Hi All,
I am unsure about how to proceed regarding using CG on my NZ IP’s to make further NZ IP purchases.
Having done some rough calculations (not actual valuations yet) I have arrived at the figure of $45K which is the total available equity (based on rough valuations) accessed at 80% LVR.
I don’t think refinancing is an option based on the fact that I would incur charges for early loan termination plus charges for breaking the fixed interest period. Then there are additional fees for setting up any new loans. To me those collective costs are too high a price to pay.
My NZ lender has stated that he would extend a ‘business equity loan’ (BEL) (the terms, charges and interest rate of which I am not entirely happy with) but my concern here is that the BEL would then be Xcol on my current IP’s. And I know how uncomfortable Xcol makes me feel.
So my question is do any forumites have any other suggestions on how I could proceed to access the collective CG from my current IP’s for further IP purchases?
Dare I even offer the suggestion that an IFHL from D*****x may be an option!
All suggestions (legal ones) are welcome.
Cheers, Nobleone. [biggrin]
“Making mistakes is just another another tool for learning.”
Nobleone,
Why does accessing equity have to involve refinancing? Why not establish a stand-alone LOC secured by each property with sufficient equity?
There are no loan termination charges because youre not terminating the loan – youre actually establishing a new facility to access your equity.
Not sure how an IFHL would help, seeing they are currently for Australian properties only.
All the best,
Jay.
Hi Nobleone,
there are few options you could discuss with your financier.
breaking a fixed loan should not incur any charges if the current market interest rate is higher than you fixed at – the bank will be happy to break your loan because they can lend the money out to someone else at the higher rate!
refinancing does not need to alter the current loan – add a second LOC or loan against the individual property – no reason to xcol either.
sell the property and take the lot less exit costs and taxes.
that’s just three ways of getting the money that I can think of – there may well be another one…
LRCastleDreamer
NZ Investor and Property Spotterhi nobleone
which financial institution are you using? they appear very inflexable.
maybe i have a contact within that bank who i can direct you to
regards westan
I live in New Zealand, for a fee find cash positive deals there, and now 15-25% Returns in the USA email me at [email protected] to join our database
HI All,
Thanks for the replies.
I guess the simple answer is to have a chat with my broker once I have had the IP’s revalued.
Westan, all IP’s are currently financed with ANZ.
Cheers, Nobleone. [biggrin]
“Making mistakes is just another another tool for learning.”
Hi Nobleone,
the second LOC option is available with my anz lender. no cross col, no breaking the loan figures….
CheersCastleDreamer
NZ Investor and Property SpotterHi Nobleone,
Have you thought about selling one or two of these properties? The only reason I say this is that 45k is not really alot of cash/equity if it is spread out over a few homes.(you mention cross col in not preferred.) It might not be realistic or efficient to obtain small lines of credit over each home and then draw down.
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Depending on where you have invested in NZ you MAY have achieved enough equity to sell and use the capital to buy a few more.
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It’s difficult when the whole situation is not known.
.
Perhaps there may be some merit in choosing the property that has the most potential to add value to and renovate it for sale ie (only if you are around to do it yourself otherwise the labour and material cost will probably be more than the gain).
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If you have been buying rapidly over the past year or so then there may even be properties in your portfolio that have not met your expections. If so they would be the prime candidates.
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The good thing is you have plenty of options.
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Good Luck.
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