Good people,
I’ve been doing quite a bit of snooping around regarding purchasing blocks of units (not just individual units).
My current lender (members equity) tells me that if the units are all on the 1 title (not strata titled), then the best LVR they can do is 65%. But if it was strata titled, then usual 80%.
This obviously leaves me in a bind. I did the rounds of 3 major banks yesterday, & spoke to their lenders. 2 couldn’t answer my question,and at the third, they had to get the bank manager. He told me that in his case (ANZ) that figure was 70%. I NEED 80%!
Let me just say that i was amazed these people could not answer my question. Apparently other people are going to ring me to advise me of the answers. I am not yet a very big investor, in fact quite the opposite. I couldn’t believe that my level of question could not be answered spontaneously by those thus qualified.
Good people, is it the norm, that a 65-70% LVR will usually apply to a block of units if all are on the one title? If not, can you advise with what lenders i should start looking.
I was also dumbstruck that the lenders do not know what calculations are behind thier own DSR! I requested a breakdown of how they calculate their DSR and was told they did’t know, and that they just feed the info into a program, hit a button, and out pops the answer. Apparently the calculation depends an which mortgage insurer they use. For me to choose a bank based on that level of detail, is TOTALLY UNEXCEPTABLE! (there, i’ve said it!) I should NOT have to go higher than a bank branch to have these kinds of questions answered.
Cabo Wabo
I’ve just notices that on this forum board, “Meak” is also chasing down the same info…. I’d chat to my mortgage broker, but he’s out of town for a few days…damn.
Cabo Wabo
Hello
My understanding of this is that if the units are not strata and the Bank has to go into fire sale mode, it would be harder for them to find a buyer for all the units than it would be to find buyers for individual units. Also if they were to be strata, it would be easier for you to sell just what you need to please the bank
This is a really common experience. Bank staff rarely know their own products or policies. Sometimes they say ‘yes’ and then you lodge an application and then they say ‘no’. Should you expect more? Of course. Will you find a lender that always knows the answers? Unlikely. Why wouldn’t you speak with a broker? A good broker will be able to give you a number of lenders policies which will save you time and frustration.
Cheers
Stu
Thanks Stu, will do mate, will do….
Cabo Wabo
80% is certainly readily availble irrespective of how many units in the block.
Completed a reburbished block of 18 units in February of this year and we got 80% no problem.
Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
Qlds007,
Roughly, what proportion of lenders are willing to do that? Care to name a few?
Cabo Wabo
I would definitely be interested in which financials go to 80% on units.
I once went to offer acceptance on 5x2br, and build/pest inspections with a pre approval from a bank on 80% and then as soon as it went for real they’d only go 70%.
Although I understand their theory of fire sale if their % required wasn’t such a problem they’d have more investors interested anyway.
I find it really contradictory. A block of units for $500K (more rent return too) has a less chance of *all* being vacant at any one time than a $500K house.
Therefore the risk of having to have a fire sale because of cashflow problems or vacancy is much less than for a single dwelling.Come on guys, this is the big question:
Does anyone know what proportion of lenders will give a 80% LVR on a single title unit complex?
Cabo Wabo
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