Forum Replies Created
Hi David
Yes we locate these sorts of properties for our clients all day long.
Sure takes some time and many years of in depth research & knowledge (which my business partner looks after).
As long as the town is big enough in population and acceptable to a lender then it is certainly doable.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Which State are you in ?
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Yours in Finance
Richard Taylor | Australia's leading private lender
Sorry Bought with Equity but that is certainly not a sounds investment strategy.
Why would you pay cash for a property that you intended to rent out and then and go and borrow again to buy again for a new PPOR.
The interest would not be deductible on property 2 as it was for a PPOR and yet you would taxed on the rental income being received from property 1.
I appreciate you are here for one reason and one reason only and that is to try and flog your USA investments but please ensure that any comment made is practical to the situation.
Ill conceived strategies will prove very expensive for the forum member who lives in Australia if the strategy and structure is incorrect.
Enc,
If you think you will live in the first PPOR for some year then by all means look to pay cash for the property and gear against for deposit on other properties however if you think that you will possibly rent the property in the near future and haven't decided on an IP yet then look at borrowing 100% of the purchase price and using a Term Deposit as collateral security.
This maximises potential interest deductions whilst in the meantime keeping your cash funds liquid.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thankfully this isn't the USA.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Benny
Not sure which part of Brisbane your investment properties are located but mine which are mostly in the Inner West suburbs have gone thru the roof recently.
I listed a block of 6 units in 1 line for Private Tender a month or so back and was stunned by the response i got.
Some of the Tender offers were $200K over what i estimated the valuation.
Unfortunately as ever buyer wanted the purchase subject to finance I have decided to retain the block and relist it again in the Spring when i expect the prices to be ever higher.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Bought with Equity, foreclosing on a property which has been sold thru Vendor Finance I.e Installment Contract, Deposit Finance is not quite that easy.
Firstly being a Credit contract you need to be Licensed to offer such a product and then it falls under the NCCP legislation.
This is exactly the same legislation which standard High Street lenders are governed by in regards to default notices, repossession etc.
It is not a matter of merely asking the buyer to leave because he has missed a payment.
A Call Option agreement is something totally different so make sure you get proper advice before undertaking such an arrangement.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I agree with Catalyst seems strange to me.
Imagine you sign up a tenant who works in a factory and the 2 weeks later joins the Army and decides to vacate.
If you had known that from day 1 you may have taken another application.
Rather than rely on the Managing Agent I would be ringing the relevant Tenancy Authority body in NSW.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
What State is the property in?
Find the legislation hard to believe but would need to know the location of the property before i could comment further.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi se7en
Answers to your questions fairly straight forward
1) No lenders lend against the security value so whether the property is 5 weeks old or 50 years old really has no bearing on the loan as long as the valuation report reads well and no additional factors noted.
2) Most lenders will take into account anticipated rent on the property even if the rent wont kick in until the property has been completed. The rent will be applied as standard rental income when calculating serviceability.
Sure it is nice to by new but lenders do not in the main factor Depreciation or Capital Allowance claims into the borrowing equation.
We find most of our clients want us to source them property based on an improved yield over the long term and understand that buying a quality second hand property can bring them potential capital growth as well as income in the meantime.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Jenny
Yes i think that as long as you understand the loan would not be formally approval until the 10% deposit has been evidenced and by this stage you may have exchanged contracts.
You run the risk of course of losing your deposit if for whatever reason finance is declined.
You still have to cover your acquisition costs and lenders will want to see this is in hand.
Are you sure the vendor is going to agree to such a lengthy settlement ?
I am assuming it is not a favourable purchase or you know the vendor.
1 month should be sufficient to get finance over the line and settled.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Never heard of them.
What are they promoting?
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Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Jenny
Welcome to the forum and i hope you enjoy your time with us.
You wont get any lender give you a formal approval without evidence the deposit has been paid in full so i would suggest that you be careful going unconditional without having finance all approved.
Also you wont get any lender lend you the acquisition costs without additional security. You might get the LMI capitallsed depending on a few factors.
Rate of interest will depend on a few things but work on between 5-5.5% and you wont go to far wrong. (Always exceptions but a good guide when starting out)
There might be a couple of ways around this if you can save at least 5% deposit over a minimum of 3 months depending on which State you are in.
Can't comment about all Brokers but we don't charge a Brokerage fee for our services irrespective of the loan amount.
Doing one for a forum client for $46K buying a property in Broken Hill but a good client so we are happy to help out.
Hope this helps. Any questions ask away.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Charlotte, The capital gain less adjustments is added to you Taxable income and is paid at your marginal tax rate.
If the asset is held for more than 365 days then a concessionary rate is charged
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Yours in Finance
Richard Taylor | Australia's leading private lender
Anthony firstly would be keeping your cash in an offset account so this gives you flexibility going forward.
If it is a favourable purchase you maybe able to borrow against the valuation rather than the purchase price but you need to bear in mind that the Seller may have to pay CGT based on the true value and not the discounted price. If this is the case they may ask you to contribute towards this.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Yes i think the worst one i have ever seen was 13 properties all cross collateralised to one of the majors.
Clients were on the verge of retirement and wanted to sell their PPOR and use the net proceeds to buy into an over 55 home.
Unfortunately when their existing Bank revalued the existing securities they refused to release any of the net cash proceeds on the PPOR.
Took many months but we managed to get them all revalued and all on a standalone basis.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Certainly can't see immediate reason why the Cash Rate will increase in the near future but interesting to see the spike in 3 year + fixed rates.
See couple of lenders are saying that 3 year rates have risen 8 bps in the last 30 days.
Currently in the UK and here the Bank of England rate is expected to rise 9 times over the next interest rate cycle which will certainly hurt mortgage customers.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Little Master
Firstly welcome to the forum and i hope you enjoy your time with us.
I think you have answered your own question and that is if you are reading negative comments about the organisation then that probably tells you what a lot of people think.
As a property adviser and buyers agent i am slightly biased but we certainly wouldn't be putting any of our forum clients into such a development.
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Yours in Finance
Richard Taylor | Australia's leading private lender
Welcome to the forum SC and i hope you enjoy your time with us.
I always favour reducing the amount of debt secured against your PPOR for the IP deposit so would probably suggest it is a matter of working backwards.
What we would look to do is establish what you would need to cover say a 10% deposit on a 400K purchase and then add in the acquisition costs etc.
Then we look at restructuring your current PPOR loan to raise the shortfall.
Assuming you have sufficient income to support the total borrowings i cannot see any initial problems but as mentioned probably a matter of organising an upfront valuation on your PPOR to work out what equity you have to play with.
All in all structured correctly you should be able to acquire the new property and put you in a position to start reducing the non deductible debt on your PPOR and set yourself up for further investment acqusitions.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Minds eye hate to say S/D may well be payable depending on the State in which you are in.
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Yours in Finance
Richard Taylor | Australia's leading private lender
If you don't want to go to expense of a SMSF Bank Loan and various Bank Solicitors Deed perusal fees etc you could always look at a Related Party loan which would be a lot cheaper to set up.
As Terry mentioned you cannot use the asset as security after settlement to raise funds or use as collateral security so make sure you get it right first time.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
