Sorry my friend i think it is you who are confused.

EFM is the branded trademark Shared Equity Scheme that Adelaide Bank launched through a panel of mortgage managers in Feb of this year.

It is exactly as i stated with the amount of upto 20% funded by Rismark Internation who have patented the product.

The Bank does not contribute an amount of 20% to the purchase price as Rismark do not hold a Banking License.

The 40% gain is payable in one of 3 events one being sale, refinance or at the end of 25 years.

Have no problem at all in you airing an opinion it is just nice to make sure the information provided is correct so that the other forum members do not get the wrong impression of a product.

Fair enough Anrobel probably not worth it on this one.

I dont think you will find much written on the subject as it is something your mortgage broker / financial adviser will advise on.
Not the sort of thing that is written down in book form.

Tess

The answer to this will depend on the conditions your lender has in its Mortgage Deed and the Letter of Offer.

Hi Thomas

This will depend on the local council authority and the age of the property.

The property will need to be surveyed and the application lodged to the local council who may approve it subject to conditions.
Depending on the Building Act in your area you may find that you are not required to update the property i.e in Brisbane if the property is post the 1972 Building Act then it is an "As is" approval meaning that you do not have to comply with things such as height of balconies or fire proofing etc.

Once approval has been given and any work undertaken the Plan of Subdivision will need to be sealed and the registration lodged into the Titles office. The Body Corporate (subject to number of units in the block) may need to be formed.

All in all in is not a particularly costly process per unit but can take a while.

I have done over 50 blocks in Brisbane and the simple answer is that the average vendor does not have the desire or ability to want to strata title the property.

Hi Morty

Don't want to burst the bubble on your idea but it doesnt work.

As a Director of the Company or Trustee of the Trust you are obliged to disclose any liabilities you guarantee and I am sure if you do a search you will find that this topic has been bought up a number of times.

If you wish to carry on purchasing properties and the Bank believe your serviceability is maxed out then why not consider a nodoc / lodoc 2nd mortgage. Admitedly the interest rates are a fair bit higher than mortgaged rate but often it is for only 10% of the purchase price and you can always make this principal & interest to reduce the debt.

I process a fair amount of this type of lending for clients.

I am with Hieung regards to Property Management.

My property manager was doing such a good job that i decided to buy the company and now own the Agency and the whole rent roll.

If anyone wants a recommendation for a good agent in the Brissie are let me know.

I agree with John on this one and a contractor arrangment maybe a lot easier than being licensed yourself.

There are other considerations depending on what State you are in but surely receiving a percentage of the commission from your broker for introducing the loan will avoid any potential  "conflict of interest" from your buyers and the complaince. 

Hi Wezwaz

Think you are slightly confused with your post.

I assume you are referring to Adelaide Bank's Shared Equity scheme in conjuction with Rismark.

It is very much a horses for courses product and i have done a fair few now.

In fact one of the forum members here was the first client over the line with the new product earlier this year so he maybe to comment on how he feels the product worked for them.

I agree with Bardon and selling the property into Trust is certainly worth exploring.

It is difficult to make coment without the actual numbers involved but could certainly give you a leg up when it coes to buying your own property.

I am not of any State where you do not have to pay Stamp Duty as it is considered to be a sale but do the exercise on aper is certainly worthwhile.

Hi Evad

Yes try and avoid cross collateralising the 2 loans.

Your existing lender will push for this but it is the time to go elsewhere.

As has been mentioned try and raise the deposit and acquisition costs against the valuer of your existing security and then use these funds for the first IP.

Whilst 100% finance is available for an IP purchase if you can reduce this to say 95% plus Lmi the range of lenders will be greater.