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  • Profile photo of fxdaemonfxdaemon
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    I am interested in knowing more about this company too if anyone has actually done any loans with them.

    Appreciate sharing your experience and feedback.

    Thanks in advance.

    FXD

    Profile photo of fxdaemonfxdaemon
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    NCCP

    Thanks Terryw, I assume you mean for resi lending only, right?

    Profile photo of fxdaemonfxdaemon
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    Profile photo of fxdaemonfxdaemon
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    Thanks guys all your comments help.

    It seems the reliable way is to have lots of money to begin with (:-)) so you can buy multiple properties at low LVR
    and even at 10% interest rate, they are all cashflow positive :-).

    The other challenge that you have mentioned is that with the rental income the lenders will only take 65%-80% but will
    any lender lend based on rental income alone without a PAYG type income or is this where low-doc comes in?

    Seems to me that if I want to go full time investing in property (no development), I need to structure myself such that
    all rental income should go into one company from which I draw a PAYG salary. So when I go to the lenders to organise finance
    for the next purchase, I can “proudly” show my stable & constant PAYG salary plus new property income to make the application
    straight forward?

    Am I thinking along the right direction? What kind of expert or consultant I should speak to? My accountant has no clue
    when it comes to questions related to full time property investing “business” :-)

    Thanks again.

    FXD

    Profile photo of fxdaemonfxdaemon
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    Thanks guys.

    I am not good at scoping or phrasing my questions well usually.

    The main question to clarify is assuming I have sufficient equity,
    will continuing buying of cashflow positive properties impact/reduce my
    future borrowing power from the lenders’ perspective since all the
    properties paying for themselves anyway.

    Thanks
    FXD

    Profile photo of fxdaemonfxdaemon
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    Thanks guys.

    I guess choosing the right tenant is the key here. However, I’ve seen many retail businesses suddenly
    close shops without any tell tale sign even for some popular franchise brands.

    Although by right outgoing tenant should (must?) find and re-assign the lease to new tenant in reality
    how often does that actually happen?

    Therefore, I really want to understand what mitigations available to minimise the loss before I get
    into the retail sector of the market. I am not 100% sure what seems to be over heated retail sector
    translates to more stable and constant cash flow is my main concern.

    Thanks,
    FXD

    Profile photo of fxdaemonfxdaemon
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    Does anyone do lease doc with LVR at 75% or is 70% the max in the market?
    How about lowest ICR?

    Thanks
    FXD

    Profile photo of fxdaemonfxdaemon
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    FXD
    Sounds like you mean lease doc loans.
    A non recourse loan is one where the lender will only take the security property but not chase the purchaser for any shortfall on sale. These exist but are rare.

    Ok thanks I always assume lease doc also implies
    non recourse and vice versa.

    Any idea anyone offers such product featuring both?
    I assume the rate may be high even if it exists?

    Thanks
    FXD

    Profile photo of fxdaemonfxdaemon
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    Hi Terry, Corey & Benny

    Knowing all of you guys are experts and having your responses here is very enlightening to further educate my knowledge.

    So when I mean non-recourse loan, indeed I mean a product with the following 2 features:
    1. lease doc based on property income only, I should have made that clear.
    2. max LVR of 65% where in situation if thing turns bad, the max one lose is 35% equity + other costs.

    The reason I am focusing so much on this right now is I am maxing out on borrowing and I keep
    wondering how do other experts in the field seem to be able to achieve perpetual borrowing
    well past official retirement age. That’s the goal I am trying to achieve without having
    borrowing dependent on another income, eg: PAYG salary.

    If like what terryw said perpetual borrowing seems impossible, then may be it’s just me day
    dreaming here. If the expert view is that I need to review my portfolio type, structure etc,
    then I am happy to seek out for such professional advice and get myself set up properly
    going forward.

    Perpetual borrowing is the main catalyst for me looking into commercial property and borrowing.

    Sorry about confusion that the title and original question don’t come out clear enough.

    Cheers,
    FXD

    Profile photo of fxdaemonfxdaemon
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    HI Ethan

    That’s exactly what I am talking about, refinance with original lender #1 for a LOC or something for that $76K
    and use it + own cash for next buy. But to access that $76K lender will need to assess serviceability as what
    terry said.

    My question is how will lender #1 assess serviceability for the $76K LOC when it will be 100% serviced by a new
    purchase but *before* the new purchase is actually made. You see my point ? Will lender #1 say wait *after* you
    buy then come back and we can re-assess, it’s really a chicken and egg situation.

    Also, I don’t want to lock myself into a position where all my borrowings are tied to same lender simply for the
    ease of accessing existing equity.

    In theory it seems, it’s do-able but I just don’t know how to go about accessing existing equity *before* a new
    purchase is actually made and yet that equity is needed for the new purchase.

