All Topics / Help Needed! / Disheartened

Viewing 13 posts - 1 through 13 (of 13 total)
  • Profile photo of KT2303KT2303
    Member
    @kt2303
    Join Date: 2005
    Post Count: 2

    After searching the papers and the internet I have found 3 properties that would be top investments. But because i have no deposit I cant secure any finance. Two of these properties are selling for 75% of their market value and the third has a guaranteed tennant for 5yrs at a break even rental price – before value adding. How is it possible to secure a 100% loan????? Please help me as I dont want to be left behind so to speak. Advice from seasoned investors would be an asset as much as the properties.

    Profile photo of hbhb
    Member
    @hb
    Join Date: 2005
    Post Count: 179

    hi kt2303
    just a quick question,
    how do you know its selling for 75% of its market value?
    would anyone on these forums sell their property for 75% of its value?
    i don’t think so
    what’s something worth?
    whatever anyone is prepared to pay
    and secondly, don’t you own any property that you can use as equity to scrap together a loan?

    harry

    Profile photo of DazzlingDazzling
    Member
    @dazzling
    Join Date: 2005
    Post Count: 1,150

    Hi KT,

    To secure 100% loan you need to stump up some equity.

    If you don’t have any equity, you need to stump up a deposit.

    You have to give the Lender something to lean on. I’m sure you wouldn’t lend your money to someone who showed you they had nothing behind them…it wouldn’t give you a warm fuzzy feeling.

    Why not knuckle down and save for a deposit ?? More to the point, why don’t you have a deposit ??

    Profile photo of Brady5Brady5
    Participant
    @brady5
    Join Date: 2005
    Post Count: 21

    HB and Dazzling, with the greatest of respect you are are NOT reading the Question!!

    If KT had the deposit, this post would not have been written. Here is a person who has found a GREAT opportunity to advance financially and is being held back by lack of deposit. Dont knock the fact the deposit is not there , find a solution to the problem.

    I was in exactly the same position some time ago and this is what I did, which by the way was sucessful!!

    Assume for simplicity an investment property valued and available for sale at $100,000.

    An LVR requires a 20% deposit (which in this case is NOT avail). FIND IT FROM ELSEWHERE eg approach another lender for an unsecured loan at a higher interest rate.

    Once obtained, place this deposit to assist in the purcasing of the other 80% plus closing costs. Provided the rental returns and the automatic equity in the proprty upon purchase stacks up, and the deal is at LEAST neutral, all parties are happy and you are your way.

    Is this IDEAL. Mo. But you now have in your possesion a piece of valuable real estate, 75% below valuation and paying for itself.

    Good luck

    Profile photo of Alistair PerryAlistair Perry
    Participant
    @aperry
    Join Date: 2004
    Post Count: 891

    There are actually some very good 100% loans around. You can even go higher to 106%, although interest rates for these loans are much higher.

    Regards
    Alistair

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544
    Profile photo of DazzlingDazzling
    Member
    @dazzling
    Join Date: 2005
    Post Count: 1,150
    HB and Dazzling, with the greatest of respect you are are NOT reading the Question!!

    If KT had the deposit, this post would not have been written. Here is a person who has found a GREAT opportunity to advance financially and is being held back by lack of deposit. Dont knock the fact the deposit is not there , find a solution to the problem.

    With the greatest of respect, I believe I did read the question thoroughly and did answer to the best of my ability.

    KT mentioned they had no deposit. They mentioned nothing about equity.

    It’s either stump up equity or stump up a deposit. Your proferred solution was to stump up a deposit, via a 3rd party.

    You did not offer a third alternative.

    I’d also be wary of concluding that KT has found a GREAT opportunity. You know little to nothing of the details of the deal. I believe Harry has rightly put a few valid points to question / test the underlying assumptions of the deal. It doesn’t sound too GREAT to me.

    Profile photo of cadill69cadill69
    Participant
    @cadill69
    Join Date: 2005
    Post Count: 5
    Originally posted by KT2303:

    After searching the papers and the internet I have found 3 properties that would be top investments. But because i have no deposit I cant secure any finance. Two of these properties are selling for 75% of their market value and the third has a guaranteed tennant for 5yrs at a break even rental price – before value adding. How is it possible to secure a 100% loan????? Please help me as I dont want to be left behind so to speak. Advice from seasoned investors would be an asset as much as the properties.

    Hi KT

    As mentioned there some very good products around particularly if you have a good income. St George (Aus) has one lending at 106%. It is also well worth going to a reputable mortgage broker as they can play games with credit cards/personal loans for deposit etc. The lenders are very keen at the moment and the market is quiet so have no fear of missing the boat. I started with no deposits and now have many properties. The desire and courage to go ahead is more important than a deposit IMHO.

    Good Luck and be sure to find a property where you can add value quickly.. (happy painting!)

    Cad

    Profile photo of KT2303KT2303
    Member
    @kt2303
    Join Date: 2005
    Post Count: 2

    Unfortunately I do not have a property I can borrow against and as Brady5 mentioned if I had a deposit this would not have been posted. The properties are ex government that have been fully refurbished and will sell for approx. 60-70k other privately owned examples sell for between 100 and 120k (hence 75%). I have heard of many people securing finance for up to 110% so why do I need a deposit. I could quite possibly ‘flip’ the said propeties at a substantial profit, but I wish to value add and ‘buy and hold’ as I may live in one of them myself.

    Profile photo of Luke TaylorLuke Taylor
    Participant
    @world-changer
    Join Date: 2005
    Post Count: 415

    Hey Kt2303,
    Dont be dis heartened,good on you for going for it!
    You could put an add in the paper for a money partner.
    Or You could save up a bit for a deposit(you may appreciate it more then)(no disrespect meant)
    If you pull back a bit there will be more deals come around.
    I am learning not to be anxious for a deal now as it clouds my judgement.

    Dematio

    We’ve got 70 yrs on planet earth,Lets make the most of every day!

    Luke Taylor | Hope Property Investing
    http://hopepropertyinvesting.com
    Email Me

    Property Support,Strategist and Buyers Agent

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi KT,
    Brady has provided a suggestion that might work but there may be other sticking points. One I’ve read about is that a lender might give you a Personal Loan for a holiday, or a carport, but not as a deposit on a property. Still it seems it can be done. But then you need to approach another lender and now you have a personal loan that could muck up the DSR.

    I suppose I’m saying “go for it if you think it’s worthwhile, but be prepared for a few more bumps in the road.” If you’re prepared to put head down and the other up, you’ll make it happen.

    Someone else here mentioned 100+% loans – might be a better way, though this will probably have a few road bumps of its own. Be prepared for this so that it doesn’t “get you down” and have you wanting to give up too soon. You’ll make it work if you want it badly enough.

    Good luck, and let us know how you go

    Benny

    Profile photo of MaiAMaiA
    Member
    @maia
    Join Date: 2005
    Post Count: 42

    Hey there
    YOu mentioned that you may live in one of the properties…..is FHOG an option for you then? You can purchase and then you have 12mths to move in. Its quite permissible to rent it out until you move in.
    Just a thought
    Good luck

    Profile photo of DocbueDocbue
    Member
    @docbue
    Join Date: 2005
    Post Count: 6

    KT2303 & Cadilla69

    Cad had some great advise. 106% is very possible. Gets you into the market. May cost you mortgage insurance but if the deal is as good as you feel you will already be in front. Check your numbers to make sure you can at least make interest payments and the underlying costs and get on the road to success. All the best, Doc

Viewing 13 posts - 1 through 13 (of 13 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.