Folks, in the spirit of this board, and trying to steer it back on course, thought I’d start a new topic here for us to discuss how we’ve all managed to come up with the (usually 20%) deposit to buy a property.
OBVIOUS :
– Savings ( what are they []???? )
– Equity in existing property
– MUM/DAD/insert relative/friends name here ! []
NOT SO EASY
– Private funds / lenders
– 100% finance [xx(]
What have most of you done ?
I’m just interested as we have gone through a lot of these, and are now out there looking at private funding… It seems the way you make the approach for funds is quite critical, coz as soon as you say ” I want funding for wraps ” there is a bolt for the door by the lender []
Folks, can I hear what you guys did ? ( Please no fights here…. just your experiences )
Hi
The first deposit was from equity from our existing property but for the last 4 purchases we buy, renovate, revalue and refinance to get our next deposit. Before we buy we enlist the help of a valuer who gives us an oncomp valuation then we work backwards to the purchase price.
eg. property refinance valuation 240,000 reno 25000 then we would only pay max $170000 for the property.
Has worked well so far.
Erika
Our first IP has only just settled. We took the deposit and all costs out of the LOC from our PPOR which we had paid off.
We will do the same thing for the next property.
I like your idea, Erika.
Having used a few different methods to buy, eg. getting a loan outright, borrowing all and cross collateralising, using deposit out of equity L/C, we’re sticking with the L/C, as funds are available immediately to purchase, renovate if you’re doing that and then refinance the improved property. Want all the properties to stand alone.
It’s been a lot of learning and is going well.
We did borrow a deposit from family a couple of years ago, renovated and refinanced and paid back the deposit. Years ago, we also managed to get a personal loan for a deposit, and we have also used a deposit bond.
Anna
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