Forum Replies Created
Thought they would be.
No never heard of them or had any dealings with them.
Be interested to look at their website.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Never heard of them.
What do they do ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
John i have responded to your emails / posts on a number of ocassions in regards to the financing of such deals.
There is no lender / mortgage insurer in Australia that will knowingly lend to an investor who in turn intends to onsell the property by way of an installment contract.This also goes with Vendor assisted deposits which are not disclosed.
We do all of our Vendor Finance applications on a Commercial basis thru 2 of the big 4 lenders and this is done with the complete knowledge of the lender of what we are doing. The applications are processed thru the State Office credit department with full compliance and disclosure.
Doing the odd deal here and there will not get you anywhere you need to do it as full on business.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Like Terry never heard of any such ruling.
We work with a couple of specialised further of Asset protection lawyers and have done for their clients for nearly a decade.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Brokata
Firstly welcome to the forum and I hope you enjoy your time with us.
I think you strategy is bang on a certainly the way i build my portfolio of residential properties.
Drop me an email and I will send you a copy of the API interview i gave setting out my plan on building a portfolio to live off.As i say often your loan structure is so important as a poor loan structure with cross collateralised loans etc is the receipt for long term disaster.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Streaker
In essence you have it about right. I would suggest an equity loan if your current lender charge a higher interest rate on a line of credit. The purpose of the funds will be for investment and therefore deductible.
Then make sure you use a separate lender for your IP's.
The offset account should be linked to the non deductible portion of your PPOR loan.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Amit
Sure if you wanted to drop me a quick email with some basic figures i can come back to you with a short assessment.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Amit
I dont want to appear negative but your opening title concerns me a little "How to Excel in the Property Game".
I hate to say Property investment is not a game but a business and must be treated as such.
You need to have the same mental state and attitude as you would do if you were sitting an exam, learning a foreign language etc. You need to be focused, educated and learn from others along the way.
In regards to your comment regarding how you access equity this is a question i get asked often.
Obviously without having any hard data to hand it is difficult to provide much of summary but in essence you would want to establish an equity line or line of credit sitting behind your current PPOR loan and then utilise this for the deposit, acqusition costs and any ongoing expenses i.e subdivision costs etc.
As i say i am not sure of your income details or indeed you current value / loan or lender so i would need this to answer the question fully.
Just remember set up the foundations from day 1, structure the loans correctly and the rest will flow.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Tiggie
Firstly welcome to the forum and I hope you enjoy your time with us.
Look I don’t think financing this deal is going to be as hard as you think especially given the fact that you are renting out your current property. Subject to certain information it could be done as a bridging loan and all we would need to show is you can support the end loan.
As I say would need a little more information but not as doom and gloom as first thought.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Very few things in finance are advertised it is a matter of talking to credit and then putting the deal together with supporting documentation.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Brett
Regretfully you cannot just transfer the equity from 1 property to another.
What you could however do is:
1) Look to purchase your wife's share (or vice versa assuming her income allows for this) in the current PPOR and then claim a Tax deduction on the interest once the property becomes available for rent. She in turn uses the funds to invest in your new PPOR.
2) Both of you look to sell the property into a Unit Trust structure and borrow 100% of the value (or 80% to avoid LMI) and use the net funds to do likewise.
Course as has been stated previously there are considerations which would include Stamp Duty on the Transfer (this will depend on which one of the 2 strategies you look to adopt) which would need to be weighed up against the interest savings.
Then you need to factor in the annual land Tax which maybe greater by holding the property in a Trust structure.
All in all on the numbers you have mentioned i think it is certainly worth thinking on doing something.
Get your current Bank to do the numbers for you.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Noob
I would be happy to send you a copy of the API interview i did which will give you some insight into how i acquired all of my properties and at the time i started was not earning the same as yourself (albeit that was 16 years ago).
Your average Bank Financial Planner will have idea as they are paid a wage and told which products to promote.
