Forum Replies Created
I think it is a good idea to set a date of expiry for offers. If you sign the contract of sale and attach a cheque for the deposit as part of your offer, the vendor can sit on it for as long as they like if you don’t set an expiry date. Exchange takes place once the vendor and purchaser sign the contract. You may end up with a property you don’t want thinking the vendor did not accept.
I would word it so the date of expiry included notification being ‘RECEIVED’ of acceptance by your solicitor on the date you choose.
Robert Bou-Hamdan
Mortgage AdviserSo you are David looking for a 4 bedroom home on the NORTHERN BEACHES then?
Robert Bou-Hamdan
Mortgage AdviserNo lender can legally prevent you from borrowing money based on age alone. If you meet all other requirements, you are eligible for exactly the same loan as a comparable 30 year old (ie: 30 year loan term). I would use a broker so they can go to bat for you if the lender tries to decline your loan on other grounds as an excuse. They usually look for another way out.
Good luck with it all.
Robert Bou-Hamdan
Mortgage AdviserScenario – Return on Investment Property
Jack is in the highest marginal tax bracket earning $80,000 per annum and decides to buy an investment property in NSW for $100,000. He borrows $105,000 at 6.75% per annum to complete the purchase and to pay all closing costs (assume costs total 5% of purchase price). His interest only repayments total $590.63 per month. The property rents for $150.00 per week giving him a total of $650.00 per month. He sells the property in five years and does not receive any pay increases in that time.
Is this a good investment?
Assume 10% per annum growth in property value and 2.5% inflation per annum.
MY RESULTS
$80,000.00 Gross Income
$7,800.00 Rental Income-$7,087.50 Interest Expense
-$2,000.00 Running Costs (Property Manager, Insurance, Maintenance, etc)$55,488.47 Net Income before property
$54,825.41 Net Income after property year 1,2,3,4,5$110,000.00 Property Value Year 1
$121,000.00 Property Value Year 2
$133,100.00 Property Value Year 3
$146,410.00 Property Value Year 4
$161,051.00 Property Value Year 5$161,051.00 Property Sale Price
-$105,000.00 Loan Repayment
$56,051.00 Capital Gain (assumes costs deducted)
-$6,796.18 Capital Gains Tax (25%)
-$4,831.53 Agent Commission (3%)
-$3,623.65 Vendor Tax (2.25%)
-$3,315.30 Reduced Income (5 years)$37,484.34 Net Capital Gain
Effect of Inflation
-$1,370.64 Income Year 1
-$1,336.37 Income Year 2
-$1,302.96 Income Year 3
-$1,270.39 Income Year 4
-$1,238.63 Income Year 5-$250.00 Capital Gain Year 1
-$275.00 Capital Gain Year 2
-$302.50 Capital Gain Year 3
-$332.75 Capital Gain Year 4
-$366.03 Capital Gain Year 5-$8,045.27 Total loss from inflation
$29,439.07 Real return over 5 years
In my opinion, the negative impact on cash flow would have a greater effect on the real return figure presented above.
I guess what this thread shows is how different people look at a particular investment. I am certainly not an accountant but I thought my figure was conservative. I believe it could be even lower yet most people came up with higher figures. Hopefully an accountant could give us their comments.
Most people would be very happy with this sort of return over 5 years but it took huge capital gains to achieve it. I have not done the figures yet but would like to see results if the property only grew at a rate of 4% per annum. I will post these figures in a few days.
Robert Bou-Hamdan
Mortgage AdviserHey Kerry,
Those damn Bourbon and Cokes hey?????
There is nothing you said in that post that would get you banned. You know the ONLY ONE who gets banned around here is yours truly. I can teach you how if you like.
I also specialise in ball-busting to get back in (Poor Steve)!!! This is an art form.
Anyway, your post is spot on. I personally think you could have been a lot harsher as you and I both know there are some shockers out there calling themselves brokers out for a quick buck. That is one of the many reasons I am seeking greener pastures elsewhere.
You are doing good things so hopefully you will implement some change in your part of the world. Things should come good eventually.
Cheer up and keep smiling.
Robert Bou-Hamdan
Mortgage AdviserMy ideal place to live, and hopefully it will happen in about two years, is on a 40 foot sailing catamaran cruising wherever I feel like it. If I get sick of the view, I just have to pull up anchor and move on.
As long as I have access to satellite internet and phone connectivity and a cashflow solid enough to maintain the boat and lifestyle, I am set.
