Forum Replies Created
Hi Logan
Dont want to be the bearer of bad news but i have to say with the information to hand it isnt going to happen.
Sure there are some private lenders that offer GR loans however they are looking for a combination of past experience as well as a good asset position.
Such lending is based on a combination of GR or cost price net of GSTand then in most cases you cannot for the soft costs.
As i say lenders are going to want to see some good asset backing before they consider such a deal.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Nue
I think JacM covers Vic, NSW, and QLD.
Couldnt go far wrong there.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
The other thing a good buyers agent does (and i have to say JacM is too modest but she is an excellent one) is listens to what you want and caters the end product around that.
To often i see clients end up with a property that probably doesn't suit their needs and objectives and they end up saying to themselves "at least we are on the first rung of the investing ladder".
With our "Turbo charge" your portfolio approach we have a series of stages that we walk the investor thru remembering that it is not just a one off buy and forget it is a partnership you with over a number of years to achieve what you want.
Buying on your doorstep may not necessarily be the right approach so with an interstate or intra state purchase i think a good BA is well worth investing in.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Must admit i read your post and then read it and still was slightly confused.
Why don't you look at 100% funding using a Term Deposit as collateral security and that way you could finance 100% of construction without the need for LMI.
It is hard to comment further without knowing your medium and longer term goals.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Jen
Firstly thank you Jacqui for your kind ping.
Couple of initial alarm bells starting to ring.
1) Why oh why did the Bank take your own PPOR as security and not the investment property being purchased.
I can guess why but not a recommended strategy going forward unless they are of unusual Title or location.
2) You say you do not currently have an income but i am assuming you have Tax on the profits of the properties you bought and sold over the past years.
If so then we maybe able to take this income into consideration.
Also both current properties and your next acqusition will generate a rental income and this can be taken into
consideration when calculating serviceability.
Private finance is certainly an option but the rate of interest is likely to be ugly.
Acquisition would need to be a non coded loan and purchased in a Company name to get around the NCCP legislation however i am not convinced this is necessary.
More information would be need on both current position and the position going forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Jacqui
Many thanks for the kind words.
Yes you would be surprised how many times i have conversations with so called Professionals who have no idea the name that goes on the Purchase contract when buying in a SMSF name, what name the building insurance goes in etc etc etc.
I have seen Trust Deeds where the members names are incorrect to Bare Trust Deeds which have been sent to us where no property address has been inserted.
Lenders just love this and usually send them back telling you to get it right and then come back to us.
In the meantime, the time clock on your settlement is ticking.
There are so many tricks of the trade and hurdles to get over we spend a lot of out time at the moment establishing SMSF's and then assisting clients find the right property.
So many think they can buy a nice property, subdivide the block and later build on it.
Hate to say the ATO simply does not allow it. Often of course it is too late by the time they realise.
For a few well spent dollars not only can you get your SMSF Deed set up correctly but you can then get your property portfolio well under way.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Crest don't worry cant afford it with a wife and 3 kids to support lol
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As long as you don't contaminate the LOC with your current loan you should be fine.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
TCM if the LOC is already set up and the accessible funds just sitting there then absolutely no reason why you wouldn't use it.
Keep the loans separate and you can't go to far wrong.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Jermiah
If you are referring to Steve's comment about increasing your ability to borrow buy using mutliple Trusts then i think you will find Steve has clarified the position.
Each guarantee needs to be declared and would have a bearing on your serviceability
There are many other ways to maintain your borrowing level without having to resort to non disclosure.
I only have the one spare copy of the book so whoever shoots me an email first i will send it to.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Oh i agree Jamie and Brisbane will be down to that in the new town plan.
Mind you takes less time to mow and maintain than my 2500 sq M city block.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Kannabrank
Welcome to the forum and i hope you enjoy your time with us.
422 Sq M is fairly small so you will be limited to what you can build on such a site.
As far as cost is concerned there is no 1 price fits all as a standard 3 bedroom brick lowset will be a lot cheaper than an architectually designed Qlder.
Why not try some of the smaller project home builder such as Dixon etc to get a guide price but realistically if you work on say $850 / Sq M you are probably not too far off the mark.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi TCM
Firstly welcome to the forum and I hope you enjoy your time with us,
Without full details it is difficult to provide you with an accurate answer however depending on the numbers the way you would normally try and structure something like this would be to covert your existing loan to interest only, then make application for an equity loan to 90% of the market valuation.
Use the available equity loan as deposit on your new property together with your offset funds (assuming that the new property is for owner occupation) and then borrow separately against the land to cover the construction costs etc.
