As both Robert and Simon have pointed out irrespective of what income you are receiving on Workers Compensation it will not be taken into consideration for lending purposes.
To me you can’t go past someone like Westan or Mic at AHH.
Think outside the square and listen to someone who has actually invested their own money in areas away from Australia rather than a typical licensed Australia Real Estate agent who merely is interested in a commission when he sells you something he has listed.
60% GFA if within 400 metres of train station subject to other issues of course.
You may wish to consider moving the old house and refurbishing it and utilising the balance of the land.
You might even get 3 x 3 bedroom and the house or 2×3 + 1×2. The house will have more value than a single land site and you might be able to use as holding income whilst you get your develop application through.
I have done several small developments in Wilston / Newmarket area and is it is great suburb for Townhouses.
Certainly the Trade Exchanges would never admit their is a secondary market and would condone such activity.
However i can tell you it is alive and well. Try and contact someone who consider is holding either a large amount of Trade Dollars and is keen to offload or alternatviely a very small amount of Trade Dollars too small to make it worth their while in using them.
Yes been there done that as the developer. One issue is getting rid of your Barter Dollars to your trade suppliers and sub contractors.
Anyone who takes it charges you maximum retail price so no trade discount.
Also a lot of them only take a small percentage of trade and the balance in hard cash or cheque. As the ATO consider a Barter dollar as a real dollar who still pay tax and GST on the transaction.
Considering there is a secondary market for Barter Dollars (You can buy them for around 47 cents to a Barter Dollar)somebody has to be the looser.
Also i would check the property value out very carefully if i was getting the Vendor to take BarterDollars as most are over valued or you could have made an offer and saved off the purchase price.
With regards to an independant valuation i think we have all been there. You can get 3 different valuations and get 3 different answers – all independant.
Hi Terry
Thanks for the interesting post.
We have used either NAB or Adelaide Bank for our wrap refinances both of who in the past gone to 95% LVR but Livery is certainly another avenue with its flexibility.
Dependant on the type of property you could obtain between 70-80% of valuation maybe slightly less if it was a specialised security.
This means 20-30% deposit enough for acquisitions costs and subject to income you are in with a shoot.
Credit history is important for a higher lvr although the history of the tenant is probably just as important. I am assuming that your credit history is not blemished.
Retired full time at 39 but after spending 2 years playing golf each day and dropping kids to school and rushing home to catch lunchtime shows such as Dr Phil i am going back into the workforce for a break.
My father told me you need to plan for retirement or you get bored and how right he was. At least if I go back to work I can have an excuse why I dont have time to undertake all the minor jobs around the house.
For someone who has been involved in the development market in Brisbane and SE Qld for the last 11 years I dont think you question is foolish.
Certainly Brisbane and the surrounding suburbs have seen the number of viable development opportunities diminish and a lot of developers including ourselves land bank property until the market stabilises.
You need however to ask yourself why do you want to develop in the first place. If it to make a profit after selling the properties then maybe now is not the best time to enagage on your first project unless you can buy well.
If however you are looking to build both equity and long term income then now maybe an ideal time to start.
The difference is in the profit margin you are prepared to accept.
In good times a developer will look at 20-25% as a minimum return on his capital. Anything less than then he would not put his money to risk.
If however you are happy to own the properties at say 20% less than market value and be happy to rent them out and enjoy the income stream benefits then go for it.
Remember that whilst death maybe a certainity, Tax is not. Both GST and Trading profit or CGT is only assessible once you sell the project and realise the gain.
If you keep the property and utilise the newly formed equity then you can go again and again. As long as you can service the loan then the equity will start to build up as the market increases.
Your income from the rent maybe taxable but the other expenses will be deductible including depreciation and capital allowances and will offset this income.
You might like to register for Real Works the REIQ’s electronic version of Standard Contracts which can save time and imporve presentation when making multiple offers.
Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap CD which gives you a full Installment Contract.
Richard Taylor | Australia's leading private lender
Andrew you see we are not all bad in the wrapping business.
Just one point you made that may differ from Oz. You mention “We allow all our wrappees to lodge a caveat on the title of the property registering an interest after they have completed 6 months of payments with out missing any.”
In Australia they have a right under the Property Act to lodge a caveat and do not require the consent of the wrapper.
Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap CD which gives you a full Installment Contract.
Richard Taylor | Australia's leading private lender
In response to the last couple of post on this topic:
1) Cruiser hate to say that Judge Geoffrey Thompson disagreed with you and agreed with me in case we took 3 years against a wrappee in the Rockhampton County Court. The client has constructed an illegal extension using his own funds without the expression or consent of the Planning Dept of the Rockhampton City Council or us as the owner.
The Court ruled in our favour and stated that the wrappee had NO caveatable interest in the property and gave an order for the caveat to be removed under our Power of Attorney clause.
None of the net sale proceeds of the subsequent sale where returned to the wrappee.
2) xulder – A wrappe is certainly entitled to make application for the FHOG although the payment of this is different in each State. In Qld payment is only made once certain conditions are met which include:
A) A minimum of 10% of the installment contract price has been paid in both Principal & Interest subeject to this exceeding $7000. The contract has been on foot for a minimum of 1 Year and has been conducted satifactorily.
Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap CD which gives you a full Installment Contract.
Richard Taylor | Australia's leading private lender
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