Forum Replies Created
Welcome to the forum [
]I may be able to help you out – where do you live? Commercial is a bit specialised and outside my area but I know some very good brokers who specialise in this type of lend.
I think if your property is metro-based and as you say the new lease is in place, an 80% lend isn’t out of the question as most commercial lending is revenue not resale value based.
[
]
Mel
[email protected]Hi Kingsdown – great deal!! [
]I’d recommend seeing a broker who can shop around for you as you have a fairly unique income/structure set up which will require some tweaking to get through and with a good deposit it may actually be worth going low doc – about 40-50% of them will do construction but as picja says location may be a concern.
Let me know if you’d like any help.
[
]
Mel
[email protected]Hi folks,
This one can be really tough and the lenders keep changing their minds so I’d always recommend getting a broker to make sure you get the best deal. With genuine savings (eg money in the bank or shares you sell or equity in property you’ve had for more than 6 mths) you should be able to get loans up to 95% with lenders familiar with the area ie lenders with branches in those small towns. With non-genuine savings up to 90% is possible, tough but possible, 80% is achievable -and frankly I wouldn’t accept paying an extra 0.2% in interest, let alone 2%!! Keep shopping!
[
]
Mel
[email protected]Welcome [
]I have never done a flip but I understand that in Qld it is possible to have a contract with buyer 2 to pay vendor 1 on settlement, meaning you don’t pay a penny and it’s just a paper transaction that the CoT went into your name on it’s way to buyer 2 – a conveyancing firm is probably the best place to ask. In Qld you as buyer 1 do have to pay stamp duty though – other states don’t, conveyor will know.
[
]
Mel
[email protected]Hi folks,
A word of warning from a brokers point of view – these are not ‘normal’ properties hence not subject to the ‘normal’ lending levels. At best on the 45sqm unit you would be able to get an 80% lend from the likes of Rams, maybe 85% from Adelaide bank but under 40sqm I don’t know anyone who’ll touch it, sorry.
Another thing is that often in the fine print of the contract with the management group is that all fixtures and fittings (carpets, lights, furnishings etc) have to be fully replaced every 5-ish years – I’d find out if that was why these are on the market now at 4-5 years old before proceeding.
The returns look good so don’t give up if it’s where you want to head, just make sure you have plenty of deposit available.
[
]
Mel
[email protected]Welcome aboard [
]Hmm, yes, food for much debate. The short answer is that it’s a risk minimisation strategy that ensures that in years to come you are more insulated against events like extended vacancy and inc. interest rates. Also below 80% LVR you avoid lenders mortgage insurance which is significant and ‘lost money’.
There are plenty of reasons not to as well – time value of money, maximising income leveraging ability etc so depends on your overall strategy I think.
[
]
Mel
[email protected]Interesting article, thanks, and another reason people should educate themselves about the strategy behind the property investing decisions they are making and not just following the Jones’ so to speak – Steve’s tip for today is rather apt I think!
[
][][^]Howdy,
Looks good on return but just beware that from lender’s point of view if units are too small (45 sqm livable floor space minimum) or in regional area you may be looking at tipping in up to 50%.
Sounds worthwhile trying though!
[
]
MelHi folks,
Thanks for the tip Mortgage Hunter – haven’t been online for two days, was in Melbourne listening to a developer Peter Comben, who’s a friend of Steve’s, and was totally inspired AND am thoroughly delighted that the Lions get another opportunity for glory!! [
]Slow Boy I’d be more than happy to have a chat about your plans and see whether you’d like me to assist you – I’m based in Clayfield/East Brisbane and can be reached on 0438 548 235 or email below. Home Loan Connexion are affiliated with AFG and other independent Mortgage Managers and I’m sure could give you the service you’re after and deserve.
Good to be back finding out what everyone’s up to.
[
]
Mel
[email protected]Hi Peter [
]As you no doubt know lenders are a bit shy of low/no income situations but if you hook up with a good broker and aim at positive cash flow properties you could actually do quite a bit with your available equity, cross-collateralising the security against your home. Lenders will take 80% of the rental towards servicing the loan so I’ve given you an example of making two purchases with your equity:
Current value – $150K
New IP1 – $100K
Rental income – $200pw = $10,400pa @80% = $8,320pa
Loan $105K (extra $5K to cover costs) over $250K equity
Repayments approx $7,700 paThe investment income covers the loan.