Depending on the overall lvr will depend on the actual LMI cost so probably get your Broker to run the numbers on both scenarios to see which one works out best and reduces your upfront expenditure.
Hope this helps and good luck with the move.
As always any questions ask.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Terry is bang on and hate to say whoever has told you to the contrary is totally incorrect.
You cannot use the property as security but certainly borrow against another property and look to purchase the property a Tenants in Common.
Definitely seek expert advice on this one.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Matt
Ok if you have owned before then hate to say NO you wouldn't get the S/D concession or indeed the Building Grant.
With $30K it depends on what you are trying to achieve from your purchase / s ?
If you want to spread it across a couple of purchases then your choice of finance is quite important.
There are a couple of options to reduce your LMI premium yet maximize your borrowings depending on your repayment ability.
Limited deposits are a killer for many investor going forward so you need to be creative and inventive going forward.
Cheers
Yours in Finanace
Richard Taylor | Australia's leading private lender
Mortgage Choice are a public listed company so like any organisation such as this have to increase the bottom line for their shareholders.
They are a sausage factory where they get certain over ride commission rates from certain lenders who then become their favourite lender irrespective of whether it is right for the client or not.
You purely rely on whether the individual who purchased the franchise in your area has any investment property experience or not.
If not like the say at McDonalds you will get fries with it like it or not.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Milliet
No sure who told you that UK Banks will lend with 25% deposit but i hate to say with 1 exception all UK lenders have pulled out of the Non Resident market even if you hold a UK Passport.
This particular lender only lends in selected Home Counties areas although has a maximum lvr of 60-65% and a minimum loan of 100 GBP.
I go back every year and up until this year we used to buy property for our UK clients living in Oz securing financing at excellent rates and lvr's.
A total withdrawal of funding for Residents living overseas has not helped improve the market.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi TheOoz
Firstly welcome to the forum and I hope you enjoy your time with us.
The boys have given you some good pluses of acquiring properties using a DFT structure so i wont repeat old ground.
What you need to ask yourself is what do i really want from my portfolio and when you state you want to be financial free in 9 years what do you mean by this statement.
I was lucky enough to be able to retire from the workforce at age 40 with property assets in excess of $20M and rental income now of over $600K per annum.
We did the hard yards and paid down all bar $1.1 M of debt which i will pay off within 24 months and therefore other than general costs such as rates, insurance etc have no other expenses with the exception of income tax.
Reason i mention this is when we work with clients trying to turbo charge their portfolio they all want something different from property.
Some see themselves trying their hand at a little bit of property development and we try and source property with such attributes others want the rental income and less of a capital expenditure and want to diversify their risk.
Each person is different and therefore has different requirements.
It is not a matter of one cap fitting all and whilst a DFT might be suitable in certain circumstances it may not suit everyone.
I have a spare copy of Trust Magic which will happily send you.
Few years out of date but the concept doesnt change.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Issy welcome to the forum and i hope you enjoy your time with us.
As to whether the area is a good area to invest probably needs a lot more research but i am with Jack if the prices have come back over the last 12 months or so then you have to ask yourself why.
Also new property whilst it might give you an initial increase in the amount you can claim by way of upfront deductions (remember you indirectly pay back the capital allowances when you sell the property) you have to ask yourself what has been hidden in the price by way of marketing or development fees.
The other consideration is the Qld market generally.
Whilst i live in Brisbane and own all of my properties in the Sunshine State i think there are many better areas to put your money depending on what your goals are.
Are you looking for possible capital growth or cash flow. Remember you cannot retire on Capital growth alone unless you sell the property.
This is something we teach our investment property students when we work with them in turbo charging their portfolios.
Many of us seem to have forgotten about yield over the last few years with all of the excitement in capital growth and prices heading northwards.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Matt
Couple of quick points that might be worth thinking about.
1) FHOG has been and gone and has been replaced with $15K Great Start Grant. As long as you move in with 12 months and live in the property continously for 6 months you should qualify. Course assumes that you have never owned another property in Oz before (PPOR or not).
2) Your property will only be valued at land cost + fixed price construction cost by any lender. Sure might be worth more but you wont be able to access the available equity.
3) Stamp duty concession will not be available if you don't reside in the property from day 1 however as it is based on land alone wont be a killer.
Course you need to factor in the sales costs, interest whilst you are living in the property etc.
Seems like a lot of effort to get into the market when with 30K you could start to build a decent investment portfolio especially with some clever use of your capital.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
