Forum Replies Created
- Terryw wrote:that is like asking which is the best food?
And my answer would be lasagna, as I like the sauce the missis makes.
Can't be to hard of a question, you must favour 1 bank more than the other because ?? and there interest rates are always good.
Thought that would be the case
22 years and you should have the principal returnedblackhotel wrote:Thanks everyone,
The deal is that I actually have already loaned him the money 3 years ago, but his accountant is hassling me that I am charging 12% on the loan. The accountant says it's way above commercial rates. I beg to differ, so I just wanted to get other opinions on the matter.Just another thing, I loaned him the money $220K @ 12% and he pays $700pw (never missed a payment), do I declare this income on my tax returns yearly or do I wait until he has paid off the principal amount, then I declare the rest as income later on.
the reason i say this, if his business fails and he re-paid less than what i gave him, then technically I have earned nothing. Hope this makes sense!!!!Hi Blackhotel
$220k @ 12% is $507.69 per week $26,400 p/a.
$700 per week would be $36,400 p/a which is nearer to 17%?Hi Blackhotel,
I have loaned my brother money for a business before and I made sure I was 50% director of the business and 100% owner of the sellable items, if they needed to be sold of, basicly he owned nothing, but he ran the business and earned a wage and made 50% profit at the end of each year, I got no wage because I did not work there but I did charge the items/business back on a hourly rate and monthy fee. eventually he was to buy me out but he thought I was charging to much and I had already made plenty of money and he should get the lot for nothing,LOL. so there for we had arguments, I did organise a bank to loan him the money and pay me out at cost but he decided he did not want the responibilities so I sold the business and walked away with a profit on the items and we both made money from the sale of the business.
He should have bought me out at cost and he would be rolling in the dollars but instead the new owner is.
Just because the bank will not loan him money that does not mean didly squat, the bank would not loan my brother money either, because they could not see how it would work and the person we bought it of had ill health and had let the business slip a little and he had bad financials, but that did not bother me because I new my brother could pull the business into track and if he failed I new I would put 100% into it and make it work.Trust me don't get your mum involved or either one of you will have a falling out with your mum.
Now it depends on the type of business to how much interest you should charge, I did not charge interest as I did it a different way as above. It really does depend on a few things, like how much you could make from your money if you don't loan him it.
I would have thought 10%-15% would be fair seen as its your brother.Now depending on how involved you want to be would be how I would be working it out and also can your brother run this type of business?
If you don't want to be involved at all then just charge interestAnd watch out as you more than likely will have a falling out with your brother,
best way to work this out is say here are my conditions 40% interest rate, you watch <delete several words – moderator> how grumpy he will be.I am not trying to put you off loaning him the money but make sure you lay out everything on the table know matter what it may be. and ask him to tell you everything he thinks even about the rate you will charge etc and what he will do if the business falls apart.
Sought it all out before you do anything and ask heaps of questions, after all of this you will work out wheather you should proceed or pull out. and get a lawyer to draw up the papers. make sure he can run the business, and make sure the business financials are not cooked when buying the business.If you don't proceed I am more than happy to borrow the money at 10% p/a secured against property interest paid monthly.
I hope everything helped
Jaffasoft wrote:keiko wrote:Jaffa, you say approach solicitors for finance, would you know the interest rates they charge? and are they loaning out there clients money?
ThanksI don't know off individual interest rates for any particular place or person but private lenders will be wanting to make 2.5% or so percent more then the banks i imagine and will be close to two digits. More in this current climate would probably be excessive. Relating to the persons post also they might be able to find a bridging loan until a regular mortgage is taken out later.
I just bought this up as a search but if you actually speak to people face to face and over office counters to solicitors and smaller businesses in the street etc could get onto quiet smaller places that lend out money and or they might refer you onto someone.
For example this was the basic's of basic search in google only and i also notices this firm in Melbourne offering mortgages. I searched 'private solicitors lending funds'.
http://www.equitilend.com.au/index.php?action=page_display&PageID=10
http://www.vernonsolicitors.com.au/Thanks Jaffa, I will look into this.
Basicly if you buy a house for $100,000 and you pay $7,000 pa in interest and $2,000 in rates and insurance and allow $1,000 for maintanance which totals $10,000 per year and your property returns you $12,000 per year, then you are positivly geared but if the property only returns you $5,000 per year then you are negativly geared, if it returns $10,000 per year then you are neutraly geared.
Now the author that says you only use the bit against the loan is incorrect, that is a stupid way to look at it, because if you have 40% mortgage you don't want to be only looking at a return of $4,000
when I buy a property it must return me 100% of the purchase price and all other costs involved, stamp duty renovations etc
your money is also worth something, so you need to get a return from it.Jaffasoft wrote:You don't mention if you have any equity in other properties? Why does one bank from the next know that it's account conduct.You need more cash or more security to offer a bank or some other lender perhaps door knock private solicitors or search private solicitors in google to borrow from but will be higher interest rates. Have you sold your car and furniture yet? Can you apply for a credit card (i wouldn't do this myself but maybe you could).
Subject to finance clause seems strange that is what a subject to finance clause is there for.
Jaffa, you say approach solicitors for finance, would you know the interest rates they charge? and are they loaning out there clients money?
ThanksI beleive you should really check your statements, I have not used watchdog or any other but I have done my own calculations and every month there is an error on my variable loans, If your no good at doing your own calculations then I reccomend using watchdog or another.
you will find errors, I have seen $200 go out one month and other months it might only be $50 then it might be in your favour by $20 but very rarely, I think the banks know exactly whats going on.I am also keen to know the answer on that
renosell wrote:Hi,I currently own a home with a $400k mortgage and have about $500k in equity.
