Hi energy4anarchy,

Unfortunately in the general sense, I would have to agree with Yellina's comments regarding banking staff.  I am an active investor and also work as a lender in a retail branch.  Given my experiences I find it fairly easy to ensure my customers are looked after and their situation is explained clearly to the credit managers and mortgage insurers, however this isn't always the case industry wide.

Be it a broker, banker or any financier, ensuring the person completing the loan application has sufficient experience and knowledge of your situation will be your best advantage to gaining the finance you need more often.

The main issue I find working at one bank, is that we may have a great deal, but for one reason or another the banks tolerance for the particular asset risk at the time of application isn't what they're after, or they're already over-exposed – say the Gold Coast unit market or something similar.  Brokers that are keeping in constant contact with many financiers about current risk profiles can easily then flick the same deal to another lender where this isn't the case, rather than you doing the run around.

Hope that helps.

Sam

Hi there,

I thought I would put in my two cents on this topic given a recent experience a good friend of mine had looking at a similar proposal from Devine homes in the Holmview area, Logan (just south of Brisbane).

In this scenario, she was asked to purchase a single duplex unit, 3 bed, 1 bath, 1 car for $377k, with a 10 year rental guarantee, and they provided a depreciation schedule so you could claim your negative gearing losses weekly, ensuring you 'saved' money straight away.  These schedules normally cost around $1-$2k to have done if you build a new home, how nice of them to include it.

Of course they had they own valuers, they knew you had 20% deposit to put in (this is how they pre-qualify you for a phone call about the project in the first place), their own property managers (charged around 15% management fees, a standard agency is around 7-9% +GST) and their own brokers to do the finance.

When she asked me about it, and I saw the plans/finance setup, I immediately suggested getting her own independant valuation done.  This sorted out most of the issue as the valuation came in close to $150k below what Devine's valuers had come up with.   Outside of this, as previously suggested, the management fee was close to double a normal agency, allowing them room for vacancies to be paid for.

So not only were they taking the profit from the development, also from the property management and the broker upfront charges, and quite possibly the ongoing trail commissions also. 

If you ask me, it's a total crock.  Hopefully they're not all the same, because I feel sick in the stomach for the people who bought into this development.

Hope that gives you another view on the topic.

Cheers

Sam

Hi all,

I just thought i'd comment on the original topic of this conversation, which was created in 2006, and here we are in 2009.

Funny to see how mining shares were the hot thing to be tipping then, and how true alot of the comments have turned out to be.

Lets see what the next three years bring!

Who's keen to put a prediction in????

Cheers

Sambo

Hi Trance,

Richard is correct – It is possible to get finance for that type of unit for yourself through using mostly equity or cash, but imagine who will be buying the unit from you down the track – low end of the market, quite likely it will be a young couple wanting to get their first 'cheapish' property with minimal deposit, and they will be turned away by lenders if they're looking for an 80% lend. 

This will obviously reduce the units saleability.  Looking at LVR schedules right now – most lenders require a risk assessor before they'll even consider lending AT ALL for this type of unit.

And you would definately want a carpark as many have stated above.

Cheers & Good luck!

Sam Sandford
Sandford Finance Pty Ltd

Hey Wengyie,

I live in Brisbane and have looked at many many deals over the years in many different Brisbane suburbs, it really depends on what you are looking for.  I personally am chasing positive investments, and have found none in Brisbane thus far.  This obviously doesn't mean they aren't out there, but you will have to committ alot of time finding them. 

Warwick and surrounding areas has provided me with good profits in capital gains recently, but a good quality positive cashflow property still isn't shining.  Let me know if you find anything!  I am keen to go in as a business partner or provide some finance.

Cheers

Sam Sandford
Sandford Finance Pty Ltd