Pros:

1. Good cashflow and net yields

Cons:

1. Low LVRs

2. Limited CG

3. Finance is hard to get depending on a number of things such as whether or not the lender has already financed up to 25% of the units in the complex, whether or not it can be O/O, etc.

4. Resale is hard for the reasons above and your market is very limited

5. Valuation – I had one customer you had a fire sale in the complex and it caused the value of his unit to be significantly lower that what it was "supposed' to be worth.

Regards

Shahin

If your property is 1100sqm why on earth are you doing a GF and not a dual/triple occupancy?

Regards

Shahin

Ok so draw upon the equity against your apartment at say 90% – the LMI will not be huge and try and keep the LVR of the new purchase to under 90%. I would not recommend you going to 95% on the new loan.

Regards

Shahin

Ok I will respond in point format:

1. First thing to do is change your existing mortgage to Interest Only and have a linked Offset if you haven't done so already.

2.. Second thing to do is order an upfront valuation to determine the exact value of your apartment – it may be more or it may be less. Either way is crucial as it will tell you how much equity you have to play with. Its free and some lenders offer this.

3. At an 80% lend you have $48k in equity (assuming your property is valued at $360k and your loan is $240k).

4. If you add your partner onto the title you/they will need to pay stamp duty. Why are you doing this?

5. Bankwest is one of the worst lenders for a number of reasons.

Can you answer the question to point 4 and also can you advise whats your budget for the next purchase (and which State)?

Regards

Shahin

Ok. St George have a neat option whereby you can split the portfolio loan. 

Having an enquiry on your credit file is not a bad thing per se – it becomes an issue when there are multiple hits in a short period of time (short period could be up to 12 months.) 

I had an interesting one last week where an application was declined even though the applicants where strong applicants however in the last 12 months they had numerous credit enquiries. We got the exception and got the application approved because the applicants had purchased so many properties in the last 12 months.

Regards

Shahin

What are you specifically trying to gain knowlegde in? 

The forum is a good mentor and will save you plenty of dough.

Regards

Shahin

The lender will classify you as self employed as you are the director of the company. 

What is the issue exactly with being self employed vs PAYG? Are you not able to provide adequate documentation or is there an issue with servicing?

Regards

Shahin

You cannot determine tax benefits without knowing your income. Based on the above figures you would be looking at approx $130 per week negatively geared on a rental of $280 per week and $110 per week negatively geared on a rental of $300 per week. This doesn't take into consideration negative gearing benefits or any possible depreciation benefits. 

If this is purely a cashflow play then its not a particuarly good one. Lots of better cashflow plays out there.

Regards

Shahin

The total cost which means the purchase price as well as all the upfront costs such as stamp duty, legals, LMI (if applicable). This will give you a true reflection of the ongoing net operating costs.

Regards

Shahin

There is a reason why the services of certain professionals (any professional) is cheap.

Regards

Shahin