Also as a side note…you mentioned the population is 15,000; it sounds like it’s still part of a rural area ( given the returns and sale price as well)- this alone may push it outside the resi lenders comfort level.

Whats the postcode?

Regards
Michael

HI- yes there are a lot of talks lately about trust etc..but it’s not for everyone; i know of many investors who just buy under their own personal name.- speak to an accountant for this one.

With $150k, depending where you buy and what the average price is…yes you could buy 2-3 property. Note: you still need to pay for stamp duty, legal etc …so your $50k each.. becomes more like 35k each – but a 90-95% LVR lending could help, SO choosing lenders that will give you a discount for your LMI is beneficially.

Buy a place that’s slightly worn out- nothing major and since you have time on your hands you guys can do it up- paint etc…

Also given your age, how much you have in your super will become important at one stage in the lending process.

Regards
Michael

I would not reply on an bank’s online calculator
1. it’s not updated…ANZ one is like Nov 2010
2. It’s alwasy “better” compared to when you apply for the real thing….i guess they make you feel happy and once your sucked in it’s to late
3. It does not allow for more complex situations

Either speak to a broker or a bank manager and get them to give you the updated calculations based on your personal situation.

Regards
Michael

Hi,

Common question.

Short answer – yes it does affect your personal serviceability. As you need to declare all asset and liabilities you hold :
1. Personally
2. As a guarantee/ guarantor

Trust and company falls into the 2nd slot.

But as mentioned, there are some lenders that will ignore a trust’s asset and liabilities if your overall personal case is strong and your under a certain age etc..

But the real question is,is your serviceability really tight???

Regards
Michael

In terms of financing…
Commercial lending is very similar to residential lending, with only a few pitt falls to avoid + a few tricks to execute.
In fact, a few lenders uses the SAME form or similar form for the commercial and residential lending.
Main differences: Points the lender will look at;

1. Rate is higher – starts around 8.5% variable ( not intro)

2. Rental income is accepted at a certain % and it’s case by case …depending on the business your buying.
– example-
– Rental income from a shop front ( currently a bakery) – will take around 70% of rental
– Rental income from a Office ( currently rented to a accountant) located in CBD – wil take up to 90% of rental
– Empty shop front- will take 30% of potential rental
The trick here is HOW you PRESENT the loan, very important.

3. The security on offer; if your willing to use a residential property as 2nd security then rate would drop close to residential rate ( 7.15-7.8%)

4. Lease term- How many more years are left on the lease and what sort of lease is it.

5. Zoning – what uses does this property have?? can it be a car-workshop etc…
Normally Mixed zones are the simplest to approve.

6. Experiences. Depending how big the loan and deal is…the bank may only lend if your have experience or some sort of banking ( strong financial) for commercial deals. – But in your case, since the loan is under $500k this is not going to be a problem.

In term of deposit; LVR must be under 80%, preferred to be under 65% LVR ….UNLESS you have another security for the lender to fall back on; can even be a 2nd mortgage ( ie no need to refinance to them)
Regards
Michael

Im with Jamie on this…peace of mind + claimable.

Regards
Michael

Im with the anothers..OTP is a big no no for me…
1. Your paying today’s price…by the time it’s finish the market would be a lot different…
2. Investing 10% and not seeing the good till 1 + year later, that’s one years rental yield gone.
3. Risk of not completing/delays , price increase, construction problems etc…
4. Dont know hows the strata is like.. only a prediction- there’s a famous case of the apartment in Sydney CBD in pitt st…where after completion the strata went from $900PQ to $1400 PQ…due to unforeseen problems that was not part of the builders granuntee.,

I would only consider OTP if it’s sold below the current market by at least 10% + your have another good foundation investment properties and lastly instead of giving 10% cash/cheque…do it as a deposit bond.

Regards
Michael

No doc loan- are fading out for sure…i only know of one small lender that still offer this- but most likely wont be for long.

Low- doc- It’s still around i can guarantee you that! – however it’s slightly different and the bank do ask for different paper work + LVR is much lower, which bank…out of 42 that i deal with 15-16 of them still offer low doc to a certain level…so it depends on what your situation is like; because if one bank dont like your deal..another one will.

To date, i haven’t had any major issue with low-doc… beside low-doc refinance which is a real pain in the ass.

Regards
Michael

I dont think there’s any book that’s worth purchasing….
The big 4 banks have a information booklet that you can get fro the branch/download which explains the step in buying your first home …also our firm has one we written as well- But im sure you can get most of this information online VS buying a book…

Regards
Michael

Hi mate,

Im alwasy happy to help, many years ago someone helped me start up my online bushiness and now i do it full time with a great bunch of great passionate staff. – i believe in good Karma…so it’s my turn to help where i can

Shoot me an email or give my office a call and we can have a chat; and ill see if i can get you connected with a few people in the industry + i know how the Gov business grant process work so i might be able to help you with setting up a grant with the Gov.

Of course, this comes with no obligation or financial /personal gain what so ever- just happy to help where i can.

[email protected]
1300 74 5626

Regards
Michael