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  • Profile photo of strawberrystrawberry
    Member
    @strawberry
    Join Date: 2005
    Post Count: 12
    February 10, 2007 - 6:04 am

    I am considering (at the very early stages) of investing in a block of 4 apartments that aren’t strata titled (currently on a single title). I would most likely be looking at going in with a partner to share costs – and the aim would be to take 2 apartments each and develop the block into 2 homes (either for investment or principal residences).

    What is the best strategy to take, regarding the initial loan requirements (ie: splitting between 2 partners), and in what form and sequence should we approach separating the titles (ie: strata, company, etc)? Any other advice would be greatly appreciated.

    Thanks in advance.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    February 10, 2007 - 6:23 am

    Strawberry

    A block of 4 units maybe considered as a residential loan by a few lenders however you would not get mortgage insurance on such a property so will limited to a 80% lend.

    One consideration would be to buy the property in a Unit Trust arrangement with each unit holder owning 2 of the units once the property has been strata titled. This way you would be able to avoid the additional stamp duty payable if you transferred the units from the buying entity to your individual name or Company.

    Financing wise as mentioned you would need at least 20% deposit and may also need renovation costs and strata titling costs.
    If the loan was done on an end GR basis then the rate would be slightly higher. Doing it this way you always refinance and take the individual loans upto 90/95% once the work was completed.

    Cheers

    Richard Taylor
    Residential & Commercial Finance Broker.
    Licensed Financial Planner. Ph: 07 3720 1888
    [email protected]
    Looking for life cover – We Guarantee to beat any quote you have in writing.

    Richard Taylor | Australia's leading private lender

    Profile photo of strawberrystrawberry
    Member
    @strawberry
    Join Date: 2005
    Post Count: 12
    February 10, 2007 - 6:56 am

    Thanks Richard ..
    So the unit trust (once set up) applies for the finance? Or do both partners apply for separate finance for their share in the property?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    February 10, 2007 - 7:20 am

    As the property has the one title the loan application will have to be in the name of the Unit Trust rather than the individuals.

    Cheers

    Richard Taylor
    Residential & Commercial Finance Broker.
    Licensed Financial Planner. Ph: 07 3720 1888
    [email protected]
    Looking for life cover – We Guarantee to beat any quote you have in writing.

    Richard Taylor | Australia's leading private lender

Viewing 4 posts - 1 through 4 (of 4 total)

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