They are not able to provide Credit advice or indeed is any Accountant, Lawyer or the like as that is the domain of a Licensed Mortgage Broker.You are so right that most are linked to property organisations that want to be able to sell you an over-priced property and will see you as easy meat.
Get your financial structure right first and then once this is in place you can look to source your own property (or even engage a Buyers Agent as long as it is someone acting on your behalf and not on behalf of a marketing organisation).
Really you set up for the future if you carefully set out your plans and goals and set an effective financial structure in place moving forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Totally agree but be careful contacting a lender to ask them as i have seen it happen to so often.
You make a quick enquiry on your serviceability and next thing they have undertaken a credit search.
<edit>Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Catts
Without knowing more information in regards to your Financial position, risk appetite etc it is impossible for any of us to make a suitable comment however I wouldnt suggest buying another IP merely because your tax deductions are falling.
Look to buy the IP or other asset class because you believe it will give you a decent cash flow with the possibility of long term capital growth and the Tax deductions come as icing on the cake.
I can understand why you would want to pay down the principal on your current loan but if you are concerned about your own employment position etc i would have thought that an interest only loan with 100% offset account would have been the preferred way forward. Any surplus funds could be used to cover personal expenses and provide a financial safety net whilst at the same time offsettting the interest charged.
On a separate note remember there are a few things you can do to offset some of the risk when buying an investment property
i.e Fixed rate of interest / Landlords insurance / Income protection etc etc.Whatever you do make sure you do it because you believe it is right for your circumstances and not because you are being sold something by someone else.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Streamline
The problem is that the variance between lenders is so vast these days and there are so many variable within each lender that anything meaningful by way of a excel spreadsheet is going to inaccurate.
As a rule of thumb if you take
1) Your net income and add
2) 80% of the gross rent on each investment property (include new IP to be purchased) and then subtract1) Your total monthly mortgage committments (including PPOR & IP loans)
2) Any other monthly repayment due under any personal loan, leases etc
3) 3% of your total credit card limit.
4) A living allowance based on the family number i.e single person say $1150 (couple say $1850 and then say $410 for each child)Divide the surplus figure by 7.35 and that will give you a very rough indication of the amount you can borrow.
As i say it is so inaccurate it is not funny especially where you have some negative gearing in there or similar.
Lenders vary in the way they interpret everything from rental income to living allowance.
Sorry not trying to be vague just it is not a matter of one formula fits all.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Streaker i promise you they will not tell you it cant be done just 101 reasons why you would want to not do it that way.
Then they will tell you if you cross collateralise the securities they can give you an extra 0.0001 discount and all will be sweet.
Just ask the lending manager you see how many IP's he owns as that will give you a clue of whether he has any idea?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As Jamie has mentioned i cant see an issue with the 265K but i am not sure i would be putting any of your own cash fund in to fund the cosmetic renovation rather keep these up your sleeve for a potential PPOR down the track.
Definately dont cross collateralise the 2 securities as your existing lender will love it.
Personally i think i would be looking to borrow to 80% of the existing security value to set yourself up correctly now ready for the next IP acqusition. Refinancing / restructuring will take a while to do it properly and you want to get yourself set up correctly both now and in the future.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
At the risk of getting this post suspended for recommending a fellow forum member i dont think you could go far wrong by touching base with Nigel and look at his education program.
That way you at least get knowledge from someone who has been there and done it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Going one stage further why wouldn't you look to buy a substantially positive geared investment in the Trust to counter balance the negative gearing on the PPOR.
Our postive geared properties we released to clients from the UK were such a great success i shall be back in Europe at the end of July working on some more deals for clients. Will release them on the forum once they are locked in.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
jnb no not quite as easier as all that.
I would have thought it would have been the other way round you Transfer the property to your husband's name, he then buys out your share and he increases the loan accordingly but there are potential CGT and Stamp Duty considerations to work thru.
I would get the Broker who arranged your Homeloans Ltd loan or the Anz Bank manager to work thru these with you.
This is what we do for our clients and no reason why they wont do so.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
