[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

February 8, 2004 - 9:30 am

If you are using a low doc it could be difficult. However, if you are using a full doc loan and only want 80% then you should be ok. For example, I know CBA will do 80% just about anywhere. I’m sure Mortgage Hunter will be able to help you.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

February 7, 2004 - 4:44 am

Good call Pisces!

There are some ordinary brokers/people out there that will encourage borrowers to do some wild things(particularly abuse low doc loans). People – DON’T LET YOUR THIRST FOR WEALTH AND PROPERTY GET IN THE WAY OF YOU ETHICS. Make sure you never lie or deceive a lender.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

February 7, 2004 - 4:33 am

A lender called IMB will take 90% of rental income. They will also take external debt (i.e. debt with other lenders) at repayment amount. Most other lenders gross it up at a higher breanchmark rate. They are a good lender for borrowing capacity for investors.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

February 6, 2004 - 9:36 am

St George offers low fixed rates. 6.95 for 3 or 5 years. See http://www.stgeorge.com.au/loans/home/default.asp?orc=personal

Sapphire Mortgages also offer low fixed rates. 6.89% for 3 years. See http://www.sapphiremortgageservices.com.au/

They are the best fixed rates that I know of. Hope that helps.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

February 6, 2004 - 9:30 am

I guess you don’t have to split them up (as long as you can prove that the interest is deductible – i.e. it relates to investment properties).

I you advise you to keep them separate to make it easier if you ever sell any properties (also affects you loan flexibility – I address this in my net article in API – out mid March).

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

February 5, 2004 - 5:08 am

Hi Lea

I’m a bit confused.

You say “his income + rentals no longer services the full debt“.

Don’t you have a legal and ethical responsibility to ensure your client can afford the debt before helping him?

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 30, 2004 - 6:11 am

Yes, good idea to get the $40k working for you. Perhaps a LOC may not be the right product. See http://www.prosolution.com.au/ps_docs/prosolution_doc121503_141401.pdf (the article is 1MB is size so may take a while to open)

In addition, I have another article about loan structuring being published in Feb/Mar issue of API magazine which may also be of interest.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 28, 2004 - 3:46 am

I would imagine that it’s very unlikely that this will ever get up. If the ATO loses the appeal than I would think the government would legislate against this to close the loop hole – they have too much to loose.

All we can do is wait and see.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 27, 2004 - 4:12 am

That’s fine Dom. Not passing judgement. Just simply pointing out the risks. Good luck.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 23, 2004 - 7:11 am

You have approx. $500k of debt now and you want to increase to approx. $750k which may be fine but you want to make sure you’re not over extending yourself. You’ll sart to get very rent reliant and you just need to consider the risk of vacancy and interest rate increases. Be careful.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 23, 2004 - 6:53 am

So end value is 2 * $650k = $1.30 million

And you need to borrow $20k + 2 * $250k = $520k. Is that correct. (I assume you have no exist loans against this property as you said “no finance required”)

Serviceability may be an issue.

I think its a pretty strong deal and you should have not problems so yes the properties title should be sufficient.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 22, 2004 - 1:48 am

Picja1

This sounds like providing financial advice. Are you licensed (or are you an authorised representative of a license holder)?

Are there any risks associated with using your superannuation to invest in this manner?

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 21, 2004 - 6:18 am

Oops – didn’t read post very well. Looks like you’re borrowing over 80%. Therefore I don’t think you’ve have much luck.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 21, 2004 - 6:17 am

How much are you borrowing (i.e. LVR)?

If you’re borrowing over 80% and need mortgage insurance then you’ve got no chance.

However, if you’re borrowing under 80% then try CBA and/or RAMS. NAB has also done small properties in the past but their policies change almost hourly.

Good luck.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 15, 2004 - 3:52 am

Hi Tracey

The HECS debt will actually reduce your net pay as your employer will be required to deduct HECS monies each pay. This will affect your serviceability and therefore borrowing capacity.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 15, 2004 - 1:37 am

Looking at the numbers:

End value = $170k * 7 = $1,190k

Cost to complete = $100k + $950K = $1,050

Potential profit = $140k (but this excludes financing costs, etc. so its probably a lot lower)

Given the risks (construction, selling, etc.) is it really worth doing this development (especially since you’ve forgone some of your profit already by sell 2 at cost)?

1. I wouldn’t do it. There’s not much upside and there’s a lot of downside.
2. You will find it very difficult to finance (because it’s a very weak deal).

Sorry for the bad news.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 13, 2004 - 12:50 am

Correct Terry.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 13, 2004 - 12:49 am

Sure its possible but the new loan will not be tax deductible because the purpose of the debt is to repay “non-deductible” debt.

It similar to borrowing against your investment property to buy a boat or a car. The purpose is to purchase “personal use assets” and therefore no allowable deduction.

But good thinking… []

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 13, 2004 - 12:43 am

I certainly wasn’t jumping up and down about Orix – just merely mentioning them as a lender that I know of that lends 80% against commercial property. I’m sure there are others as well.

Anyone that lends 80% is going to charge a high interest rate.

Cheers

Stu

[Stuart WemyssMember@stuart-wemyssJoin Date: 2003Post Count: 598]

January 12, 2004 - 8:02 am

There are some lenders that offer longer commercial terms. For example, IMB offers a commercial loan with a maximum term of 20 years which can be helpful.

There’s a lender called Orix that will lend 80% on non-specialised commercial property (on a P&I basis).

I wrote an article about commercial finance for API magazine. I’m happy to email it to people if they are interested.

Cheers

Stu