sasha

Yes hate to say you do need to service the new loan.

Started purchasing here in Brisbane circa 1994/95 and took about  5-7 years for some and around10-12 years for other  to get them all +cash flow although i did start with a decent deposit coming from the UK when the pound was strong.

Yes I could live very very well off the rent as i have a very low lvr.

Sasha

No problem at all it is difficult to get to grasp with but once you do it will seem obvious.

The security is neither here nor there it is the total loan that you need to consider.

If you borrow $200K for investment and the security offered is a motor bike then the interest would still be deductible due to the purpose of the loan. Whilst you would have no borrowing on the new property and if fact would have $200K + equity you would still have a loan of $200K elsewhere.

Remember the property will be new and you will be able to claim both Capital Allowance and Depreciation both of which are non cash deduction at your marginal tax rate.

Secondly you are getting the land for free so have inbuilt equity from day 1.

Also 200K sounds very expensive for a freestanding Townhouse.

Hi Romeop

If you would rather drop me an email i can respond to you off the forum and means you dont need to disclose too much personal information for all to see.

Yes interest capitalisation is available subject to the overall lvr.

Your mortgage broker should be able to offer you all of the available options.

Ash i would be taking an interest only loan with 100% and save the extra funds in the offset account for the next deposit.

Hi Romeop

Firstly welcome to the forum and I hope youenjoy your time with us.

Both Aussie and Rams are franchises so the advice you will get will depend on the knowledge and experience of the franchisee. You could well find the individual was a second hand care sales on Monday and a Broker on Friday with a weeks corporate training.

Forget asking them if they are members of MFAA as both franchises are members and churn their staff through like shelling peas.

i would ask them how many years have they been in the industry, how many investment properties they own and what are their professional qualifications etc.

Dont be suprised to be disappointed.

On a separate note if you are PAYG even though you are employed on a casual basis you wont be able to apply for a lodoc loan especially at that level of borrowing as this is the domain of the self employed.

Yes you might get 65% of net GST GR so if this was the case loan around $1.1M.

Still going to be a few $$$ short.

Banks dont lend on GR so would be the domain of the private financier.

Hi Dave

Yes what i am saying is that without other security no private lender is likely to lend you 100% of the purchase price / valuation unless of course they are the vendor and it is done by way of an instalment contract.

Sasha

Firstly if you work on around $1200 / square metre for a simple townhouse you wont be a million miles away.

I understand what you are saying about your equity but it doesnt work that way.

Assume it costs $200K to build you will still need to borrow and show serviceability of $200K irrespective of the equity derived from building the new dwelling.

Depending on the numbers you might find things are a wee bit tight.

Hi quickchick

Why would the deal not work at an 80% lend?

As long as you have serviceability to cover the new loan and the funds can be seen in your account then most lenders would approve.

The original post was in regards to private investor which are actively out there and we have done many many a deal however it all boils down to risk and lvr. You are very unlikely to find a private investor go to 100% of the purchase price without any form of additional security irrespective of the interest rate charged.

At 70% or thereabouts funds are readily available by first second or even third mortgage course the rate isnt cheaper as you go down the pecking order.

Hence my comment about using Vendor finance which is done as a 2nd mortgage.
Your lender will want the first charge on the property.