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I have to say and i hate myself for saying it but I totally as I often do agree with Robert.
A classic example is a current commercial deal I have been working for a few weeks with some clients whose Bank told them they do not do business loans secured against residential property.
The security was leasehold and after much painstaking i secured them a approval secured on both the residential home and the balance secured against the business. In fact the lender was short of security and was prepared to take the shortfall due to the cash flow.
Today i am told that they asked their current regional lender for a payout last week and when approached with the fact they they would loose the deal their existing Bank have now gone to 90% refinance on the basis of a few projections. As they couldnt do the deal legit they set the clients up with a line of credit and told them to use the funds for whatever purpose they desired.
I think a LOC for a business loan is a really inteligent idea of doing a deal – NOT.
What Robert is getting at is that a Broker hates to perform his duties and then and the end of the day loose out to the existing Bank who would rather than go back on their initial word than see the business go elsewhere.
Thankfully many of my clients attitude is now that they would rather let me refinance their application than stick with their current lender. The same lender who couldn’t give a toss about them when they were a client but the minute they think they might be an ex-client are all over them like a rash.
Where are all the retention department bank jonnies on the forum when you need them for a bagging.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
One other consideration is the likely interest rate on the development funds.
With most of our developments (and we do have a good relationship with our Banker and are experienced in doing what we do) we still pay a higher rate than could be obtained on a residential housing loan.
Your Bank are likely to charge you a higher rate so once the devleopment is complete renogotiate the interest rate and if you are not happy with what is being offered consult a mortgage broker and get them to source out a moer suitable deal.
I assure you it is a big market out there and an independant broker can save you 000’s.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Starglow
Also remember a fool and his money are easily parted.
By this i mean dont be in a hurry to burn a hole in your pocket. If you are happy to pay LMI then you could easily borrow 95% agaisnt the IP purchase price meaning you have more of your money to move onto the next deal.
If you wrap the property (Please don’t exceed 80% as MI get a little toey)then yes you will get a higher cash flow but may loose out on some capital growth over the years.
Forget the negative publicity of wrapping it is likely anything if you are ethical in your dealings and disclosure everything then you will have no problems.
Why not consider a combination of both or consider venturing out to the US or Property Trusts as well.
With $200,000 you can certainly have your cake and eat it at the same time.
Feel free to email me should you need further ideas.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Flying Kiwi
Might want to consider getting in touch with some like Roy at Guardian Property his is a member on the forum here or Apostle who again can be found lurking here.
Both specialise in the Perth / WA area.
If you cant find them i can email you there contact details.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Kendo i am warning you dont fire up the chick magnet.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Kendo i am warning you dont fire up the chick magnet.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Havent we been over this over and over again.
Stacking, jacking, rebating, uping are all flash names for something which is out and out fraud.
Munjy last time i check you could negotiate Real Estate commission but CGT you couldn’t. Inless of course you and Michael Carmody are on drinking terms
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Rick
We do a lot of finance in the US and have done so for over 20 years both from here and back in my days in the UK.
Happy to answer any questions you may have on the US market.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
In most cases you do not require an Australian Bank reference for obtaining US finance.
Some lenders require 3 credit references other have no such requirements.
Similarly some require a copy of your Baycorp credit references other will ignore this.
Financing deals in the US is not easy unless of course you buy in Florida so you need to deal with someone who has experience in the US finance market.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Hi voigtstr
Can you tell us the approximiate price range of the property you would be looking for?
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
If Westan is not going to promote his services i will.
The world is a big place and opportunity lies within it. The US has some exceptional returns both in the way of Capital Growth opportunities and positive cash flow.
Why not ask Westan to pop you on his mailing list and see what he and Alvin can find for you to look at.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Hi Pabbs
Sounds to me you need a combination of both capital growth through direct property investment as well as some positive cash flow to counter balance the negative gearing.
Roy and his team at GPS network have a good range of property which could be the way to start with. If you are looking at holding long term and prepared to accept short term fluctuations in the market I think now is as good as any time to buy.
Dependant on equity and borrowing capacity why not consider a combination of both as I mention. A wrap, Lease Option or second mortgage lending will give you a higher cash flow and you could use this to offset any effective cash shortfall.
With a well chosen property the amount of shortfall would be reduced after the Depreciation and Write Off benefits have been factored into the equasion.
You may be better off starting by getting your borrowing capacity and finance choices set up first so you are aware of your options. Happy to crunch some numbers if you feel we can be of assistance.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
HI MC
Feel free to email me with questions if i can assist.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Rick
Not sure at what exactly you are referring to but I arrange finance for Australian and NZ resident wishing to purchase IP in the US.
If i can be of assistance please feel free to email me.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
184 held in Qld all wrapped or with some form of Vendor Finance.
Like Robert i believe it is time to take a break from direct property investment and believe you can direct your capital to higher earning yields elsewhere.
Oh by the way 2 still in the SE of England and 4 properties in California which i have had for 20 years.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Richard is the better looking one of the 2 of us.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Maruco
In Qld you should try a License to Occupy rather than a Lease Option.
Some deaf changes would get around some of the issues you raised.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Dependant on which State you are in, one way around this in future deals would be to utilise an Call Option rather than go straight to Contract on the property.
Certain States are introducing Stamp Duty on Option Contract so check it out first.
Cheers Richard
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http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Robert is right. A lodoc loan means that the the lender normally does not require full verification of your income it does not give you broker cart blanche to make up a figure.
If on paper you are showing $17,000 i presume this is becasue your net taxable income is $17,000.
A lodoc loan may not be the way to go but a NO DOC loan may well be.
Without knowing the rest of the details of the loans it is difficult to provide an accurate summary and make constructive suggestions.
Cheers Richard
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http://www.yourstatefinance.comDevelopment funding and US property finance
Our specialityRichard Taylor | Australia's leading private lender
Hi Simon
Good on you to consider an investment away from you immediate confort area.
Coming originally from the UK you can certainly get a better rate of return that here in OZ but remember there are a large parts of the Country where you just wouldn’t buy. In the UK with the new FS rules you would not get more than 80% on a Buy To Let mortgage. Many companies advertise 90/95% but the fact of being a non resident will hinder this. Lending will be from a UK lender.
In the US it is much the same although the lending criteria is treated totally differently.
80% maximum or 100% with a CD as additional security is the limit.Certainly interest rates in both Countries and the competition in the lending market make the number of lending options vast.
One consideration is the currency fluctuations if you need to top up your account.
Would strongly suggest that you team up with someone like Westan or Mic from Aussie House Hunters and have a look at the properties they are offering in the US.
In the Uk feel free to bounce areas off me. Just avoid towns like Burnley, Oldham, Hartlepool.
Cheers Richard
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http://www.yourstatefinance.comDevelopment funding and US property finance
Our specialityRichard Taylor | Australia's leading private lender
