Hello all, i have a property in Portland that i purchased for $51000 in 2002,it has main street frontage, 1/4 acre duall zoned and potential plus. Similar houses that are occupied are asking $150000-$180000. I have recently had an offer of $150000 for it. It is in need of some repairs, and is currently not rented, cost of repairs would be $5000 tops.
I used this as security to borrow $257000 to build here in melb, last year. I saved on some of the cost by not getting the painting, porch, driveway, done, and used the savings on other extras like high ceilings, spa, stainless app, remote garage etc.
The problem i have is,$420 per week repayments are high for my income, and i am finding it hard to get back in front having fallen behind with a couple of payments due to my previous employer going into administration.
I have been declined on credit card applications, and don;t see any way of finishing this house to sell it in a completed state, driveway etc, also the prices here are on the levelling side, so growth in equity will be slow. Current value might be around the $260000-$280000
Portland’s growth is amazing and is steeply pitched in an upward rise to no end.
What would be the best way to re-arrange my assets to once again be on the move and heading towards financial security ?
Any help advice and yes even cash offers, would be greatly appreciated and respected…..
Thanks in advance..
If your currently paying a PI loan maybe refiancing it to interest only will help your situation. In my opinion, selling would be the very last thing to consider doing.
The question is why isn’t it rented and what will it take (droping the rent or reno)to have it rented. A 6 month lease on a lower weekly rent is better than having it vacant if you don’t have the funds to do the reno at this point.Guy.[smiling]
Thanks for the reply mk2r, It’s not rented because it has no stove, sink, and needs a hot water service.
It is my ip, and this house here in melb, is my ppr,i can only make this loan interest only if i am paid up with my loan, so it makes it hard to get in front with the high re-payments.
I dont really want to sell in Portland , and can proberbly borrow the funds to do the repairs from my brother. This will put it on the rental market and reduce my payments here.
My question is, how can i position myself better to purchase another property to attain more wealth in the future, when i am having trouble meeting my committments now.
Or should i be happy with what i have got and accept my limitations.
Thanks…..
Given your situation at the moment, you should be happy to be able to hold onto what you have got, rather thinking about further growth. Take some time to consolidate now & there will always be other opportunities later.
Best of luck.[biggrin]
A thought – find outlets, stores/suppliers, who are offering say 12 months interest free terms on whitegoods and buy the HWS, sink and stove and instal them. That way you can find a tenant and start the rental money coming in.
Anna
Yes, be patient get the investments you currently have under control first – the advice offerred by the others seems a good place to start.
There will plenty of opportunities for you once you have consolidated and strengthened your current position.Anna, Good idea, but if ratherbfishin has been declined for credit, he may not be able to get this appoved.
Under the UCCC (Uniform Consumer Credit Code – for your PPOR), you can approach your lender and tell them you have a temporary problem due to your employer not paying etc. They may be able to give you breathing space by increasing your loan term, or giving you a repayment holiday.
What about just buying cheap second hand appliances just to finish the place and getting someone in renting it. Then you can buy property appliances later when back on your feet.
Terryw
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Mortgage Broker
North Sydney
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ratherBfishn, I wish I had bought in portland in 2001 or 2002.[biggrin]
.
I tend to agree with the others. There is no harm in consolidating your position right now. You may be better to sell one or both of these properties and get back into the market when you are in a better position to move forward. It would be better to have capital in the bank for a while than wait until you a forced to sit in the sideline through a bankruptcy.
.
Good Luckwhat i would like to know (yes I am back), how much is your current debt levels for both properties and what is the real market price if you were to sell them both in the condition they are in.
Byronent
Adelaide SAYou’ve got 100K of equity in the Portland property. You should be able to get a line of credit or redraw on that. If not the banks will throw a personal loan at just about anyone these days. Get the $5000 to finish the job and get it tenanted.
Once you’ve increased your cashflow you need to steady your position and consolidate.
To be honest, selling the Portland property would give you 100K profit. This could be used to give you a buffer on your home loan and kick off three to four new reno projects in the same area. This would give you a much more stable platform.
You’ve missed a couple of payments?
Repayments a bit hard now…. with more % rates on the way?
Sounds ominous. Heed the warning signals or your place will be someone else’s bargain.
Air goes in and out. Blood goes round and round. Any variation is a bad thing
Hi Ratherbfishn,
You know; I haven’t seen a post from any of the usuals to your topic and that unsedttles me a little, but… In my humble opinion and I am certainly no expert, I would hold onto a property that has already shown the extent of CG you claim in such a short tine and have a very serious chat to a very knowlegdable mortgage broker about the most effective ways to leverage the equity you now have to make the Portland property tenantable now. Hang on to it for the long term and again utilise the Capital Growth only if absolutely necessary to get yourself out of the arrears bind.
yeah right…how do you get out of debt when you have stuff all cash flow?….accumulate more debt..???? [blink]I don’t think so!
Thanks all for your replies.
I am managing my repayments well enough to avoid any chance of my ppr becoming anyone elses bargain.
I have 100% equity in the portland property,last offer was $160,000, and no i wont be selling, i have approx, $40-$50k equity in this house.I will be fixing the portland property to rental standard in about a months time, big thanks to my brother for the no interest loan [thumbsupanim] That will assist me re-pay the loan, and subsidise my re-payments here.
So glad to have not been in need of some knee re-adjustments, thanks again.
I will wait for this place to increase in value, hopefully to get equity to around $70-$80k, then take things from there.
I’m trying to figure out all this property inveting stuff, and as a newbie, will surely make mistakes along the way, that’s life.
Again many thanks to all who replied,
cheers.RBF
Congratulations…good to hear you got a positive outcome!! [biggrin]
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