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Then if worst comes to worst go to a non-conforming lender, if the figures work for you. They charge a higher interest rate, depending on circumstances.For example Liberty start at 6.99% approx and can go up to 10% or higher, however, this is normally for customers with major credit default issues.
Just hang in there, it’s only early days yet. ANZ are pretty slow for turnaround times, a lot of the time. ANZ is probably your best bet to start with, though, as they have a bit more pull with Mortgage Insurance than other lenders.
Definition of small;
Some lenders; 4-8 units, 10-20 lots of land (still for the inexperienced a good project manger will go a long way)They will start to look closely when loan amounts go over $1.5m for inexperienced, although is still possible to go higher.
My suggestion; start off with 4 units, the next do 10 lot land, then jump to 8 units and 20 lots. Then your pretty well right.Try this link;
http://www.infochoice.com.au/banking/calculate/flash/stamp-duty.asp
That will help you out with stamp duty etc.
There are lenders and private also that will fund more than 100% of development projects – Gross Realisation, is the term as mention previously, by others.
However, to elaborate a bit further, some of these lenders will fund this amount to people with no experince in developments. So if you are thinking of starting developing or don’t have the cash flow or need to fill the gap, these lenders can be good.
The cons; (for first time developers)
Only small projects to start with,
A good project manager will neeed to be in place.
It will need to be quite a good development to be looked at. For Example, min 25% -30% return on project.
Expensive interest rates(11-12%) and also a lot require a % of the profit. Anywhere from 25%-50%.The pros;
Better taking 50%-75% of net profits, than 0%
Can get a few developments under the belt to move onto bigger ones and/or lower rate lenders.
Can finance what the banks won’t.Another point;
Depending on the lender, even though the marks on credit files come off after 5 yrs, 7yrs bankruptcy, they (lender)can still see the marks on your file, even though you can’t (if accessed publicly etc.).
Reason being; they pay big dollars for access to files that date back up to 15 yrs.
So, don’t go saying you didn’t have a default when you did 9 yrs ago.
PLEASE NOTE:
This access to credit reports are mainly done with big lenders and on home loans. Mainly LMI has this access.
So, personal loans etc I stick to the normIn regards to the topic.
Send the Stat Dec to the lender who made the default, if no success, go to the banking ombudsman. You’ll see some action then.Well, I tend to agree mortgage advisor, however
Richard, just trying to get something for free!Oh yeh, I’m not using put & call on properties from mum’s & dad’s, it’s for excatly what you use them for, development sites.
I have done many of these.
There are also a few other tricks, that may assist you also. Email me for details.
Anyway to answer your questions
1. Didn’t realy find the seller, just asked every seller for the properties that was being purchased.
Sweettalking – none really, just explaining it clearly and having it all prepared by a solicitor.
I will say this though, the vendors who were most acceptable to this method were business people, investor etc.. The general mum’s and dad’s didn’t like the idea, due to different reasons.2. 2nd mortgage Interest Only 1-5 yrs
3.Yes
4. As no.2 , but also the interst rates would vary, depending on the vendor, some vendors wanted quite a high interest.
5. Borrowing power has an impact if done as a 2nd mortgage, however if this is a problem, back to the vendor to renegitate.Any questions, please do not hesitate to contact me by email
Thanks Ibuycashflow. Do you have any contracts or documents, for examples, that you may be able to forward to me? Or know where to get them.
I am wanting to purchase a few properties and on sell using this method.
I think both of you are have valid points, however also a little uninformed.
Firstly, I admire your direction and determination for having your eye on your goal. Especially, after copping some flack on this site.
I think everyone here wish they had started as young as you (even if it is gaining knowledge and not doing the practical side yet)Now, As for saving for your IP after grade 12, great! However, what are you going to do, while the equity grows for you to purchase the next one?
It’s not a full time job to look after one IP!
If you are going to keep saving for the deposit on your next IP, where are you getting the money from? Work at Woolies or Mac Donalds?
Why not go to Uni, work part-time and save. Why not study something related to property investment. There are many fields – you could be an accountant, architect, developer, valuer etc..What I’m trying to say is;
You could work in the industry and not go to uni, while investing, For Example; Real estate agent. However the point is, the professions mentioned above, by going to Uni, in the end,you will be earning a lot more money, than not going to UNI. Making your investment portfolio increase with ease.I think your Mum just wants the best for you.
Just make sure you go into a field that you are passionate about, and the field is going to produce the income you desire to live the lifestyle you want.Agents need to abide the local laws in regards to signs. So call the local council, and ask what is the time frame they are allowed to be there!
If it’s gone past the allowed time, complain or rip it down.If it is in the allowed time frame, get some local drunks that walk past in the middle of the night to have some fun with it!
Thanks for the feedback!
Mel,What is Bernad’s returns?
Mel, funny you mention they can do more than one deal.
A developer in particular has increased his projects to $120m in a relative short time.
The link is below, if you would like to check out, one particular developer, I was considering to invest with.
http://www.codevelopaustralia.com.au/investor.htm
What do you think?
Michael R – what is SFH?
What your talking about is already being done.
However the company doing it works like this.
Company pays for renovation (let’s say $10000). Their fee is 100% ($20000). Registered as a second mortgage($20000).
When vendor sells, company recieves fee at settlement, vendor recieves the surplus.Documents are drawn up giving the vendor 6 months to sell. (Normally the company has the vendor list the property exclusively with their reccommended agent).If the property is not sold in 6 months or the vendor decides not to sell (which happens a lot of the time, as they like the improvements), they will extend home loan or refinance etc.
A lot of due dilligence is carried out on the vendor before documents are signed etc.
For Example; a finance assestment and application is taken. Area of the property relevant sales etc..Miracle Home Loans
Negotiate your interest rate!Some of the best deals currently;
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