Forum Replies Created
I’ve also heard some great stories about Woodridge properties increasing in value, good on you for investing there despite it’s bad reputation. I think the whole south-side along the railway line is going up and up at the moment.
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Mel
[email protected]My fave – “Just do it”
I also firmly believe in the karma fairy – smile & the world smile’s with you, give and you’ll receive, and all that jazz!
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Mel
[email protected]Hmmm …. from the finances side I think a bit more research would be in order for this one before you leapt either way, starting with a broker to get an idea of your borrowing capacity under both scenarios, and an accountant to tell you the impacts. I know NZ is capital gains tax free (lucky for you!) but there may be issues because you earn and pay tax in Oz to consider.
TerryW on the forum is a Sydney broker, plus I know others, if you would like their details drop me a line.
From the r/estate side – are there any sub-dividable properties left in Sydney??
Good luck!
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Mel
[email protected]Hi David, welcome aboard! [
]I’m a mortgage broker not an accountant, but from what I’ve learnt, if you guys are serious about buying many many properties I’d probably recommend setting up a discretionary trust with your co. as trustee and buying all new property in the name of the trust. You would sign for the loans as director of the trustee company but assets are protected and long term many tax benefits as well.
You may need to obtain deposit finance via a Line of Credit (LOC) loan over your PPOR but I’d keep the loans for the new properties seperate. The interest on the LOC over your PPOR is a tax claimable expense as the purpose of the funds is investing. Also cash flow positive properties are pretty easy to self-service with enough deposit to cover costs and min. deposit to bank depending on the area you’re buying in.
Hope that makes sense.
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Mel
[email protected]Manos,
If you can buy this outright it might be a very good addition to your investment portfolio if it’s in a booming holiday town. On the flip side be wary of the size of 1 bedroom units. Ask the agent what the ‘living area’ is – ie excluding balconies, exterior storage areas etc as these don’t count in lenders eye’s and if you wanted to use this unit as security in the future and it has below 50 sqm ‘living area’ you might get a nasty shock. [
]. True serviced apartments are also a bit hard to lend to or use as security, plus if it is a serviced apartment get a solicitor to read the contract very carefully to see what other obligations you may be taking on, eg paying for new furniture and fittings regularly etc.Keep us posted!
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Mel
[email protected]Hi,
I agree that this forum is a bunch of volunteers here to learn from each other and people expecting forumites to spoon feed them is a bit unrealistic.[|)]
The truth is of course that there are plenty of people who are money rich and time poor and/or happy to admit that analysing and negotiating individual property deals is a bit outside their skill set but still want to get into IP’s – and if you fall into these categories there are plenty of buyer’s agents out there who can help you find great property investments. I’d recommend them over two-tier marketers plugging individual developments any day of the week and they are usually pretty cheap, around 1.5-3% of the purchase price, considering the time and expertise you are buying.
Marketers just need to sell X no. of properties, job done. Buyer’s agents need to build up a referral base longer term by putting people into good property investments so they keep coming back. If you want help, why not try a few. [
]Cheers,
Mel
[email protected]Hi Granny/Mark – welcome to the forum [
]There are many ways to rearrange finances and loans to continue investing, but sometimes the banks say no because you are genuinely unable to support your loans if they are negatively geared and you simply can’t cover the difference with income. Have you thought about selling something (eg the very heavily neg geared property) in order to swing your cashflow around to allow you to keep investing?
For anyone to give you accurate advice a lot more info is needed. Feel free to contact me offline, or any of the other helpful brokers on the site, to find out more about your options. I am Brisbane based, TerryW is in Sydney, Stuart is in Melbourne, to name a few.
Cheers,
Mel
[email protected]Hi Comdom,
Sounds like you are storming ahead, good work! In order to help you with loan options I need to know three more things:
Q1 What gross rental income do you get from your three IP’s?
Q2 What interest rates approx are you on for your different loans?
Q3 How recent is your valuation of $820K and where did this figure come from ie you or an accreditated bank valuer?I am guessing you have everything with one lender at the moment? If you wish to keep borrowing it may be possible to rearrange your existing/new loans with different lenders to improve serviceability.
Either post the info on line or feel free to email me directly.
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Mel
[email protected]NO!! (sorry previously said yes thinking I was supporting steve – got it back to front!)
