Forum Replies Created
sell it to us
!Its really a personal decision and one you'll get lots of different views on depending on what strategy people prefer….some buy and hold and never ever sell because they're into capital growth, whereas others are in favour of turning a quick profit and doing lots of these over a period of time to make their money. You need to do some comparable calculations.
If your long term goal is to retire through property as the investing vehicle, then possibly in the scenario of subdividing, building and holding them as long time rentals may be a good option because you've presumably paid nothing for the land so your debt would only be on the building. Look at the rental market in that area and see what the returns are like which would help you in making a decision.
Need to take into consideration the finance side of things as well….whether you'd be able to finance whatever strategy you decide.
Kim
Hey Barney,
residential lend based on end val wasn't a prob with any of the banks….i think its a fairly standard for lend on end val to my understanding? They'll lend on new land value + 100% of hard costs.
we're registered for gst and we claim the gst every quarter through our BAS to help with cashflow….once we sell the homes we obviously need to repay this back to the ATO unfortunately
If you're building 18homes, this would definitley be the reason why you are having to go through the business lending path. Majority of banks do 3 or 4 max on residential before they start pushing you through commercial lending.
Kim
Hey Cam,
We bought 1 in Gilles Plains last year and are currently building 2 homes as well. For that particular one we went through Westpac for the finance and they were fantastic compared to the other banks we've dealt with. They lent us 80% of the new improved land value (ie. the value of the 2 allotments as if they had already been subdivided) + 100% of the building costs which is pretty much the norm with most banks except Westpac were better than the other banks because they lent us the money based on just council approval and didn't require deposited plans etc which alot of the other banks do want!
We got a lowdoc through westpac but only downside is you can only borrow in your personal name…i.e. no trusts/companies etc.
not sure that i've answered your question directly but hope this helps in some way??
Cheers,
Kim
p.s. Our blocks are approx. 330m2 each and the bank valued them each at $115K. Your estimated end valuation of $320K may be a little high given that there's only 1 or 2 homes in the area that have sold around that price and they were above average sized homes. The majority of them are high $200K's (if your block is situated in the PAE Council but if its TTG Council then there are no comparables whatsoever) so i'd work on worst case scenario rather than the $320K just in case….only a suggestion
Hi Mee Chee,
Thanks for sharing your recent success! I've heard from a few people NAB is an option as well but what we've found is it must really depend on which branch or lending manager you see because they all give different answers…..Go to 3 different branches of the 1 bank and we'll get 3 different answers to the same questions! Its soooooooooooo frustrating.
I think we'll investigate NAB further as a few people seem to think they will do what we want……….I'll check the LoDoc side of things as well Richard – not that i don't trust you but i just wanna see what they tell me.
I'll let you know how we go!
Man finance is just 1 big headache
Hi Misty1,
We've tried that. We even got a property manager to write a letter saying they intend on managing the leases once we sell. The bank still didn't believe because they saw on our credit report that we currently have several other 'big' loans which are obviously developments..
we're still hunting….can't believe its becoming this difficult?!thanks for replying
!
