Hi all,
With $100k equity how or where do I borrow 2 million lo doc in Sydney?
Regards
cashpoorHi Cashpoor,
100K deposit, 5% of 2 Million,
It will be extremely difficult to get a 95% low doc lend anywhere, not to mention the LMI & closing costs. Good Luck.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.
From the normal channels of finance (banks, etc) – Impossible;
For ‘short term finance’, possible but then your paying up to 3-4% per month, and usually they don’t go below 80% LVR anyway.Rgds.
Lucifer_auIf you are going to turn the money around quick to make a good profit and you can prove to people that it can be achived you shouldnt have to much trouble getting private investors . providing there is a good margin in it for them. If you want to borrow to hold on 4 a few years then you will stuggle to find a normal lender. There are private investors that will look into long term investment providing ther is a good profit for them at the end of the day. Cheers Rick [drummer]
What is a good profit for investors as far as in percent per year…if the project takes 3 years to finish and they invested lets say $100,000.
Hi Sansue6, it all depends on the measured risks.
The higher the measured risks, the higher your expected return and vice versa.
What are the risks of the project?
In theory, there is no difference between practice and theory, in practice, there is….
Originally posted by sansue6:What is a good profit for investors as far as in percent per year…if the project takes 3 years to finish and they invested lets say $100,000.
I know how much I WOULD want to make such an investment, but that is theoretical and somewhat irrelevant.
Let me turn the question around. Let’s assume that the development was my brain child. Knowing what YOU KNOW about this ‘investment opportunity’ (let’s call it that for now) WHAT RETURN on your investment would YOU want from ME to entice you to invest your $100k in MY project for 3 years?
Let’s keep it simple…. You give me $100k now. How much interest do I repay you (on top of your $100k) 3 years from today?
Oh, and what happens if I don’t pay you back for 3 1/2 years or 4 years maybe. (because the market has turned against us and the properties don’t/won’t sell as anticipated 3 years ago)?
Let’s say this ‘opportunity’ was a Sydney project that started 2.5 years ago and we are therefore 6 months away from putting the completed development onto the (currently) flat Sydney market. Three years ago my projections, whilst rosey were (at the time atleast) realistic. Under these conditions I’d say that my expected gains calculations might be starting to look a little suspect to say the least.
But anyway, back to the initial question. How much (on top of your $100k) do you want back from me in 3 years time to invest in my project now? And there will be no interim payments during that 3 year period either.
Over to you Sansue [biggrin]
Better Biz & Sansue6
For starter better biz I would never project bigger profits than what the current market is telling me. For example I built 5 town houses in melbourne a few years ago while prises were still rizeing , b4 I started the project I estimated the current market would pull $200,000 per town house. (total $1,000,000). My estimated cost at the time for the total of project was $800,000 this included interest witch if useing private investors you would not have to pay. Or maybe only part pay if using 50% private investor and 50% bank . Total lengh of project 2 years . The first 1st year for plans and permits the 2nd year to build. I put the deposit for the property down made the interest payment over the 1st year also paid for permits . $175,000 property(including stamps etc) $20,000 for drawing and permits. My own money in was . $32,500 deposit for house and $20,000 for drawings and permits.And $11,000 interest on the first year (total of $63,500).So far project owes me $206,500 . Second year find investors to invest with me for the remainder of project 1 year .I got prices to build $480,000. To subdivide , pay dispusements ,council bull<edited> , connections , solisitors , fences gardens etc $70,000.so I needed $550,000 + interest on the original loan for the 2nd year ($11,000 witch I would pay myself along the way) . I found an investor that would give me $550,000 but wanted $650,000 back a total of 19% approx . So total project costs after paying for everything investor, bank, builder, estate agent, etc was a total of $895,000. By the time the project was finished they sold for a total of $1,150,000. up by 150k on original figures due to growth. So concluetion Private investor made 100k profit in 1 year plus got his 550k that he invested with me. I made 255k profit in 2 years plus got my 75k that I invested . Everbodys happy. But every project is different and different risks different amounts of time will require different returns to make it worth while.
Hope this gives you an idea of what could happen when dealing with private investors.
Cheers Rick[drummer]
Hi Rick,
Thanks for the detailed account – very informative.
I wasn’t having a shot at you btw. I was simply trying to help Sansue evaluate what s/he would want as a return on their money if they were the silent investor instead of the active partner in the deal.
Based on your information such an investor would need in the vicinity of 19% per year, let’s call it 20% for ease of calculation. Over 3 years then you’d be paying them back $60,000 on top of their $100k.
Given the 3 year timeframe (that Sansue suggested) I’d be wanting a whole lot more than 19% AND I’d want the agreed rate to be a compund rate.
Why? Because investing for a 3 year period is (in my view) a helluva lot riskier than investing for one year.
Your project was well under way when you went to the private investment market for the funds to complete. This reduced the risk profile of YOUR project.
As you said, each project is different and must be assessed on its own merits.
Better Biz . I agree with you 100%
[drummer]Thanks Rick and everyone in this forum for all your input its been great help I will get back to you guys next week and fill you in on where I am as far as the project.
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