Forum Replies Created
Hi Grant,
If you have 20% equity in the land at the moment you may be able to borrow up to 95% and use this to fund the subdivision. Otherwise, if you have fixed contracts in place and can substantiate all of the costs of the subdivision (engineering, surveying etc) and can service the debt, then you should be able to get a loan against end value (65% is normal, although you could get a bit more with a higher rate). Hope this helps.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044
email: [email protected]Hi Thames,
I assume your talking about the western side of the peninsula. The yields are vey low on this side, as there isn’t a huge rental market and property prices are pretty high. However if you have a look on the other side there are some pretty good yields available. I bought a property at the start of the year in Somerville, which is leased at a yield of 6%. This is not uncommon all around the eastern side of the peninsula.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Christine,
You are quite welcome to ask your broker what commission they are paid by various lenders. As Terry says all of the standard lender’s charge roughly the same, it would be 0.6-0.7% upfront and 0.25-0.3% trailing commission. No decent broker would take commissions into account when recommending products, although I have just refinanced a client who was wrongly put into a high commission paying non conforming lender by his previous broker, and as a result was paying around $15,000 a year too much in interest. So it is prudent to ask the question.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Cata,
I should add that a number of currencies are available but you typically need to be earning in the same currency as your loan. Your repayments will fluctuate with the currency changes so you are effectively playing the foreign exchange market using your property as collateral. If you are borrowing in a currency with particularly low interest rates, such as yen, this risk is partly offset by rate difference. I hope this helps.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi CATA,
As Richard says it is possible and offered by the major banks. Typically the conditions are maximum LVR of 75%, you will be required to keep the LVR below this if currency fluctuations cause the LVR to go above.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044You should be able to do a little better than 0.8 I would think. We managed to arrange a .92% discount off the standard variable rate for a client borrowing a similar amount with multiple properties not long ago, so you should be able to get at least this discount for one property (that would be a total rate of 6.65% variable at the moment).
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Adam,
I suggest you have a look at the website of Chris Lang of Gardiner and Lang (www.gal.com.au). The site has a number of excellent free resources related to commercial property and I can personally vouch that Chris Lang is a very professional operator.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Thanks for the post Lisa. A client of mine purchased a property 5km from the Brisbane CBD early last year and has achieved a good positive cashflow from renting out by the room. He also lives in the house, which makes it a lot easier to manage but certainly looks a viable way to increase cashflow.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Sharvonie,
You are able to obtain finance for New Zealand properties through some Australian lenders from Australia. Using a LOC for a deposit is fine.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Elka,
The problem is that the name of your brother-in-law’s brother is on the title of the property. Therefore legally your brother-in-law is unable to borrow against the property without his brother providing a guarantee. As Stuart says you could go guarantor for a loan against your own property, but not your brother-in-law’s unfortunately.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Elka,
Your brother-in-law would be able to take money out of the property in his own name providing his brother went guarantor for the loan. They would have to come to an agreement, but this situation is quite common. I hope this helps.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Ananda,
If they can demonstrate their income they could do a full doc at 80% through a major and thus access excellent rates. If they need to go low doc there are still plenty of options available but they would likely have to take out a non-resident loan or else go through a non-securitised lender so as to avoid mortgage insurance, so rates would be a bit higher. Would really need to know the full situation to give an accurate quote but I hope this helps.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Snowflake,
How much equity would you need to take out to complete the reno? You may be able to refinance to 85% without LMI if this were to be sufficient. Otherwise, as Terry says, it would be a reasonable risk to go ahead with a valuation in order to access more equity.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Rzech,
It may be possible, but you would need to come up with 30% deposit to get this through a traditional commercial lender at reasonable rates. Possibly you can take out a second mortgage to fund the difference, however the rates will be quite high and you need to be wary of the cost becoming uneconomical. One possible way you could get around this, if your father were to agree, is for him to leave some money in the deal as seller financing to help you come up with a 30% deposit. As long as the income were sufficient to cover your outgoings at a reasonable level, there are a number of lenders who would be willing to fund such a deal. However there are quite a few other factors that would come into play such as where the property is located, the valuation on the property, the type of commercial property and the type of tennant.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044I will second Terry here and say that 8% is pretty poor for an investment such as this. There are many better commercial investments out there in my opinion.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Thanks Richard,
That is interesting. It is also interesting to note that fixed rates are going up with the majors at the moment.
Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Jac-dow,
Why is it that you believe 100% loans are not a good option? The terms can often be quite reasonable on these loans. They do not suit everybody, but they can be appropriate for some situations.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044DLPP,
Buying in cash does circumvent the requirement of doing your own due diligence. For those obtaining US finance, the lenders are generally very careful, and often will not just carry out an appraisal but also an engineering report and possibly building and environmental reports. There is no way that any lenders would loan against houses in the “no-go” zones. In this respect financing purchases through a US lender can force people into doing some of the necessary due diligence required to ensure they don’t get scammed.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044I have had a look at the John Roberts site as well and my suggestion is that you run very hard in the opposite direction.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi BillyT,
As Michael suggested the book How Commercial Property Really Works is a great start. You can also go to the website of Chris Lang (one of the authors) at http://www.gal.com.au. I have some experience in dealing with Chris and he is as professional an operator as you can get. I have also heard good reports about Michael himself from a number of clients.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044