This is fairly basic but you get the idea?
[
]
Mel
[email protected]Hi Chezzamum,
Unfortunately yes being without any income is a bit limiting. Have you thought about selling your house and renting it back for a fixed period eg 2 years?
I’d run it by a broker to see what they can come up with for you – probably cross-collateralising on your current residence would be the way to start.
[
]
Mel
[email protected][
] Thank you!Looks good – just rolled off my printer! Just a note though the View online option didn’t work for me – may be gremlins in my laptop, not sure.
[
]
MelHi Aaron,
Aussie started a bit of a revolution 7+ years back with cheaper loan rates and fortunately/ unfortunately the big banks and other lenders worked out they could match him (and his backers) hence we all enjoy very good rates now leaving Aussie without an edge in the market.
They appear to be trying to compensate for this by establishing an ‘independent mortgage brokering’ arm, but I don’t know how well it’s being received as they quite rightly struggle to be perceived as fully independent of their own products which of course they still promote.
Re Arty’s comments – every bank has its good operators and bad operators who can stuff up parts of the process, eg Settlement, and naturally Aussie are one of them, not good for you though obviously, glad it’s finally okay.
A lot of the people I work with are ex-Aussie and they say it’s got it’s good and bad features like everyone else, but I do note not many of them defer business to Aussie anymore … that’s my two cents.
[
]
Mel
[email protected]Yep, they’ll can it AND won’t help you getting a loan with the same lender the next time. Luckily there are lots & lots of lenders.
[
]
Mel
[email protected]Hi Matt,
Providing you are finding strong property deals you should be able to get finance as an asset lend – but we are talking about 70% borrowings so your $20,000 deposit (providing you’ve got other $$ to cover costs) equates to a $66,000 property. If it’s rental return is strong enough you may be able to get the ratio up to 80% – ie a $100K property, probably as a low doc starting at about 7% interest reducing over the first 2-3 years.
Other strategies are limited due to your lack of employment history but not insurmountable. Probably best you speak to a broker who will advise you for free about all your finance options and don’t take no for an answer!! Also look around for an equity/income partner eg parents, sibling, older mate with a least a year’s work experience who you can invest in your first 1+ properties with splitting the profits and hopefully capital growth.
Good luck Matt!
[
]
Mel
[email protected]Hi Alex,
If you have approx $20K in spare savings to put towards a deposit, leaving about $9K for costs and contingencies, then a $250K loan looks like this:
Deposit – $20K = 8%
Loan – $230K
Repayments I/O at 6% = $13,800pa = $1,150/mth
Repayments P&I at 6% = $16,550pa = $1,380/mthThis is a big ask on a single $35K income and hence without your job most lenders will be very hesitant to take on this loan. As I said above continuity of employment is a good thing, or as Simon suggests get the loan now but be warned that as a PPOR with no rental income it’ll be a BIG stretch on your partners income alone.
Hope this provides an idea of the hurdles you face – never give up though, on both of your incomes it’s very achievable.
Good luck!
[
]
Mel
[email protected]Hi Alex,
I’m a bit confused – what are you paying $800 of Monthly Repays towards that will stop when you leave work?
Generally, the less income you have the harder it can be towards a new loan, however if you do start a new permanent job before applying for your loan next year in a similar profession with no probation period and minimal break then most lenders won’t be too fussed. If you are uncertain about new employment I’d hesitate to rush into debt unless your partner can cover all your living expenses.
Hope this helps.
[
]
Mel
[email protected]We are also in Qld and specified it in our 60 day settlement contract that after finances went unconditional we had access to the property to do ‘minor repairs and improvements’ – the vendor agreed as the place had been empty for over a month and yet the real estate agent still went a bit nutty every time we tried to do something – sometimes it’s the ‘middle people’ who are the problem!!
Note we knew that if we didn’t settle we would have done our dough, but it was fairly minor (safety switches, few wall repairs and paint) so not a big concern, and saved us over two weeks of hassles trying to work around furniture after moving in.
[
]
Mel
[email protected]
]
]
][^]
] Thank you!
