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Assuming you are single and have no dependants or any other liabilities other than the PPOR then at least $500K should be quiet easily achieveable for an IP
It will vary considerably from lender to lender but i have taken a nice straight forward conservative approach.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.39%**
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
WA
To give you an estimation of your borrowing capacity can you tell us a little more:
1) Existing property = PPOR / IP
2) If IP rent = ?
3) Income 75-85K How such a broad range. Surely it is either 75K or $85K Tax is Tax.
4) What gross rental yield are you expecting ?
5) Would you be redrawing some funds from your existing property to offer as a deposit or are you seeking 100% standalone IP deal.Richard Taylor
Residential & Commercial Finance Broker **Lodoc Commercial Loans from 7.39%**
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Both
I now of one major Bank that will waive LMI if they want the deal and also as Alistair mentions a smaller lender who again will do 90% without the need.
Richard Taylor
Residential & Commercial Finance Broker **Lodoc Commercial Loans from 7.39%**
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Grant has already been advised by CBA that they will do this substituation of security although the new security is in different names.
Must admit it is a new one on me but what do i now.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Thanks Xenia must admit i do try and type with a smile on my face.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Hi Jennifer
Must admit i have done one or 2 over the years.
I assume from your post you are actaully purchasing a property with the Title transferring Title to you the purchaser and then repaying a percentage of the purchase price to the Vendor down the track.
I must admit i am suprised that any Vendor would allow capitalisation of interest for a 60 month period but assuming that they do if i was the Vendor i would want to register my interest by way of Registered Second Mortgage.
In all of the deals i have done this is the way that we have goine about it. if you are referring to an Installment Contract then the interest would be noted by way of a caveat under the Property Act.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
I think you also need to stop and think about the figures yourself.
Many of the mortgage minimiser type loans where sold by brokers wanting to sell Lines of Credit type business and as has been said can work but you need to operate a really struct budget and not spend outside this.
Your loan repayments for a traditional style loan are made up of principal and interest components the mix of which vary dependant on the loan balance. To repay a loan quickly there are a couple of ways to do so:
1) Increase the amount of frequency of your repayment.
2) Use a broker to shop around and establish a more competitve rate and product that suits your needs and requirements both now and into the future.
3) Utilise offset accounts offered or Professional Packages to save in both interest and fees.A final word of warning is remember a lender will not tell you whether one of the competition has a better product that suits your needs better. A independant broker can review your situation and make a suggestion from a myriad of lenders and products.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
S on a B
I doubt you will get anyone to offer unsecured finance on a development deal so it would need to be secured.
On the basis you can show serviceability you are better of to try and find a private short term investor to look at the application.
One thing is you are certainly going to pay for it in the way of both interest rate and fees and they will want to register a caveat against the property.
High LVR so they will probably want to direct the funds.
Good luck
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Is it secured funds you are seeking and how much. ?
What is the current value of the security being offered ?
Do you have an exit plan to refinance in 3 months time?
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
T & T
Before i offer an answer:
1) Which State is the property in?
2) How much did he pay for the original property and in what year?Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Darryl
Currently our deals in the US are being done at around 6.17% (closed last deal on the 2nd February 2006) for Foreign Nationals.
What varies is the State you are referring to and whether the loan is less than $50USD
Happy to cast my eye over your position for you.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Ned
Usually when you calculate serviceability it is easier to work from Gross monthly income and then calculate the actual tax payable.
This avoids any distortion when it comes to items such as salary sacrificing, spouse super contributions etc etc.
Rent is then applied depending on the percentage the lender allows (rule of thumb is 70-80%) and an adjustment for the negative gearing element. This can be calculated using a negative gearing calculator although it is not rocket science.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
I agree again with Terry.
How many applications St George or Westpac take where you have an unpaid default for $501 for non payment of your telephone a/c?
If anything i think the quality of applications is getting better for wrapping.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
I have to say receiving a $10K deposit in wrapping is unusual but in most states you are entitles to receive the FHOG if the wrapper qualifies. The timing of the payment will differ from State to Satet.
Wrapping itself is a business and takes time like any new business to develop. Each deal you do you will become more confident and find ways to build your business.
It took us 9 years to purchase and wrap 187 properties and each deal i believe we learnt something new. Our Bankers were slightly reticent to start with and didn’t even understand the concept however as the business grew and the cash flow increased they could see the indebtedness reducing.
Asses each application on its merits and remember that is your money that it is at risk. Check references talk to employers (get a Privacy Act Authority signed in your favour) and ensure that all of your documentation is legally compliant.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Phil
Why would you want a money partner when you can borrow against the GR of the project from a traditional lender.
With interest rates at around 7-9% dependant on the rest of the deal this would have to be cheaper than private money with partners wanting a higher rate of return.
2/3 units is nothing in the way of development. What you would need to show a private money partner is similar to what you would have to show a lender so why not think about doing the deal yourself.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
As someone who has spent the last 10 years in Qld working in the Vendor Finance market i believe every investment carries a form of risk.
It is just about how you approach the managment of that risk and also the strategies you use to diversify your risk. Education is key and dealing with professional in their field is important especially when you are dealing in an overseas market.
All i can say is for my clients that have purchased a Mobile Home through Chad and his US associates they appear very happy with the returns they are receiving and the way in which the investment is managed.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Yes we have a lender that will lend in NY State with a minimum loan of $15,000 USD and will happily lend to FN’s and LLC’s.
Biggest problem we have found over the last 2 years is that many FN’s are paying over the odd’s for their WNY property and that is born in the Bank valuations.
As Chad mentioned do your DD in NY and get yourself an independant Appraisal from a valuer accepted by the big US lenders not some friendly valuer recommended by the Developer.
To date with all of Chad’s clients in Texas and other States we have had no problem with valuation.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Hi Coops
Welcome to the forum.
Negative equity is something many people have stated to experience over the last year or 2 whilst the property market has cooled however as long as the reasons you purchased the original property still exist do not panic and whatever you do do not sell for selling sake.
I am assuming that the property is rented and in a good position and if new or relatively new then you are enjoying the benefits of Building Write off and Depreciation.
The market depending on which State you are looking at has some good bargains appearing and opportunities exist to purchase at better than fair value.
The principles of purchasing any property still exist in the present market as they did when the market was on the up.
Ensure that you keep any property separate from you other portfolio and do not allow your Bank or lender to cross collaralise your loans. If your existing lender wishes to re-value your existing property is probably a good idea to seek a new lender for the next IP purchase.
Remember property investing is a long term investment and the market will move up and down over that timeframe.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Hi Karen
The Buy To Let style mortgage in the UK has been around for around 20 years and was certainly popular in the 80’s.
However in saying that the lodoc and no doc market is the UK is more mature than Australia and up until 1991 CSBC used to offer a 75% LVR with a valuation only and no other references at standard housing rates.
Many clients of mine at the time filled their boots with this product.
As Simon has mentioned Australia is still in the early days of development in product range although a standard 70% nodoc is ready available with several lenders.
Richard Taylor
Residential & Commercial Finance Broker
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Sam
I guess one consideration is any possible CGT you might end up paying on the sale of the property.
If you make $50K clear and end up paying tax of say $25K then the exercise would not seem worth it.
Have considered alternatives like selling the property to a spouse or Trust and using the balance of the sale proceeds to reduce your debt on your PPOR. Again may have stamp duty and CGT implications but worth considering.
Richard Taylor
Residential & Commercial Finance Broker
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