Let me think about all those great tips and philosophies a bit more … hmmm … still NO!! [
]Now enough of the whining martinw and let’s get on with it. [
] Under ying yang philosophy I’m expecting several Constructive comments from you in the very near future.[
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Mel
[email protected]Welcome aboard Bassett [
]Good first post – and one with lots of curly questions attached most of which can only be answered by how close are you and your brother? From a brokers perspective for lending purposes – if you are joint applicants the banks will want to see joint ‘benefit’ from the deal ie splitting rental income, but it’s not too hard to organise normally.
Re whether you should or not – I’m not sure from your description whether this is all for your benefit or joint? Are you doing it to help each other or because you don’t feel you can do it on your own? Have you seen an accountant and a broker to figure this out with you? If you two have never invested before, and there are wives, other children etc also potentially altering how things pan out, I’d try to avoid it myself. JV’s for short-term are great, for long term are messy.
Good luck!
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Mel
[email protected]Do semi-circles count?
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MelThat Einstein joke was Fab Fun – had to put it aside until about 10pm then felt pleased as punch when I solved it almost an hour later …. took another hour to wind down enough to get to sleep, much to my partners disgust!
This new one’s got me stumped though, sending me dotty!
TGIF
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MelHi Jay,
There are many ways to skin this cat, but assuming that you have minimal other debts and plan to use the money for investment, then yes I think one option is a line of credit where you can draw out the funds as deposits for other IP loans that are independent of your current loan, giving you flexibility for tax, buying and selling property frequently and more loan options. This is also easier to do if the new IP is positive cash flow, the less it hampers your serviceability the better, but with your incomes you could get loans up to 95% no problem, depending on location. The downside is that if you wish to draw greater than 80% of the value of your property ($136K total, ie $36K above your current loan of approx $100K) then you’ll pay lenders mortgage insurance up front even if you don’t draw down the funds for many months.
Another option is to cross-collaterise against your current PPOR loan which will probably have less set up fees than a LOC and allow you to borrow greater amounts while minimising payment of LMI – depends who you bank with of course and how that compares to what’s available.
On the incomes you and your partner are earning you have lots of options re the tax side but remember if it’s cash flow positive it adds to your income, if it’s cash flow negative it deducts from your taxable income.
Good luck!
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Mel
[email protected]Hi Sandrar,
Shame you are having trouble – if you really want to keep both and still have time have you thought about or tried a different property manager … surely if the one you are with is not performing you are quite at liberty to find another. Also did you have landlords insurance? They cover vacancy periods too. Maybe someone else in WA can help more?
Re selling – it seems as though selling the unit would be the better short term option but maybe the worse long-term option. Do you have any spare equity you could apply to draw out first to cover costs short term before going down either of these routes?
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Mel
[email protected]Lawry I think we get your point, no lectures or name calling on either side really needed, and yes more of this on forum fun would be a great idea too. On the flip side these are clearly marked as riddles only and 3 out of 2000+ threads isn’t that upsetting surely. Several thousand people float through this site and don’t all read every thread anyway so selection is personal too.
Back to the darn Fish problem …
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MelI’m booked in for the Brisbane seminar too, should be a hoot, and educational of course.
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Mel
[email protected]Hi Pebbles,
Sorry to hear about your break-up but looks like you are keen to get on with it. You could go to your current bank and ask them whether they would give you a construction loan for the subdivision and do not worry if you are knocked back – as long as you can explain why to the next lender you approach (ie it was outside their lending guidelines), up to three knockbacks don’t cause too much problem. The good thing about using a broker is they will shop around and try to only submit the loan to someone who’s already comfortable with the deal – also tell your broker EVERYTHING ie breakup, all other debts big and small, and defaults in the past even on little telco bills etc, so that they can get the best option for you.
Regarding name on the loan – depends whether you are both on the Certificate of Title at the moment. If the answers yes, it’ll be easier to do together, and obviously financially beneficial to you both.
Good luck with it and drop me a line if you’d like a bit more info.
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Mel
[email protected]Mike Mabey is one of our broker gurus in Sydney who does commercial and residential lends – his contact details are:
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Mel
[email protected]Hi Bear,
Any lenders who use GE as an insurer should be able to lend to these postcodes up to 80% at least. I do note they are fairly small towns so as Simon recommends I’d stick to the big lenders to kick off – pick big banks which have branches in these towns.
Sub-prime lenders may be an option but it costs, I’d try all the big guys first.
Good luck!
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Mel
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]. True serviced apartments are also a bit hard to lend to or use as security, plus if it is a serviced apartment get a solicitor to read the contract very carefully to see what other obligations you may be taking on, eg paying for new furniture and fittings regularly etc.
] Under ying yang philosophy I’m expecting several Constructive comments from you in the very near future.
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