hello
having been overseas where I sold a small company, ive returned to australia and snared the first property, a block of 2 flats at the sunshine coast (260k). after 10-15k of work, it will be cash +, but wed mainly be looking to knock it down and redevelop more flats in a few years.
i am very keen to acquire subsequent properties asap. my landscaper mates and I will research about, hawk low offers around, add value then sell for CG.
given that I have 130k cash to hand and almost bugger all income for now, what is the best way of financing initial deal to set up for revolving door subsequent deals?
ie should I get line of credit straight off the bat, park all capital in it and draw against it for deposits and improvement costs repeatedly?should I take separate mortgages with extra cash. can I get second mortgages?
any ideas? pretty simple issue but had pros and cons. thanks heaps
geHi EW,
I would look at financing the initial deal using as little of your $130K as possible, prime lending will get you anywhere between 90% to 100% LVR, with subprime lending generally around 80% LVR,
Once the Reno is completed you could then access the increase in equity via a LOC etc for future deposits/closing costs on separate loans,
In the meantime, if you have non-deductible debt, consider offsetting this with the balance remaining from the $130K.Regards
Steven
Mortgage Broker
Mobile Mortgage Market[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
gday steve
looks like ill just squeeze into a doc LOC with ANZ or NAB at about 6.5 20%LVR putting down 50k plus closings plus 15 reno costs totalling around 75k (leaving 65k spare)one month later well show the receipts and revalue from 257k to perhaps 300k(say).
does this mean I could add 33k to my bottom line on my LOC, totalling 65k + 33k. then I could actually start using the LOC as its stagnant if sitting on 20% equity (50k).
Is there really any point in extending the LOC after revaluation? What does it prove? I wont have any non-deductible debts as Ill be living in a flat owned by my trust as the tenant.
Thanks again for answering Steve.
gei meant 55 k spare 130-75=55.cheers
Hi GE,
If you extend the LOC after the reno you will have access to the extra estimated $33K in equity, this may come in handy for future deposits etc,Regards
Steven
Mortgage Broker
Mobile Mortgage Market[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
And don’t forget you will have to list an income with the low doc loans. They may also want to talk to your accountant to confirm.
Terryw
Discover Home Loans
Mortgage Broker
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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