It would be a great office to entertain clients.
Robert Bou-Hamdan
Mortgage AdviserI have seen a few developer fire sales sell for well below market price or for what is owed to their lender. This is usually done by the developer though. The problem with determining market price is difficult in the current economic climate.
The difficulty financing a partially completed development also makes these properties less attractive.
Robert Bou-Hamdan
Mortgage AdviserIf you are considering going direct to a bank for a loan, you would be doing yourself a dis-service. The employees can and will only tell you about their own products. This could cost you a fortune in unnecessary interest.
Regarding bank accounts etc, just shop around as there is so much variation between each bank. I am partial to ANZ due to their excellent online banking. My account does not cost me any fees either as I do all my banking online.
Robert Bou-Hamdan
Mortgage AdviserI am not offended at all.
A lot of people just find my inquisitive nature as offensive. Each to their own. I find the more I ask / question / doubt / challenge (whatever you want to call it), the more I learn.
As for this discussion topic, I can’t comment regarding commercial property as it is not my area of expertise, but regarding coded loans (UCCC), it is not legally possible to do under-the-counter or behind the scenes deals. There is a legislative responsibility to obtain the best price possible for the borrower so properties are placed on the open market (usually through mortgage auction sale). Any proceeds above what is owed are forwarded to the borrower who defaulted.
Part of this responsibility is to sell the property at the lowest cost possible as well. When I worked in real estate, the process involved a lender sending a request to 3 or 4 agents who responded with a quote. The lender was then obliged to accept the lowest quote from a reputable agent. There were certainly no 8 or 9% commissions.
Robert Bou-Hamdan
Mortgage AdviserA 5 bedroom is not excessive to those couples with 4 kids.
As with anything, if there is a demand, there will be a supply. I would not go much more than a 4 bedroom house as an investment though.
Robert Bou-Hamdan
Mortgage AdviserI am so over Coogee. I call it ‘The Mini UK’ as a result of all the English, Irish and Scottish that hang around. You have to love the songs on their way home at 3 am or the bins flying and cars being kicked if their team loses in the soccer. How about the shop windows being smashed if they don’t find a girl to take home that night???
By the way, we are on Coogee Bay Road just up from the CBH and on the preferred route of the Coogee RSL locals on their way to the CBH. It cannot get any worse. Fight night at the RSL is just trouble personified. The Lakemba and Campsie boys come in their droves.
I am considering moving into a high-rise unit in the inner city. I will make my decision soon when I determine which job I will take but anywhere will be better than Coogee for me.
I was recently told by a policeman that Coogee had one of the highest break into vehicle rates of anywhere in Australia.
I guess there is good and bad everywhere.
Robert Bou-Hamdan
Mortgage AdviserHey Acey,
What does CRIN stand for or, more specifically, what does the R stand for? I think I can guess the rest.
Also, am I ever going to be invited to one of these meetings you go to? You still attend the Sydney meetings don’t you?
Robert Bou-Hamdan
Mortgage AdviserI actually spoke with an architect regarding getting a home built. The cost seems rather high when they tell you but I believe the benefits will pay off when the property is completed and/or when you sell it. Architecturally designed homes usually attract a higher valuation if the work is quality which enables you to access more equity or just have more equity available to you.
Robert Bou-Hamdan
Mortgage AdviserIt was not meant to be a cheap shot. Maybe I should have worded the question better. Do you get PPOR properties and sell them at below market in the same manner you were offering the units? I really want to know.
Cheap shots may come at a later stage dependent on your answer.
Robert Bou-Hamdan
Mortgage AdviserA simple solution to the rental question is to ask for 12 months rental statements. If he screams and shouts or says he doesn’t have any because it was self-managed, ask for bank account statements showing the rent going in. If he does not present these, I would walk away.
Regarding the floor size, for a 1 bedroom unit to be that big, it would mean that the internal floor space is as big as a house.
Robert Bou-Hamdan
Mortgage AdviserGraham, you chose the word “reaction” but should have used the term ‘response’. This is a discussion forum and posts are the only way to discuss. My mother taught me it was rude not to respond when being spoken to so I respond. You have not stirred me up at all. I am merely ‘responding’.
The red writing was used for ease of navigation in a long thread. I was trying to be considerate to readers and highlight some main points. It has nothing to do with ‘danger’. I will change it to blue if that makes you feel better.
