I am interested in doing quick cosmetic rehabs in the Brisbane area within the next 6 months. I have about 150k and am looking at houses in the 300k price range close to the city. I am not an experienced real estate investor and hence I am looking for some general comments concerning the following.
1) Finance: What’s the best kind of loan considering I only want to hold the properties for 6-18months maximum?
2) Deposit: What loan to equity ratio would be best for someone such as myself considering the time-frame I wish to borrow for?
3) Return-to-Equity: What kind of returns should I be looking at considering I will be doing most of the rehabs on my own?
Question number 3 could possibly only be answered by someone who is currently doing rehabs in Brisbane in the current market, but I would appreciate some opinions regarding questions 1 and 2.
ThanksHi
You should be looking for a loan with low exit fees, and/or portability – so when you sell you can take the loan over to the new property.
probably put up at least a 20% deposit to avoid mortgage insurance. Putting up more will save you a bit in loan stamp duty, but it may be best to keep a bit spare for costs.
I have really done something similar, but i would be looking for an annual profit similar or higher than what you would be getting if you were working – otherwise you will be going backwards.
Terryw
Discover Home Loans
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