I am a new member .
A lot of aricles/books on positive cash flow property investment says that you will be only limited your equity (opposed to your income – mainly your salary) to buy positive cash flow properties.
Since positive cash flow properties give you weekly income, does it mean that
you can borrow more money from the bank than when you buy negative geared properties.As long as you can service the loan with your income , bank will lend you the money.
Is it rigth ?
So is there any limitation on how much you can borrow to buy positive cash flow properties.Say I have $400,000 as deposit. Will the bank lend me $1600,000 (1.6 million) to buy positive
cash flow properties (LVR is 80% = $1600,000/$2000,000 and high rent can cover the expenses and also interest repayments)Can someone answer this please ?
What you are saying is technically correct. But and this is something that most bankers don’t like talking about ( I use to be a banker ) Approvals over a certain amount can’t be approved via the normal paths. They are sent to a different team that looks after the bigger players – what they call high value customers. These guys play buy another set of rules and they like to see a general progression into large loans. The don’t like to give millions away to people, who to them, look as if they are reletively inexperienced in the game of property.
They like to build up relationships, or see that you have large amounts of experience.
Also when Banks loan money, generally they don’t view blocks of dewelling as a home loan, they see it as a business loan hence a new set of rules apply like the 60% LVR.
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