From what i understand it’s only worth while to take out a SMSF if you have $150,000- $200,000 + else the fee’s involved would eat up any gains; Unless you have a strategy where you can make constant 10% yield.

Google a bit more details on SMSF and see whats involved + what the fee’s are.

http://www.colonialfirststate.com.au/prospects/FS2358.pdf

Regards
Michael

No you dont! plenty of banks will take in consideration deductibility of interest and add back depreciation..

Regards
Michael

Ferdinand- i did quick calculation – yup your fine with serviceability** at 10k CC – Lowering your cc limit is a good thing in general but also may not the the best thing if your JUST abt to apply for a loan- The lender will ask for 3 month CC statements…and if they see different limits JUST before you apply for a loan it may not be to your advantage so carefully planning is required and applying to the right lender is a must.

No LMI with 15% genuine saving and 1 year with current employer is fine ( 85% LVR)

Regards
Michael

** Based on:
– Above information given
– No dependent?
– Solo application ( 1 Adult)
– NO another expense, beside standard living expense
-FHO
– NO another liability
-No hecs

You can claim the interest for repairs, maintenance and improvements as long as the home was rented out for a “period of time” and remains as your IP.

** im guessing your getting confused about claiming for the cost of the job itself..ie If you JUST bought the place and it was never rented out and you do the above job then you wont be able to claim the tax deduction but you can depreciate the cost over time once it becomes an IP>

Regards
Michael

The first home saver account is only good if your confident your going to buy a place within 4 years…ie dont do it if your still at uni.- only consider once your in a relatively safe job for at-least 1 year…

Any amount in the first home saver account will go to your super IF:
1. you dont buy within 4 years
2. You cancel

Richard is right, Ubank and Dragon are pretty good and owned by the above banks….i think ubank is currently 6.3%???

Skyes- you could buy the place to live in and renovate while your living there ( much easier to organize and do renovation if your living there) then convert to IP …the renovation can not be claimed but can be depreciated each year.

Regards
Michael

Cashbond – pretty much a standard Bond…but there are many different types.-

Learnings- Yes cashbond are fine…but it depends which type of cashbond you hold and is it an Australian cashbond ?
Just a few points;

1. ” upto 20k private finance “?? so are you getting a loan for a private fund for the subdivision??? – why dont you just borrow it from the bank your wanting to apply this 2nd IP

2. Your situation sounds a bit complex to solve correctly over a forum- you have a lot of “variables” and “unknown” happening.

3. Your back up plan will only work if this is an ACTIVE ABN for 2 years + you have a accountants letter as declaration ( highly unlikely any accountant will supply this letter) OR an Business active statement from the ATO ( unlikely) OR 6 month trading statements ( Unlikely)

I guess what im trying to get at is …your best to go for a full doc PAYG application because on your bank statements the lender will see regular “income” from your work and this will cause alarm bells…*ding ding ding * game over buddy.

4. GF – no chance for serviceability guarantor…can only be a co-borrower.

5. ” duck and weave between lenders to get it accepted. ” – Your playing a dangerous game, a lot of lenders will automatically shut you out if the purpose is for construction.

My advice as an broker- be upfront…yes we can be creative in the way we structure your loan, choose your lender, choose the product..but at the end of the day if you have to resort of serviceability guarantor, Private funds, cashbond and Low-doc self employed JUST to get this loan over the line….is it really worth it???

So i say, sit down with your broker and accountant and work something out- you never know it’s probably not as bad as you think.
I clearly remember a client who came to us 15 month ago and requested a private non-conforming lender outright ( rate of 14% !!!!) because she thought her situation was to complex for the banks and she was close to settlement.. We end up placing the loan to CBA and it was approved within 2 weeks.

You never know if you never ask. Guessing and presuming is a dangerous game and can cost your thousands.

Regards
Michael

NSW- i’ll keep this post short- since you probably have plenty of information to process already ( 33 post wow!)

– Bankwest Prem home Loan is a good completive product and for your needs PPOR- > IP it’s perfect
– They are slow for self employed loans i find…for a straight 80% LVR, PAYG you wont have a lot of problems.
– There pre-approval is useless…make sure it goes to unconditional approval – so get all the Docs to your broker quickly

Lastly welcome to the world of property investing

Regards
Michael

Hi, welcome to the exciting world of development!

You got two options:

1. Subdivide first

2. Build first then subdivide

* You would have only ONE title- so only ONE lender securing property + the construction cost
* This option provides less flexibility ( explained below)
* Apply for a new loan ( some banks allow a split loan into your existing) ; the new loan would be a construction loan.

I would say option 1, is a far more superior option in term of protection, since im guessing this is your first development project. Reason i say that is; option 1 allows you to change lenders and find new competitive rate for EACH land ( so if you had problem with your current lender you can simple change it over) . Lastly if you gotten your self into some unforeseen financial problem; you can simply place one of the construction on hold or simply sell one of the land off to offset any short falls.

Regards
Michael

Hi,

I’m slightly confused…are we talking about a standard credit card here? or some sort of LOC ( line of credit?)
From your post it sounds like your not your friend is not an Australian, am i right? sounds like a US loan….

Regards
Michael

Send Richard the email, the residex reports are sometimes quite useful.

My top tip would be to speak to shop owners and the neighbours- as local knowledge is very important.
Drop by the local coffee shop and have a chat with the shop owner – Free and no harm done.

Regards
Michael