Hi kiwi investors,
after a long time researching the market, we are about to make our first purchase in invercargill NZ. We are currently under the process of getting a valuation on a commercial property, but I was just told some bad news, that the bank will take the LOWER of either the valuation or purchase price and finace 60 to 65%. If this is the case, then negotiating down the purchase price to below the valuation would not leave equity in the deal. How then do you buy properties (commercial) with equity in them so that the down payment is reduced??????We buy properties in all conditions. Can offer Immediate Cash Settlements, No Real Estate Agents Required
[email protected]
phone 0412 437 582I am confused. You say “We buy properties in all conditions. Can offer Immediate Cash Settlements, No Real Estate Agents Required” but you are having touble with valuations and finance.
A property is only as valuable as what the next person is willing to pay. Excluding ‘advantageous purchases’, the price you negotiate for a property is pretty much what it is worth. Most valuers are of the opinion that if it was worth more, someone would have paid more for it.
Regarding the heading of this thread, ‘available equity’ comes from a property you already own. You do not have any available equity in a property you are buying.
Do you not have another property you can use to help with the deposit and closing costs?
Robert Bou-Hamdan
Mortgage AdviserIf you can actually pay cash for a property, you could then apply for finance and get it based on the value of the property. But if you are purchasing, lenders will nearly always take the lessor of valuation or contract price.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | 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
hi there,
some banks in NZ will allow you to immediately refinance after settlement to the allowed LVR against the registered valuation.
for example
block of flats: contract of 175K, valuation of 210K, bank will lend and settle on 175K figures. bank will then refinance later on the 210K figure. the time between settlement and refinance will vary between banks.
CheersCastleDreamer
NZ Investor
http://www.nzpropertytogo.comCastle, Aussie lenders will calculate LMI premiums on the val in your example. Do they do this in NZ?
Robert Bou-Hamdan
Mortgage AdviserHi Mortgage Advisor…
the bank will do its lending to you on the lower of the two figures as we know. Unless you are a resident investor (therefore leaving us Aussies out of it) you will only get an 80% lend max (generalisation here as I have heard rumours that some banks will now consider 90% lends to Aussies – but applications are underway not approved yet!!). Like Australia customers with an 80% lend don’t pay LMI, so to answer your question, I have no idea!!! as I have never had to pay LMI as never loaned greater than 80% LVR!!!
Cheers
CD
Castledreamer
nzpropertytogo.comI would guess it is the same seeing NZ is just another State of Australia!!!
Robert Bou-Hamdan
Mortgage Adviserbanks lend on risk. They consider that commercial property is a greater risk than residential. They will also look at the location. Personally I would only look at commercial as either part of a syndicate or if I could afford a blue chip investment. You will find that the entry point for a blue chip commercial product is far higher than residential
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Buyers advocate
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When you say “entry point is far higher”, are you suggesting you can borrow MORE for a blue chip commercial property or LESS than for a residential property?
Robert Bou-Hamdan
Mortgage AdviserIn my view if you are going to invest in commercial property then you should only buy blue chip. The price of a blue chip investment is normally a lot higher than a residential property. So for many people a blue chip commercial invest may be to expensive.
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Buyers advocate
service and seminarsNigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Ok. You were referring to price. I thought ‘Middle Earth’ had revolutionised their risk weightings for commercial and residential properties for a second there.
Robert Bou-Hamdan
Mortgage Advisernkibel,
What do you consider a “blue chip” investment property? Elsewhere you said Docklands would be a blue-chip investment proposition in 10 years… so I am wondering what your criteria is that makes it so.
What kind of seminars do you run, nkibel?
kay henry
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