    As I indicated before, I want to establish a strategy to achieve perpetual borrowing well into retirement without
    having serviceability dependent on PAYG income because I will then have no PAYG income, therefore the thought of
    using non-recourse loan to begin with.

    Anyone can help?

    Thanks,
    FXD

    Profile photo of fxdaemonfxdaemon
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    Thanks Terry. OK so my understanding is not too far from the truth ;-)

    So if the $76K is to be used in conjunction with my own cash as equity for yet another new commercial purchase,
    with another non-recourse loan at max LVR 65% and a net positive cash flow position, how will the original lender
    (for 1st property from which I am to borrow $76Kequity) assess the servicing of that amount as it will be fully
    serviced from rent income of the new purchase?

    I am trying to see if it is possible to achieve a perpetual borrowing situation without selling any property and
    independent of income from a job.

    Thanks,
    FXD

    • This reply was modified 8 years, 1 month ago by Profile photo of fxdaemon fxdaemon.
    Profile photo of fxdaemonfxdaemon
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    Hi guys,

    Are the above investment rates same for commercial as well?

    Thanks,
    FXD

    Profile photo of fxdaemonfxdaemon
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    Hi Colin
    I have no idea as the MB use their respective own aggregator which looks like another layer of obscurity to me.
    But thanks for suggesting that.

    Thanks,
    FXD

    Profile photo of fxdaemonfxdaemon
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    Hi Colin,
    No, all my properties are across multiple lenders already and not crossed.

    Thanks,
    FXD

    Profile photo of fxdaemonfxdaemon
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    Ok thanks Colin although when I was scrolling down the screen first seeing first line in your response I got excited :-)

    Anyway, the actual situation when I said no more borrowing I mean I have heaps of equity but lender will not extend/increase existing
    LOC limit or let me have an additional new LOC/loan facility. The reason is simply that no servicing power left.

    However, I suspec that if I use the existing LOC as 10% deposit for the next purchase which will return a rent income, the lender may be
    willing to let me access equity in existing properties say another 10% to 20%, while the new property itself will secure a new investment
    loan and also brings in rental income.

    Am I correct or am I being overly ambitious here?

    Thanks
    FXD

    Profile photo of fxdaemonfxdaemon
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    Hi experts
    A simple question.

    Does going to MB across different states improves one’s borrowing capacity instead of just stick with the same state due to convenience
    and accessibility reason?

    Or that has little, if any, effect at all?

    Unfortunately I am in the exact position that after discussing with couple of local MB I was told no more borrowing possible.

    Thanks,
    FXD

    Profile photo of fxdaemonfxdaemon
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    The real concern I have with companies & the sales
    pitch of their consultants saying things like:
    “I also own a few such H+L properties in the same
    development …” is that it sounds almost like Amway
    in a larger scale in the properties industry.

    Don’t like that at all but that’s just my opinion.

    Profile photo of fxdaemonfxdaemon
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    Hi Terry
    Thanks for your explanation to help me narrow the question further.

    My question arises from the context that if I need to transfer my ex-PPOR to my brother, both CGT and stamp duty will apply I assume.
    However, my brother has already been living in the property for about 7 years or so and I have been absent for same duration.

    No question about SD as bro will pay as per any other open market sale transaction.

    CGT wise is confusing. My name on current title, my name on some of existing utility bills, insurance & rate notice.
    Should I better off just move back to the same property for 12 months to “clean” up the confusion and then do the transfer instead?
    That way, the property is re-purposed as my PPOR and for the period of 7 years of so when I didn’t live there (as proved by AEC name
    registration) it wasn’t rented out as such but I allowed bro to live in it.

    Will the re-purpose of PPOR then exempt it from CGT on my part?

    BTW, I am assuming that with the above off-market transfer scenario CGT is still payable.

    Thanks,
    FXD

    Profile photo of fxdaemonfxdaemon
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    Macc sounds like u r definitely in a better situ than myself when we bought our first one
    back in 1996 and it is the typical worst house in the well not too bad street in my case.

    Home ownership added quite a few extra costs then we didn’t budget in and we even had to
    borrow part of deposit at higher rate to make the deal happen. So overall it definitely
    wasn’t the case of cheaper to buy than rent case like yours.

    But we bit the bullet and went out on a limb (:-)) for it based on two simple and naive reasons:
    1. Why pay others’ mortgage
    2. It’s a form of forced saving

    Did it work out ? Yes it did and far exceeding what we originally wanted to achieve.
    It could have gone other way too but if you have done your homework well and know well
    that you are determined to weather the (financial) storm for next 5 years then go for it.

    Best of luck.

    Cheers,
    FXD

    Profile photo of fxdaemonfxdaemon
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    Thanks Corey.

    Are you saying that the lease back rental may be
    inflated by vendor to distort the true value of the
    property?

    Thanks
    FXD

    • This reply was modified 8 years, 4 months ago by Profile photo of fxdaemon fxdaemon.
Viewing 20 posts - 41 through 60 (of 78 total)