I am looking for a stratagy at the moment and am really interest in vendor finance second morgages.
ie $100,000 property,
$ 80,000 I pay
$ 20,000 vendor finance paid I/O over say 5 yearsAnyone who can recommend a web site, offer any information or books on this subject I would be very grateful.
Thankyou so much
Kind RegardsPaula
hi Mukta
what do you wish to know.here to help
Paula
Which State are you in looking at doing this in?
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
Hello Grossrealisation and Richard,
Thankyou for your questions, what Im looking for is a stratagy as Im finding alot of properties seem to be $20,000 or $30,000 too much. Everything else fits fine but this seems to be a pattern, or a problem I need to solve.
I was wondering if (Im pretty sure I read this in one of Steves books) about 2nd morgages, I think there called.Im new at all the terms so please forgive me if Im alittle unclear but I will try.My simplistic understanding is that I could put down a cash deposit (small), borrow 80% from the bank and arrange vendor finance for the balance
(say for 5 years with the vendor paying interest only in the meantime)After 5 years I could sell the property, pay out the vendor, and pay out the bank.
Benefits to me is Ive had a positive cashflow property for 5 years.Im looking at doing this in Western Australia
but have no idea where to start.I hope this helps you understand what Im enquiring about.
Im looking forward to your replys
Im pretty excited about this possible structure for me.
Kind Regards
PaulaPaula
Paula, the major banks and lenders will generally bawk when they hear about vendor terms, as they usually involve a 2nd mortgage being registered by the vendor and/or a caveat.
The contract of sale by offer and acceptance, or O&A (as used in WA) details terms of purchase including deposit and other conditions. THis is normally where your vendor would state their terms. Unless a private mortgage contract is drawn up (either through a private investor or specialised mortgage manager) lenders will not accept a 2nd mortgage for the balance of 20% as it will obviously jeopardise their 1st mortgage.
However, should you consult your vendor and they agree to draw up a contract separate to the O&A (such contracts can be drawn up by solicitors at a cost), he/she may agree to your terms with only a caveat. These can be lodged after settlement and the lender will be happy to lend 80% with their first mortgage and no letter of priority putting their security at risk.
I hope this helps?
Regards,
RobRob Whyte
Certified Mortgage Consultant MIAAPrincipal & Licensee
The Mortgage Gallery
e [email protected]Winner 2004 National Office of the Year!
Accredited with over 27 lenders nationally. 15 years experience in commercial and residential lending, ask me anything, if I dont know, I’ll find out!
Hi,
I know OxygenFunding who is also on this forum specialise in 2nd mortgages ect if needed..
Roy H.
L.R.E.A., Dip FS (FP)Guardian Property Specialists (GPS) is a research-focused company that specialises in sourcing and providing residential investment properties Australia wide!
Hi Mukta
Just did a transaction like this. Got 1st mtge from major bank, vendor left in balance of 20%. Bank did’nt have a problem so long as vendor didn’t ask for “Letter of Priority”.
Shop around with brokers, if you have no luck with the bank. It amazing what’ll they’ll do if you just ask. Ask “how can we do this” not “will you”.
Brokers or even solicitors funds are other options
Hope this helps.
Megan
http://www.propertyhub.net
Your Investing, Structuring and Developing Information Hub.
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