Forum Replies Created
Sooshie, where I came from in my reply is that on another forum I mentioned a situation where an elderly man (76) was in quite a spot of bother i.e. he was under mortgae pressure and HAD to sell but didn’t really want to.
So I suggested that someone may possibly be interested in a deal whereby they paid out the mortgage and finished up settling the purchase on the vendor’s demise at a heavily discounted purchase price.
I ran into flack and accusations as the poster jumped to the (wrong) conclusion that I stood to make money out of the deal.
The facts are that I was merely trying to help both parties and didn’t stood to make any profit out of the deal.
However, even if one were (getting some financial benefit) so what ?
The only legitimate possible objection one could raise to such type of posts is the fact that the owner of the site may consider it unpaid advertising and may object to that.
I don’t know but to me it seems that running such types of posts would increase the visitor rate to the site and thus would be a win/win situation for everyone.
As far as a possible bumb deal is concerned, ‘Caveat Emptor.
If one doesn’t know what one is doing one shouldn’t be doing it.
One should ALWAYS do one’s homework no matter what the source is of the property.
Pisces133
>>but it beats worrying about possibly two mortgages. It also depends on your actual situation and your comfort zones.<<
The other side of the coin is that following that course of action (i.e. avoiding the situation of being stuck with two mortgages at the same time) means that prices may run away from you during the time it takes to find another suitable place.
And in a strong runaway market that may well mean that one cannot get back into the market.
(I actually know some people whom this happened to.)Damned if you follow the first suggestion and damned if you follow the second suggestion.
Bridging finance (where you do not pay interest for a limited time as it is capitalised) appears to be the solution to the dilemma though even that doesn’t give you 100% protection (in the situation for example where the buyers suddenly disappear and you finish up with two mortgages after all).
Pisces133
A solicitor would have to be a complete idit to be involved in something which is obviously a case of fraud.
The conveyancing fee he stands to gain isn’t worth the risk of losing his ticket to practice so don’t even bother to involve the solicitor in the plot.
Pisces133
Rentmaster, I was taking a bit of poetic license using 48.5%. Although it is the top rate in Aus, you have to earn over $62,500 pa to cop it. The introduction of GST resulted in the lifting of this top bracket from 50k (to compensate for the gst), but in reality, GST was just another blow to negative gearers. I estimated it cost me $2700 pa out of my pocket.
I realise your 10 year example was a quick demo, but of course the longer your loan the closer the P&I repayments approach the I/O payments. (This is more for Benny’s benefit than you RM!) ie don’t expect to pay double for a P&I.I’ve also cheated on the maths a bit with the tax effect on the P&I. If I did it properly I would have to bring back the tax refund from each interest payment to present worth. This is not a uniform series of course, because your interest paid reduces during the course of the repayments.
I’ll work on it though!ps If anyone wants to know the maths formulas involved then I’ll write them all out.
J.In my case, the banks SAW the contract and annexure and still valued it on $55K, in my opinion is valued correctly. As it was a bargain, the owner had defaulted on payments and the house was being sold under her. I expect to get at least $68K after painting and relaying carpet.
It is +ve geared and renting at $120/wk in a country town near Perth. Even with borrowing 110% of purchase price, it’s +ve. I asked if the owner would take back 10% on terms or be interested in vendor finance for a year, but she needed the cash ASAP.Why would banks lend via a broker ?
I guess it is because business introduced by a broker is cheaper than having loan applications processed by their own staff.
If one bank refused broker introduced business they would miss out on that business with another bank only too glad to receive it.
Pisces133
>>If you are going to benefit from the deal in any way, (i.e. commission etc) don’t bother posting it as it will be deleted.<<
Sooshie, what is so detestable about someone possibly earning some money from introducing a deal ?
It sounds like hearing some religious twisted mind freaks speak who say ‘money is evil’.
I cannot see anything wrong in someone introducing me to a deal AND at the same time making some money out of it.
This site IS also meant to be a networking site isn’t that so or have I got that wrong ?
I know that in order to find a deal I need to expend a great deal of money and time so I would just love to find someone who would cut out all that hard work for me and so what if that person were to make some gain out of it.