You are right about answering a question and I merely corrected your response because I thought it was inappropriate to mislead people in the way you answered your question. You persisted with your response and now you are seeking a “truce”. As I believe a truce only applies when people are fighting or at war, I don’t think a truce is warranted here.
Feel free to admit your comments were fabricated or demonstrate evidence to support those comments or merely cease posting that your comments were true and I will stop responding.
Have fun mate.
Robert Bou-Hamdan
Mortgage AdviserOriginally posted by Salubrious:I get regular listings, the latest to sell were 30 X 2 bed units in “Sydney Metro”, Value 400k sold 280k. These are direct from the bank, we charge a 8% fee per sale price or lead fee, call it what you will.
So I guess the answer to the question is yes, you can! The above properties had to be foreclosed as the developer got into some hot water. When the bank has had enough, it has had enough.
We are all made from Stars
I am wondering… do you also get single dwellings from families who went bust and sell them below market price?
Robert Bou-Hamdan
Mortgage AdviserSorry mate. No can do. Does CRACKER mean anything to you? Either you are telling fibs here or elsewhere David.
http://cracker.com.au/viewthread.aspx?threadid=47542&categoryid=11061
I am happy to deal with anyone that I believe is straight up.
In any case, I only wanted to know what software you were involved with in case it interested me.
Have a nice night.
Robert Bou-Hamdan
Mortgage AdviserOriginally posted by Salubrious:Patience is a virtue Rob, I tell you what, I will give you a clue seeing that you are teething at the dummy Robbie my boy.
I really don’t care mate.
“Staff Rate”………..ooooooohhhhhh stay tuned for more information from the Salubrious, the person who hides behind the cloak of darkness so that he may hide his unprofessional conduct as a Robbie classified professional………….ohhhhhhhhhhhhh who said I was supposed to be professional anyway? You should open up a verbal label-making factory Robbie; you have missed your forte!Here comes the strings.
You implied you were a professional as you need accreditation or must be an employee to write a loan with HomeSide.
Your label making comments are extremely professional and very mature.
Do you live for my replies Rob? Do you wait in excited anticipation of the next move? Does mocking a fellow forum member between your friends constitute professional behavior? Do you have a little chuckle at my expense in the late night hours when your all alone?Like I said, I don’t care. I just won’t let anyone publicly state something which I believe to be untrue. It is irresponsible and misleading.
Mocking anyone is definately not professional. People joke all the time but it seems you are a little more sensitive than most so I will refrain from mocking you and stick to the facts from now on. Regarding having a chuckle, I always do when you post about this. I apologise for my comments that mocked you.
I also am waiting in anticipation to see your face when I slip this contract under your grinning face… I must remember to pack the camera!I don’t know what you expect but it won’t be anything spectacular. IF you can ever prove your statement, I will merely concede that I was incorrect and move on. It makes no huge difference to my life.
Now for some more FACTS!!!
Salubrious, here is what you said and what was being challenged.
Originally posted by Salubrious:Homeside, 6.62% No strings to 250k then 6.5% 250k/500k.
Originally posted by Salubrious:… No strings …
Originally posted by Salubrious:… No strings …
Originally posted by Salubrious:… No strings …
Originally posted by Salubrious:… No strings …
The more you go on, the more strings that come out.
First it was a requirement to know someone. That is a HUGE string…
Originally posted by Salubrious:I understand Richard, but the old saying is “it isn’t what you know, its who”! I just wrote the loan for a mate of mine.
Then you emphasized your response to who had the cheapest LOC and still no strings.
Originally posted by Salubrious:I have nothing to prove to a Mortgage Broker/Manager nor anyone else for that matter, I simply answered a question. Once again, for the hard of hearing 6.62%.
Nest you asked me to send you business implying you were a ‘professional’ broker as it is clear what I do. I can’t see any other conclusion being made from this comment.
Originally posted by Salubrious:Would you send me some business if I can prove it Rob? Also, I would like for you to pay for my next night out on the town with some clients as a wager, is that fair?
Then this comment…
“Staff Rate”I think you need the whole ball of string in this situation.
One question…
Why does a staff member need YOU to write their staff loan (which I still believe would not be at the rate stated)???
Anyway, facts it is from now on.
Have a nice night Salubrious.
Robert Bou-Hamdan
Mortgage AdviserAnd there is a HUGE difference between 100% and 90% loans.
Robert Bou-Hamdan
Mortgage Adviser
