Forum Replies Created
Thanx again Rob.
Yep, will be refinancing a couple of loans and will be using offset and L.O.C combinations. Have done calculations with my accountant and will review situation on a regular basis.
Any excess funds will go on the loan for the new purchase as this I/P will eventually become PPOR.
Originally posted by The Mortgage Adviser:Originally posted by maximus:I’m trying to get equity through lines of credit against my I/P’s to use for deposits as well as service the loans into the future.
I don’t know why you are looking for a LOC but what concerns me more is your comment above. If you need a loan so you can service other loans, I would be advising you not to borrow any more money. You will be destined for disaster especially if tenants move out which is very common in the current property market in many parts of Australia.
Robert Bou-Hamdan
Mortgage AdviserHi Rob
Thanx for your input.
My situation is as follows; have numerous I/P’s which are virtually neutrally geared, own my ppor. Intend on getting access to equity (through L’s.O.C) to use for a deposit on another I/P as well as servicing the shortfall on just that I/P loan for a period of approx 10 years. It’s similar to using a cashbond for the same purpose.
The difference with the new I/P is that I intend on moving into it in X amount of years.
So with current loans taking care of themselves (not to mention increasing rents over the years to throw into new loan if need be), you could say that it is akin to living off equity except that instead of buying toys I am buying something (new I/P) that will increase in value.
Don’t forget that when the timing is right and I decide to move into new I/P that I can sell my current ppor and use the funds from the sale to pay down loan.
Thanx again
Hi Terry.
If your I/P’s were slightly negatively geared, would you just deposit the shortfall from your personal account into your I/P l.o.c or would you wait for a tax refund and deposit that into your l.o.c?
Just curious.Thanx
Originally posted by Terryw:I use a LOC on my PPOR. But I do not deposit incomes etc in there. I use it merely for investment expenses and deposits.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Hi.
What sort of interest rate do these loans have?
Also, I posted earlier on about giving an unencumbered property as security to get access to a L.O.C., would that qualify for one of these loans?
Thanx
Thanx for that guys
Originally posted by Terryw:inless you go for an asset loan or no doc loan.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Hi Terry..
Dont know if this thread is in the right section but any way……could you please explain how an asset loan works. Is it similar to accessing your equity through a line of credit? What sort of interest is charged on this type of loan?Thanx
Hi Maximus
When applying for low docs, the only proof of self employment needed is the ABN. They may also ask what sort of business you are invloved in and you will have to list an income.
When applying for an ABN, you cannot use a name, other than your own, unless you have registered that name with the department of fair trading. Many people just use their own names for business, and get an ABN.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]
[/quote]Hi again Terry, thanks for the info. Just to clarify, if I apply to get an ABN you said “they (lending institution)may ask what sort of business I am involved in”. What, in your opinion, would be a feasible response if I wanted the loan for investment purposes?? And, “they may ask for an income”, what income could that be? Could I put down rent received from I/P’s,(or would I put down the anticipated rent from the I/P that I am trying to get the loan for) if so, would this be ok with the ATO or would it not matterThanx for your help.
MartyHi Terry.
Just because you have held an ABN for two years, won’t lenders want to see that you have been active with your “business”. By that I mean, can you just get an ABN to make it easier to qualify for lo-doc loans in the future, namely 2 yrs away. Also, when getting the ABN, what sort of business name would one have to submit, or could you just put “Joe Bloggs Enterprises” on the application form? Wont the ATO or future lender want to know at least what type of business you are running?
Thanks
MartyOriginally posted by Terryw:I guess it depends on how you define unemployed.
It would be a good idea to set yourself up now with a ABN so that you would qualify for a better grade of low doc/no doc loan. Most of hte good ones want to see 2 years history of self employment.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Realize this is an old thread, please excuse.
Was talking to someone recently (also interested in property investing) who mentioned to me that they were advised by a mortgage broker to get an ABN to tie in with their property investing. I was having a think and was wondering what the benefits are (also negatives). Can it help future loan applications?Do you need to actually register a business name when applying? Any info appreciated
Hi.
What are the new application and settlement fees?
How about “Geysers and Galses”
Originally posted by Monopoly:Example 1:
Bought PPOR in 1981 for 27K
(turned into IP after 2 years)
Sold it in 1990 for 550KBought IP in 1993 for 175K
Sold in 2002 for 925KJo
Hi Jo.
In regards to the above 2 examples, would you mind sharing where these properties were and did you do a lot of work, i.e repairs and/or reno’s, on them.
Thanx
MartyOriginally posted by accigar:Great to hear the success stories. I’m a real newbie…. whats PPOR / IP / IIP ?????
Thanks.
A.C.Thanks,
A.C.
Hi A.CPPOR= Principal place of residence i.e your house
IP= Investment Property
As to IIP, unsure. Anyone else….
Also for your information, if you see +CF, this signifies positive cashflow and obviously -CF signifies negative cashflow (or negatively geared)Hope this helps, hang around and I’m sure you pick up things as you go.
Regards
MartyHi all.
I’m guessing that break costs in an existing loan may stop people refinancing as well.Regards
MartyHi there geo and others.
Geo, please dont take this as me being argumentative but I query what you say about later on, repaying your loans asap. I’m not saying I dont agree with you, but have recently been thinking that the (extra) money you pay back on your loans could go towards deposits for more I/P’s. Sure, your debt levels are rising but so is your capital growth. Why not leave this world owing the banks, I’m sure your next of kin won’t mind getting stuck with your debt because they’re also going to get your assets.
What do you think.
Regards
MartyOriginally posted by geo:Hi Summer,
initially youd want to have your IP on IO terms in order to secure the deposits for other properties. Later on, it’s best to repay the loans amount as quickly as possible so you pay less interest and your ROI increases.
Regards,
Geo.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
I’m also with the 4 I/P’s. Even if you did achieve greater growth with the Hunters Hill property, such an area would demand a very high rent hence less people being able to afford it which could equate to longer vacancies. Would be great to be in a position to have both, i.e the 4 cheaper properties AND the Hunters Hill property.
Just my thoughts.Regards
MartyHi there Ali G. Family and friends probably mean well but ask them the position they are in WITHOUT investing and then ask yourself if you want to be in their position, that is (probably) with nothing to show for years of hard work. I initially had the same problem but had to change my mindset before starting on the investment journey. My advice is to talk to like-minded people (as yourself) and do your best to ignore the negative people (bit hard when it is immediate family). Be positive and take action. Best of luck.
Regards
MartyHi all. Good topic, enjoying the read. Seem to be following you Kay. Personally I would like $50-100k per annum for starters through passive income but would like to continually be adding to that through more acquisitions.Bruham, you mentioned $1,500,000 (you actually had another 0, but I think this is what you meant) at 5%, would this figure be in cash or equity???
Regards
MartyKay, have you thought about getting some sort of transplant with a monkey, like in “The Fly” movie. Just kidding, honestly.
Regards
MartyHi all. I think if you are looking to diversify your investing, then finding a mentor (or member support system) would be a good idea. My personal situation is that I own property/ies but not too savvy when it comes to shares/managed funds and the likes, so by using someone that Greg is referring to I could accelerate my investing. I think this is what Greg is talking about (correct me if I am wrong Greg).
Regards
Marty
