Forum Replies Created
Well, instead of just saying it can’t be done (or, sorry, that the ATO would be less than impressed by it), maybe you could tell me why? [biggrin]
I am new to all this and very eager to learn.
pasandbec
well, that is what I learnt off this board, with Monolopy’s ( I think?) help.
pasandbec
Hi guys,
Thanks for all the replies/suggestions/help.
We have decided to let this one go for now and concentrate on renovating our PPOR instead. Then once that’s done we’ll look at getting a 2nd IP. Hopefully our property will have gained in value and it will be alot easier to obtain finance.High flyer – our current IP (yes, it used to be my PPOR) IS actually for sale. Won’t pay any CGT (if it sells soon), in fact will make a loss, because it was at it’s peak value at the time I started renting it out. So that’s good, and even better that I can use this capital loss to offset any future capital gain [biggrin]
It is sad news that we have to let this one go but I believe most things happen for a reason and it was probably not ‘meant to be’.
It has taken a bit of pressure of me at least, although boyfriend is still quite dissapointed. I feel like I already have enough on my plate at this time, trying to find a new job and undergoing major renovations on PPOR.
Our guides are probably trying to tell us to “slow down” heheh
thanks again,
pasandbecTMA,
Here’s a scenario for you, do you’d think it’d work??
Keep in mind:
~Current IP loan amount $185,000 value $285,000
~Current PPOR loan $225,000 value $215,000
~New IP purchase price $64,000What if I took current IP loan up to 80%. Currently it’s at 64%. This would free up $63,000 in equity.
With this $63,000….
– make current PPOR loan 80% by chucking $45,000 in there
– make new IP loan 80% by using a 20% or $12,800 depositThen I’d have $5,200 left over.
Once all the loans are setup, settled, etc etc we could redraw on any of the two IP loans and use that money for new IP renovation and PPOR renovations.
Hmmmmmmmmmmm, sounds too good to be true! I must be missing something?? [blush2]
TMA,
Thanks for all your help.
I asked this question before but it didn’t get answered so I’ll ask it again….
Is un-cross collaterising two loans/properties hard to do??? Because my mortgage broker did not present it to me as an option.
Any idea whether Bankwest will lend more than 80% (with LMI being paid)??
p.s. why do you hate Bankwest?
Hi Jason,
I have been PM my rental property for almost 2 years now. In that time I have had 2 tenants. My tenants have been great and I have found PM to be pretty straight forward and simple, and enjoyable! However, I have not had any dramas with my tenants so I haven’t had anything to worry about really. But I think, so long as you read up on the relevant tenancy acts, legislation, etc, then you should be right.
It’s a good, peace-of-mind, idea to get Landlord Insurance…..just in case something goes wrong. And then all the other usual stuff like make sure you do a Beginning and End Condition Report (to accompany the Bond Lodgement), Bond money (usually 4 weeks rent), and then it’s usually 2 weeks rent upfront. Check their references, esp. if they have a rental history, and I like the rent to be paid electronically and automatically if possible, ummmmmmmmm what else? Will you allow them to have pets, smoke, etc? Oh, and the obvious one of a signed lease/tenancy agreement. You can get good templates of these online (at least for ACT properties you can).
This should get you on the right track to PM, if that’s what you decide to do.
Good Luck
pasandbec
thanks for your post TMA and sorry if I have been missing vital details along the way [blush2] i am still a ‘newbie’ when it comes to property investing.
what you say actually makes sense to me!!
it seems do-able!??If we increase current IP loan to 80% that will free up $63,000. We could then make a 20% deposit on new IP and borrow the rest (80%) from the Bank – no questions asked (right?) With the remainder ($50,200) we could do the renos we want to do on the new IP and our PPOR and still have money left over.
Could this be true, could this actually work?? I am afraid to get exicted!
Originally posted by TMA:Besides your properties apparntly being cross-collateralised, which you still have not confirmed or denied, you might be facing serviceability issues.
If your properties are NOT cross collaterilsed, it is a simple matter of increasing the loan on your first IP to 80% and also borrowing 80% against the new property. This assumes you can service the additional debt and you don’t want to pay LMI.
Without providing all the information, you cannot be given the correct advice.
