I am looking to borrow $40,000 for a commercial investment…
Could I still do it on a 30 year term?
– I would be keen to pay the loan off a lot earlier but this would help with initial repayments.Could this be structured as a 100+% loan?
– Have no deposit but a guaranteed return that would cover the repayments if on a 30 year term.Could the loan be structured for flexibility?
– I would like to pay as little as possible in interest and thus am looking for the best variable in regards to this point (ie: lump sum repayment, extra repayments, offsets, anything that would aid this cause).The idea is to pay the loan off between 1 and 3 years but this may only be done with the right loan and structure of loan and obviously access to other people’s money to begin this investment journey. I have gone through all the figures and it is a viable investment for my position that would allow me to leverage in the direction I’m heading.
I know there are people on this forum with extensive knowledge on finance options and thus would like to be in contact with someone in Sydney that has access to lenders that might consider such an investment option.
Any other ideas on how to structure a loan of $40,000 with no deposit and no long-term job and no other assets for a commercial property would be greatly appreciated.
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
Jacob,
You are going to have problems finding a loan like that.
Most commercial lenders want at least a 20-25% deposit or equity elsewhere. They offer terms of between 10 – 20 years.
$40 000 is a very small loan in their world and many may not even be keen to do it.
Perhaps a personal loan or even a credit card might be the way to do it….rates are higher but everything else is very flexible. If you pay it out in 2-3 years you will not pay much interest at all and no early payment penalty fees. You get a few frequent flyer points too
[biggrin]
I suggest you speak to a good commercial broker.
Cheers,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Jacob
I am with Simon on this one.
As a Commercial loan $40K is a very small loan and most lenders would struggle to even want to consider something this size.
Have you considered asking the Vendor to finance it for you.
Alternatively any family members who would be happy to utilise their security on your behalf.
Cheers Richard
Ph: (07) 3720 1888
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
No way I will be accepted for a personal loan or a credit card with that sort of limit, as I do not earn enough money.
So if I find someone willing to put up security for my loan such as equity in their home, it would be possible to get a 100+% loan for my deal?
Simon, people have only spoken highly of you in regards to brokerage matters, are you the good commercial broker I should speak to or have you got someone else in mind?
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
If you have someone who can help with equity then I would go that path. $40K really isn’t a big amount in terms of property so I suggest you have them borrow the full amount by taking a mortgage or topping up their existing one.
You will get your 30 year term, 100% finance and the ability to repay as quick as you need.
They are also then limited to a maximum of $40K if things go bad and you are bankrupt (worst case planning here) I never like guarantors as they can lose everything.
You can then have an agreement with them that you are 100% responsible for payments on the loan etc.
If you can get your valuation up to, say $50K + then you can look at refinancing into your own name or just stay as it is.
Best of all you will do this as a normal residential loan.
Hope this helps,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hey Simon,
I have sent a private message. I was going to post my response on the forum for open discussion as many heads make light work. Could you please post my list of concerns and reply or just send me the email back so I may post it (either or)? I guess it not only opens up finance issues but a few legal/accounting issues that may be a bit more complex than just obtaining finance for an investment.
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
You can always get a personal loan.
FFComm
FFComm,
Please don’t respond with a ridiculous comment like that as I have already outlined I am not eligible for a personal loan, not with a financial institution anyway.
Through discussion with Simon, it is clear to me that a valid option would be for someone with equity to take out a LOC of $40,000. Then organise a solicitor to draw up a loan agreement between myself and the other party outlining that I am paying interest to them (this way it becomes deductible for me and they should also be able to deduct their interest paid initially). Now I have the finance to purchase my investment and have the limited deductions I predicted, the party involved in helping me with finance get a deduction aswell and thus a nice little bonus for helping me out.
Now that this is the case I guess I should seek the services of a solicitor in the know how that would be able to work through this deal and organise not only the loan agreement but also the contracts in relation to the investment. Any solicitors in Sydney willing to put their hand up?
And I take it my accountant should know what to do with such an arrangement in regards to tax/investments/deductions and all that jazz. That is something that I will follow up once I have some word on finance.
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
Jacob,
The other party won’t be making a loss so they wont have any deductions?
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hey Simon,
I think I might of been getting a little carried away. But be good if that was the case though, hehehe.
So they are actually privately funding my investment, but not making money on it. I’m just using their stale equity as a mule to jump start my investing process.
Be in touch shortly to see what sort of rates you might be able to organise.
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
hi spi
log it in your diary to talk to me on the 11th sept at gladsville.here to help
Yeah all over it, if all goes to plan I’ll be there.
Just make sure you bring them Tim Tams.Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
If the deal is as sweet as it sounds then try private finance.
Sorry I can’t point you in any directs for that though.
Where there is a will there is a way!
hi all
Currently the private lenders on commercial lending are around 8.75 and banks are 8 a broker will be able to organise private lenders I use them for sydney more then conventional lending.here to help
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