Taking it one step further, are you suggesting that, for example, we should refuse to buy a property via a real estate agent because ‘he makes commission out of the deal’ ?
Pisces133
Dan your suggestion won’t work.
In the first place if you want to old man to issue a new contract to your buyer he will, more likely than not, think you are ripping him off (despite being promised half of the stampduty).
Secondly, what is the purpose of adding the words ‘Or nominee’ ? After all, you are implying the suggestion to ask the vendor to issue a new contract.
Thirdly, if you want to onsell to your endbuyer using the contract with the words ‘Or nominee’ it WILL attract a second lot of stampduty.
A better way would be to sell your own unit (and not pay tax on it) and thence move into the new unit yourself.
When the time conmes to sell that it too won’t attract any tax.
Pisces133
>>My situation ATM would only allow me to abtain
5-6 IP’s using the equtiy in my homeso whats the best way to overcome this Apparent Brick wall.<<
Native_Metal, what are you saying ? A brick wall ? I would venture to say that many people here would love to be in your position.
Pisces133
>>This sounds like they are being misled on the purchase price.<<
No it doesn’t SOUND like misleading the bank. It IS misleading the bank.
A much more preferable way would be to put some cash in, do the alterations and thence have the property revalued again and recover one’s cash input.
Some lenders are however prepared to re-assess the property the moment it is registered in your name.
Then again, this kind of thing (putting a false purchase price in the contract) is being done each and every day, a lot more than everyone thinks.
And, in a way, the lender has a valuer value the property as their protection and assurance.
I would have a lot more sympathy for the lenders if valuers were always putting a fair dinkum
valuation figure on a property when they value it rather than protecting their backside by automatically adopting the contract price (or else being ultra conservative).I doubt that a bank would do anything more than withdraw the offer to lend if they were to find out (what actually amounts to fraud).
Pisces133
Whatever decision one makes at anyone time is the one we saw at the time as the best one to make.
And yes, sometimes things don’t quite work out as planned.
The funny thing however is that so often when something happens which, at the time, we only could see as a disaster, in the end, the ‘bad happening’ turns out to be a blessing in disguise (leading on to other and bigger and better opportunities).
How does that saying go again ? ‘Trust in the Lord with all thine heart and lean not unto thine own understanding’.
Whether you are religious or not, it isn’t a bad piece of advice to follow.
Pisces133
Andrew you can get an info sheet at http://www.osr.qld.gov.au/taxes/land/index.htm
The new threshold in Qld is $220,000 before you start paying land tax. It is the official valuation of your share of all land you own or partly own, except your Principal Place of Residence (PPoR). It’s a yearly tax.To work as a finance broker you really need to belong to a group. The mainstream lenders require that as an individual you supply say $1M to $2M per month in business which many brokers don’t do anyway.
The advantage of belonging to a group is that the group has already established ties with the banks and collectively they normally have no difficulty in producing sufficient business to keep the accreditation with the mainstream lenders.
In return for that (and other advantages) management will take a percentage of the brokerage you earn.
However joining a group is something else. They will most likely insist that you either have already had some experience or that you have passed a course like Certificate III in Mortgage Lending (which is a 13 week parttime course at Tafe).
Once you have joined a group you need to attend seminars which each bank runs from time to time
before you can obtain your individual accreditation with the different banks.Perhaps it is worthwhile to establish a relationship with a group right now whereby you may be able to attend the banks’ seminars whilst you are still in the middle of doing your course at Tafe so that you don’t lose any time once you have completed your course.
There are also some exams you can immediately sit for, run by the MIAA (Mortgage Industry Association of Australia) and these exams (which don’t take more than a couple of days to study and finish) will give you some exemptions for the Tafe course (as well as a discount on the Tafe price).
Before starting to write business you will also be required to take out Professional Indemnity insurance.
Note that many groups have a special arrangement whereby the cost will be less than half of what you would be paying as an individual.
Pisces133
Rentmaster, Rowan has pointed out the two main follies with a nominal dollar for dollar comparison that you have made. I also keep harping on about time value of money, so I’ve put some numbers to it as follows:
First assume the loans you compared are not tax deductible, eg for PPoR.