Should I use all my equity, I can't afford to make the repayments.
How on earth do I get ahead then???
Maybe this is an option, loan me the money, I will then pay you $50,000 per year interest only over 5 years and then after 5 years you would have made $250,000 profit and then I pay the $500,000 back in full on year 5, so you would go from $500,000 today to having $750,000 in 5 years.
Your solicitor draws up the contract at my cost and my solicitor would look over it before I sign. Easy.Banker wrote:I understand your predicament. Re additional 50k. The dollar amount is not so much the point – point being that aggressive invesment stratergies are always capped by equity or servicabilty or both – therefore how do you make more money and make it faster to feed your property investment ambitions??? How do you make an extra 50k, 100k or , 150k to use for depoists each year? Common problem. Re borrowing on second mortgage: What is in it for the investor if they have more equity in the transations than you? Will investors see 100% ( or close to it) gearing as too high a risk for 10%? 2nd mortgages at 14% are often subject to low lvr's e.g. If you have a 50% lend and need a 2nd to get to 70% but cannot obtain bank finance. LVR's above this on second mortgages are extreemly expensive. Maybe you will find someone with a few $M to give to you for your depoists however Im not sure what your chances are. I would be brainstorming a few other options to make money that doesn't need the same level of capital investment: or find an investor who wants to become a partner.I know ways to make more money and plenty of it but it means I have to work harder and then I will not be able to focus on my property goal, so this is not an option, I have ways to make good profits from property and this is what I want to do but cash is what I need, If I had $500k spare I could turn it into $1m with very little effort.
It depends on how the investor looks at the deal, if the properties purchase price is $1m and I can get 100% loan from say 2 lenders for $1m, yes I purchased it for $1m and yes it is 100% but the true value of the property is a minimum of $1.250,000 which really means the LVR is only 80%, So there is not as much risk, only 80%, yep you could say you paid a million so thats what its worth but this is not the case because the identical property next door sold for $1.3m and I know that is also acheivable on this property but the vendor was under stress or the bank repo it and I heard about it so thats why i only paid a mil.
I have freinds that know me very well and know what I can and have acheived and have offered me money to invest in property, but one problem there in NZ and I am here and the exchange rate is crap at the moment so if they sent it now and the rate swings the other way well then I will take a good hit, so that is out of the question,
So I guess I will keep looking for other options
Banker wrote:So have you explored other ways to make cash? E.g. a way to make an extra 50k per annum to help raise deposits and provide servicing for banks? To grow a really big portfolio you also need a good cashflow generator… If you could sort this you could buy as many properties as your heart desires!Hi Banker
Already making plenty and $50k is not going to tickle the banks front door, thats only $200k borrowing power for resi and $120k for commercial and another year to only acheive half a average property.
My servicing is no problem and I can save cash quickly for a deposit but I want to step out of this square and move onto buying triple the amount of properties I am currently buying.So borrowing other peoples money to use as the deposit, if I could borrow a million dollars privately then I could borrow a further $4m from the bank for resi or $2.1m for commercial
Banker wrote:Sorry but 10% to get you to 100% will be a stretch. If you look online for second mortgages You are closer to 18% but you still need some equity. Caveat loans can cost up to 5% per month. You need to work out a way to get some cash / assets first.Hi Banker
I did not spot to many 18% most were around 14%
I have cash and I have assets and also equity but I am running short, so I am trying to find away that will work for me so that I still have my cash and equity on hand incase of an emergency
you never know what the market may do, so I am trying to build a sheild now rather than later when it may be to late.I was just scrolling the net for personal loans secured and unsecured also business loans, they seem to start from about 7% and go up from there,
there was a couple around 10% that would probably suit my criteria but would still need to look a little closer at these.Basicly I need to find away to get my hands on cash when I need it and this cash will be used as deposits on property,
The deals I come across are normaly a minimum of 20% under valued and go up from there and I would like to start buying more of these rather than letting them go, anything with less than $100k profit is not worth my time based on a property around $400k.
The cash I require as deposits is anywhere from $100k to $500k plus, so if I was able to find these amounts I don't mind paying upto 10%, sure there's investors that will loan it at 18% but there taking to much of the iceing of my cake and I don't take risks, so 10% is where I am at for now, and then at least I know they will be paid and I can sleep without having nightmares.cool thanks banker, yep business loan but not with nab, so I guess 6 would mean I am not best but maybe excellent
if they don't want to return your email then there is probably a reason for this, maybe a slack receptionist but the way I look at it if someone can't be bothered to get back to you then don't chase them find someone that will chase you, your the person with the money that will make there business grow so if they want your money they should email you.
Does anyone know of any town planners in queensland that offer a similar deal, get council approved and I pay or if I don't get approved then I don't pay???
I think we will see a bit of an increase in some areas and then things will drop back a bit then it will sit flat for a few years and some areas may see loss or little growth, but I really think it comes down to the areas your living in, as obviously some areas will perform better than others.
you looked at the wrong rentmaster, try http://www.rentmaster.co.nz its also for the OZ market as well, approx $135
Ive tried rentmaster and its not bad
what an idiot banker, thats why hes a banker and not a property investors but still you would think he would be a bit more onto it.
so is he gonna lend you the money???
if not time to find a new banker
