IP for few years with rising market. Just a progression
from the previous quadrant. It’s also the the one most people struggle to break out of due to lack of
cashflow.
– positive cashflow, negative equity. Mining town maybe?
– positive cashflow, positive equity. Holly grail for most investors want to be and many boomers
are quite comfortably retiring here already I suspect.
When I first started out, there was really not much choice or option known to me to strategically
position myself into a more desirable quadrant due to lack of knowledge, experience and guidance.
It became a starting position by default not by choice.
Wish someone would have explained the above concepts to me when first started out and provided the right
advice and guidance on how to handle each and navigate as quickly as possible to the most desirable end
goal. It should be like an All Weather (borrowig Ray Dalio’s hedge fund strategy here) approach for
all four contexts.
Now, I am leaning more towards the CF (first) camp and then worry about growth later as I keep running
into brick wall with servicing of new debts!!!
Are you registered or required to be registered for gst and conducting an enterprise?
No I am not registered for GST. We didn’t know anything about it at the time when we built and selling
this soon was not part of the plan to begin with.
Can a trust or a corporate trustee ever be a guarantor for another trust?
Meaning, if person A is a director of corporate trustee X (for family trust XX)
and is also a guarantor for X itself. When X becomes profitable further down the road,
can it then be the sole guarantor for a new trust YY for financing new property
purchase or development without same person A as guarantor as A is also the director
if YY’s corporate trustee Y?
just apportion the original costs between the two lots, and any specific costs for the one property would add to its cost base, as long as not previously claimed.
Thanks Terry.
Does it have to be “major capital improvement” to reset the new cost base after the subdivision?
I still don’t have a clear understanding what major capital improvement means even after speaking to my
accountant and he just refers me to that ATO link.
Unless you have significant cash funds – start in residential and build your portfolio up there until your borrowing capacity is exhausted. From there you can expand into commercial which allows you to access alternative borrowing capacity calculations/products which will allow you to get yourself to the next level.
The general gist is to build your equity base in resi, then diversify into commercial whose deposits are leveraged from the residential IP’s.
If you’ve otherwise got a mil in cash and ready to invest – you might just want to jump straight into commercial.
Hi Corey,
Is it much more difficult to grow equity in or release equity from commercial or both?
I am very new to commercial, ie started tracking the market actively for 2+ years only but did
notice many deals have been transacted at very low yield and/or strong growth compared to the last
transacted price for the same properties.
If the lender asks you would need to disclose personal guarantees given so the lender would then assess you on the full debt of the 3 trusts. If they don’t ask about personal guarantees then you would be assessed on your personal debt and the debt for the borrower in quesiton.
Hi Terry,
Will I be right to assume if all 3 trusts (in OP’s example) take out lease doc loans, then there will not
be personal guarantees required by lenders?
Thanks,
FXD
This reply was modified 7 years, 2 months ago by fxdaemon.
I happened to speak to my broker today about using positive cashflow from commercial deal to improve
future servicing.
Not sure if what he said was due to recent tightening or what, but I was told even for commercial
lenders they also stress testing an investor’s all other existing borrowings, including resi and
commercial to arrive at new servicing for a new commercial loan!
The other thing he said was, to improve servicing it will be best to be able to demonstrate other
regular source of income, such as shares dividends, to lenders. He went on making an interesting point
that (again may be due to the recent tightening but I am not 100% sure) such alternative income, as long
as it’s not from yet another investment property (resi or commercial), will be assessed more favourably
vs positive cashflow rent income.
If above are true, it seems a debt recycling strategy is more critical in demonstrating one’s servicing
power and therefore may be viewed more favourably by lenders?
Just out of curiosity about the deal you mentioned above.
Did the borrowing, purchase and cashflow achieve an improved servicing overall for your client so that
he/she can continue investing more easily in the future?