Hi Elka

I think each lender will vary but i wouldnt expect you to get more than circa 60% as the loans are non recourse.
If the deal is self supporting i think you would be ok but you certainly will not get MI.

Hi Ben

Sorry to hear your story about Powerloans i guess as an indepedant broker we hear these stories all day long.

Think the moral of te story is if it sounds to good to be true then it probably is.

I agree with Terry make sure that you do not fall foul of the Managed Investment Act as the pealties are quiet severe.

A prospectus can be expensive to produce but like anything the costs are relative to the return.  

Hi Elka

The legislation passed through the Senate in October so most Accountants and Financial Advisers / mortgage brokers should be aware of this by now.

Obtaining a loan is the hard part as most lenders havent caught up with the market news ans are trying to figure out how they will lend with no recourse. NAB are doing mine but i do have a good relationship with their HQ.

Duckster is correct a person entering into a contract to buy land cannot do so under the age of 18.

Hi Dannards

Sorry for the lateness of my reply being in the UK on holiday makes it hard to keep up with posts as regularly as i would like to.

Simon has given a good reply but if you want any further information fel free to drop me an email and i can answer you in greater in depth when i am back in Brisbank in a fortnight.  

Legislation was passed in late Oct 2007 (It has already received Senate approval) to allow SMSF to borrow in their own right so why go to the expense of setting up a Unit Trust why not just borrow in the SMSF name solely.

This peace of legislation will certainly fuel the fire on the property market with Trustees now able to borrow to gear into oth residential and commercial property.

Before i left for a month in the UK (where i am until Dec 1) i have placed an offer on a Commercial property in Brissie borrowing in my SMSF. I can claim all the negative gearing deductions, depreciation etc i could in my own name but have the benefit of the reduced Tax rate on profit. 

Hi JB

No it is not a stupid question at all and one develpers and investors ask regularly.
I guess you Bank is going to argue that there is no money in them lending to you over the short term (les than say 36 months) and therefore they are going to want to charge the relevant early repayment fees etc.

A couple of altenatives would be:

1) Take out a development loan with no early repayment fees but accept you will get charged a higher interest rate be limited to a lower LVR and application costs.
2) Use your existing equity to establish a line of credit and purchase and undertake the renovation from the LOC. You will only pay for interest once the loan is drawn down.

Regretfully your broker isnt going to want to help you with open arms as hs comission will be clawed back in full with most lenders if you pay out the loan within the first 12 months. I for one have many clients who i charge a fee for doing ther residential develpment loans whereby we place the application with lenders with low or no eary payment fees on the basis my commission is al lost when they pay the loan back.     

Discharging a loan is done every day of the week in every state the only varying expense will be the mortage discharge / transfer fee for Victoria. This is a cost incurred by your lender from the State Govt and passed onto you the borrower.

Each individual lender will have its own early repayment penalty or early discharge fee.

Hence i am not intending to sell any of my properies on the peninsular.