ARE THE PROPERTIES CROSS-COLLATERALISED (ie: one loan over both existing properties or they are linked as security)??????
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteThey are linked as security, two seperate loans. No problem with servicability. We don’t mind paying LMI ( I think I have mentioned that a few times, lol)
I do not want to let this one go…..
[cigar]Can’t Bankwest just lend us the money for the 2nd IP plus extra (for renos) and we pay just a few thousand in LMI???
For example:
~new IP purchase price $64,000
~costs $5,000~extra money for renos to new IP and existing PPOR $30,000
~existing PPOR loan $225,000
~existing IP loan $185,000
equals $509,000 LOAN against $565,000 VALUE
which makes the LVR approximately 90%LMI calculated on around 1.5% (would this percentage be about right???) would be around $7,500
It sounds like alot of money to pay in LMI but we are prepared to pay it!
p.s. I also have photos we personally took of the place.
How dissapointing! [bawl]
I wonder if we will have trouble even borrowing money for our PPOR renovations then!!!!
Well, if anyone if after a property deal and are prepared to put a fair bit of elbow grease into renovating the place, then let me know, coz it appears we won’t be able to buy it. [cry]
pasandbec
sorry to be annoying, with so many questions, but is “un cross securitising” two loans hard to do??
i’m just wondering why my mortgage broker didn’t think of (and suggest it) himself?
he kept saying to me “it’s the PPOR that’s the problem, with the value coming in lower than expected”….”Bankwest said they couldn’t accept it as security”
So why can’t Bankwest do just that and not accept it as security and only use the current IP as security??
I had told my mortgage broker that we don’t mind paying LMI….. soI am totally confused. I think I will need him to clarify the situation to me again, as I’m sure there are more options than just going with another bank.
Failing that, I may have to give you a call Steve.
pasandbec
hi hellman,
on the contrary…we are using a mortgage broker and the gentleman handling the deal for us is apparantly very good. he gave us only one other option, to refinance the deal with another bank using a 10% deposit plus stamp duty, etc.
what i don’t understand is we have $100,000 in equity. why isn’t this enough to borrow 100% plus costs and reno costs for the new place????
I should have also mentioned that we want to borrow 100% plus costs plus extra $$ to do renovations on our PPOR and the (new) IP…..
Partner earns $55,000 pa, I earn $34,000
No credit cards or major debt (apart from the properties)
KS,
I cracked up when I read your post! Especially the taxidermist part and the action of ‘squirting’ the boss like he’s a weed, as you walk out the door! hahaha.
Thanks, you put a smile on my otherwise depressed/stressed dial.
pasandbec
And you want to get a 2nd job. Tut tut tut
*shakes her head*LOL. I know. And stress myself out to the max, right? hehe.
He is just an arsehole, unfortunately.
He gets very ‘high n mighty’ and gets his back up whenever he even remotely starts to look wrong.
This is one example for you, today he took something from my cabinet/drawer without asking or telling me. When I went looking for it I found out off the boss that he took it, so I approached him and said “I’d like it if you could let me know in advance if you need anything from my drawer, instead of taking it when I’m not there and not even telling me” and he gave me some aggressive speil about how he comes from a government background, studied government law blah blah blah and as far as he’s concerned the cabinet/drawer belongs to the business and he can take anything he wants from it anytime, without asking or telling me and I said I understand that the drawer belongs to the company but it would just be courteous if he could ask (or at least let me know) when he’d taken something from there.
I might write a letter tomorrow and forward it to the Big Boss (above my Manager) and also explain why I’m sending it to him. It will garanteed coz <edited>, and I’ve had enough <edited> from that place for one life-time, so I might just leave it. I don’t think there are many people quite like this guy…..so the chances of working with another one is fairly slim (I hope).
cheers,
pasandbecI guess because I’ve never been in this situation before, so am unsure what to do and scared of the repurcussions (being sacked or something). I am not part of a union, I don’t think the Manager would do anything about it (even with a formal complaint), plus I just want out of that job now anyway and am looking for employment elsewhere.
hmackay,
what an encouraging post! thanks for your support. still not sure about the 2nd job/tax issue. am trying to think of other possible sources of income but it is difficult.
congrats on your success, i wish you all the best.
pasandbec