Assuming 3.5% inflation, let’s bring back all the payments to present worth, ie at the start of each loan.
Present Worth of your interest only payments is $117,913 and the final payment of 200k in 10 years time has a PW of $141,009, so total PW of payments plus final payment = $258,922
Compare this to the 120 payments of $2233 for your P&I loan which have a PW of $234,816. The difference in today’s dollars is $24,106, not $62,000 as implied in the comparison.Let’s add tax effect at 48.5% and see what happens:
Your interest only payments are now only costing you $600.49 per period after tax, which has a present worth of $60,726, which added to the PW of the 200k payment ($141,009) gives a total PW of $201,735. !! (varies with assumption of inflation of course)
The P&I is a bit trickier, but lets assume that you pay your tax benefit straight off the principal. If you do this, then the loan will be paid off in 100 periods, so the PW at 3.5% inflation will then be $201,150, ie not much different!
Obviously interest rates and inflation will kick the numbers around a bit, but basically your loan isn’t costing you anything in todays dollars at the figures I assumed!
Now there’s a challenge to you accountant ones, ie shoot holes in my maths!
JI have worked as a developer for many years and would always happily give a listing to an agent.
Firstly the agent knows the market (or should do so).
Secondly, how would a householder know what the value is (unless one puts in a lot of time looking at houses.
Thirdly etc., if time is of the essence the agent has already a lot of people on his books looking for property, he knows how to promote the property properly, he is a very necessary buffer (and negotiator) between yourself and any prospective buyer (that alone is worth the money).
I presume that anyone who thinks he can do the task himself is also baking his own bread, repairing his own shoes, servicing his car himself etc etc.
Yes there are some bad eggs and it is up to you to get a number of opinions from several agents.
The one who says he can sell the property for a lot higher price than most of the other agents is most likely a b/s artist and a liar.
Go with the one your gut feeling tells you is the right one.
Do not however lock yourself in for a long time, always insist on a (written) assurance that the property will be continuously advertised and that there will be a regular open house and (try to) negotiate the commission rate.
There is a lot of competition out there – then again, the lowest commission rate is not necessarily the best agent either.
If you want to have more assurance spend a couple of hundred dollars on a valuation.
Pisces133
The number of townhouses one can put onto a block of land depends on several factors such as
total land area, density allowed, area of landscaping required per dwelling, land required for the driveway and turning circle, setbacks required etc.To get a better idea, get hold of the council’s Medium Density Code and thence go through it section by section.
You may get a big surprise in that a council’s requirements may make it difficult or impossible to build the number of dwellings one initially thinks one can build based on the density alone.
That is, the density may indicate say five townhouses but then, once one starts to look at the other requirements, especially the driveway and turning circle and private garden area required for each dwelling , one may discover that what initially appears possible in theory isn’t necessarily possible in the real world.
One cannot even necessarily use an existing development with identical land area to get an idea as that may have been built under different council rules.
In any event, one cannot draw up one’s own plans
so get acquainted with either an architect or a
house designer who is familiar with the particular council area you are looking at.The architect has probably already designed plans for a similar sized block of land and will thus be likely able to tell you what you can expect (to build).
Do remember to ask first what he/she is looking at moneywise to draw up a D.A. plan.
It is a very specialised area of real estate and
one will be unlikely to be able to do a development without putting up say 20% (or more) money up as equity.There are however other ways and means of
approaching it without putting so much money in.BTW, if there is someone around who lives in Sydney, and who has the interest and plenty of time to get actively involved in looking for development sites and who is interested in learning all about development sites we may be able to work together to our mutual benefit.
Pisces133
[email protected]I usually have a look at your tip Sooshie, but I’ve never noticed the <more> link ’til you mentioned it. Funny how your eyes work.
JHey I can’t even push my calculator buttons properly. Congrats on the 100, but that just means you’re spending too much time here and not doing your real job, like me! dang addictive forum! We’ll have to start another forum for forum addicts! (already done on irc of course).
Hi Rebecca
i live in Newcastle aswell, if you like
we could talk, both on and off this forum.?
good investing
nigelRod, your loan was 207k, not 230k, so you get 23k back in your bank account when you repay the loan.
J
