Being a doctor you will have access to special commercial loans; via the big 4 banks.

LVR: 75-80%
Term: Up to 15-20 years possible with 3-5 years i/o
Rate: Sub 5.20% Variable or fixed from 4.85% for 3 years

IN Aus you can get 10 and 15 years fixed rate with the big banks..it’s just not common…in fact i think i have only ever written ONE 15 years fixed rate and it was for a non-resident as well.

Richard Taylor wrote:

Half the trick is to structure your portfolio in such a manner that you use the least generous lenders first and then work thru those with more favourable credit policies.

Too many borrowers are merely driven by interest rates and believe the cheapest rate is the be all and end all. Regretfully they found out

^ Richard nailed it on the head!
It comes down to “order of lender based on your situation” and choosing the right loan structure/lenders.

Commercial bank valuations will depend on a lot of factors ( you really need to neg and shop around too)
– Lender
– Type of commercial ( Specialized/ one shop/ multiple shops/ office/ retail/ warehouse etc..)
– Cost of the transaction/purchase
– Location
– Construction or existing property

Generally bank commercial valuation can range from $800-$4000+

P.s Generally you pay…

• This reply was modified 9 years, 10 months ago by  Mick C.

1. Mother guarantor and use her PPOR to pay 0% deposit and put savings into offset account for further IP — I would only recommend this way if literally have no money/savings….as you can leverage the full 20%. The risk for your mother is not something i would want on anybody else if your mother is no longer working etc…her security is tired up for a good 3-4 years + …she can’t move,downsize and 2 properties is at risk.

Given your property will be a IP, should you get sued by the tenant for what ever reason ( rare, but does happen ) ie maybe your smoke alarm didn;t work and the tenant got injured in a fire etc…you will need to sell up both properties potentially.

2. Mother or close friend with same goals to co-applicant (split deposit) – Now the risk of “argument” can come up and future expectation. It’s not easy finding the same “investing” partner that as the same mind set and future goal…you may be the best of friends but the worst investing partner

– What happens if one wants to sell and the another dont?
– One gets married and wants to exit now…or one wants to down size etc…

Back in my uni days when i shared rent with my best friend of 8 years, all was good till we moved in….not only did i lose a “renting” partner i also lost a good mate. Same theory applies too joint property investing.

3. Wait 6-8 months and save the remaining $35k for deposit and go solo – Why wait if you found the right property?

Option 4: Sounds like you have 10% ready to go now? or even 5%? — go invest and take up the 90-95% loan if your ok with the repayments…yes you will need to pay LMI;

– LMI is tax dedutiable for IP
– Your property should go up more than the LMI cost
– No risk of using the wrong investing partner or risking your mum’s house
– Get in to the market now rather than 6 month later…6 month time the property may have gone up more than the lMI cost you would have paid today.

Option 5: Can your mum “lend” or gift you the money?? 10% cash.

Hi Phil.

1. Smaller apartments under 40 sq meters generally requires a higher deposit – 30-40% in some cases, depending on the location…so this is one reason why it may sit on the market for a long time as really it’s targeted for cash up experienced investors.

2. Rental yield is important but Capital growth is equally if not more important for your 1st property, as it’s your foundation property; this is where your going to “hope” to get more equity out in 1-2 years time so you can repeat the cycle

3. Have you considered an 90-95% loan??? it’s available and for smaller purchases ie under $300,000 the lMI cost ( Lenders mortgage insurance) is not too bad and def more adorable.

As long as you have an average-decent income and $25,000 in deposit, depending on the lender you choose and your servicing and overall credit file you should be able to buy in the $260,000- $300,000 bracket at a 95% lend.

4. Focus on t he property, suburb, growth potential,. yield and return NOT THE PRICE.
Just because it’s cheaper doesn’t mean it’s worth that price.

5. This is your 1st property and most importantly this money you saved up is your HARD EARNED cash invest in it wisely, dont get the price bracket drive you into the wrong purchase.

A few reasons…you really need to work with the banks policy and plan rather than aimless apply for the loans/LOC

1. If you go past 80-85% LVR ( ie your 90%) the use of funds MUST be proven either form
– Sale contract
– Letter from accountant/ financial adviser
– Quote for renovations etc..

At over 80-85% your limited to Max 20% of the property value as cash out only.

2. Regarding serviceability if you say your using it to purchase another IP…than they will need to make sure you can afford the 2nd loan as well.

Note every bank as diff cash pout policy.
You speak to any investor and they will probably tell you they got cash out of $50,000 – $150,000 with no issues…it’s all about planning for the right lender for the right use. CBA tends to be an average lender for cash out purposes ( if you dont want to give any proof)

^ Disregard my last post…read the OP post again….not bankruptcy but recent defaults on file…diff story.

It’s possible but requires a few years of planning on the right loans and buy structure, lender and most importantly pre-planning…not something you can do off the bat.

Most of our flip clients who’s doing this now full time ( flipping 2-3 properties per year ) had to go through a 12-18+ month planning stage. As the only way to get this across the line without working was to consider the “flip project” as a BUSINESS ie your a professional flipper…

^ As you can imagine, getting the 1st years income is the hardest and hence why we can’t write the loan till a good >12-month after planning with our brokers and your accountant.

Else the easy way out is to keep your full time job and using that income to service the loan for the flips. But at the same time you may want to plan for the ^ above if your wanting to do this full time.

But you can imagine the amount of work required and planning, so really we also pre qualify our clients before we take them on board this flip journey to make sure their financial, mental and desire is strong enough to last the 12-18 month pre planning.

1. Find lender with DUA with Genworth ( the other LMI provider) OR an internal LMI provider …ie not QBE — This option you still only really have a medium size chance of approval as you been rejected by QBE previously and Genworth will always ask ” have you been rejected by a LMI provider in the last 12 month” so your file needs to be absolutely strong + most of the internal LMI provider that does go to 95% ( ie Westpac and ANZ) still have strict conditions and most importantly they still credit score.

2. Go for a non-bank that offers NO LMI at 95% but instead charges a once off risk fee ( similar to LMI); def higher chance of approval. ON average most client who goes for the risk fee would have either a very active credit file ~25-40 in the last 12 month and want to apply for a high LVR OR some sort of bad credit ( discharged bankruptcy, listed defaults, judgments etc..).

Risk fee is 0.5-2% higher than LMI cost, depending on lender.

Option 1 is def preferred…if your file can pass the lenders DUA + credit scoring.