Itsamoorey, one of the most important factors for success is to be persistent.

Make it a numbers game (which it is). Keep making offers, keep looking at properties, keep on going.

Pisces

The point is that nobody really knows what will happen to the market so is it surprising that at the moment the lenders are a bit more careful than they would be in an actively boiling market ?

Remember, there is always more than one side to a story. Your superannuation fund may well have part of your super tied up in this lender’s shares.

So we really ought to have some understanding if a lender is trying to play defense, defense, defense as they may be managing YOUR money.

BTW, from where I am (as a mortgage broker) there are several lenders out there (banks) who in my opinion are lending recklessly (and who, in my opinion, eventually are likely to get themselves into strife because of that).

Pisces

Hi Scott,

Just had another look at your personal information.

You do indeed live outside Australia. Yet, you are selling houses in Victoria.

How do you manage that from so afar ?

Pisces

Yeh, it may be a good idea but keep in mind that, firstly you aren’t a builder so you need to get someone else do that part of the job (and there goes part of the profits your next door neighbour would make.

Secondly there are certain skills required and if one doesn’t have that knowledge one can come undone.

Yes, I know that you can consult an architect but
if he has to look at every possible project you will soon go broke paying his fees.

Thirdly, finding the right property at the right kind of price is a fulltime job.
That is the reason that many builders go through estate agents.

If a builder is tied down on a building site he just hasn’t got the time to run around looking at many sites.

Fourthly, not everything is love and roses. You can bet your bottomdollar that your neighbour had had his share of losses as well.

Fifthly it is capital intensive. I note that you say that you don’t have much equity at the moment.

If one obtains finance one still needs a deposit and one also needs to pay the interest each month (unless one provides more security than just 20% of the project’s cost).

The answer to your first question (“if this can be done, how is it that you get started?”)is that one needs a certain amount of assets.

Another answer is that to learn it is best to learn from someone who knows so you profit by learning from someone else’ experience rather than by having to learn by paying for your mistakes.

Who better to ask your father in law’s neighbour ?

Tell him you would live to learn to do what he is doing does he mind if you hang around a bit and make a bit of a nuisance of yourself by asking questions.

I would reply to your other question (“Is there a savvy way of gaining finance to fund this kind of project?”) by saying no.

Nevertheless, is it possible that you could raise some money by selling your present investment property ?

If you are interested in building it is possible to do a building course at TAFE of course.

Pisces

I still haven’t really a clue what Marlin is talking about.

“Agent”. What kind of agent ? Real estate agent ?

Is it buying shares in a company which owns a property and those shares entitling one to occupation of a particular unit (generally described as buying a Company Title unit) vs making an investment in real estate by buying a property ?

Or is it something else ?

If you are referring to a company title unit then I have the following remarks to make :

Generally such units are older style units which mostly are considerably larger than the units being built today.

(Forgetting the size of the company title unit for the moment) they sell at a discount compared with strata title units.

Some (not all) such units may have restrictions placed on them in that one cannot put a tenant in the property.

Generally, in any event one needs permission from the Body Corporate to let to a particular person (permission cannotunreasonably be withheld I would say)

In the past it was extremely difficult to borrow on them. Nowadays banks do accept them as security.

It is no great deal to convert them to strata title units (at a cost of course).

Pisces

Most brokers would have been very aware of what the trend is likely to be the moment they saw several lenders trying to push fixed rates at a rate which clearly indicated that those lenders didn’t think rates would dramatically run away.

Pisces