Getting the Finance to buy lots of properties

To answer your question would take a mini book by a financial adviser. However as everyones circumstances are different there is no clear cut answer to your question.

Some have established equity over years, others may buy lots of cheap regional properties etc. Using a Mortgage Broker will help you to set up the correct loan structure from the start to optimise your lending capacity.

Starting small and not getting too ahead of yourself may be the best way unless you are already a seasoned investor

Wayne
Mortgage Adviser
Email [email protected]
http://www.alphamortgagesolutions.com.au
Refinace, Loan Consolidation, Owner Occupied or Investment Finance. Free Service we come to you!

Also, if you look back, nearly all of those people did their buying during a boom, and in an area where the rent return was quite high and the purchase price was low to begin with.

I would doubt that anyone is buying 20 properties in as many months now without putting in lots of cash for deposits instead of equity. Happy to be proved wrong of course.

Cheers,
Marc.
[email protected]

“we get sent lemons; it’s up to us to make lemonade”

Dave

To avoid having the loans X collaralised you would normally set up a LOC to drawn down deposits and acquisition costs and then structure the IP loans as stand alone deals.

Many lenders will now lend 95-100% on an IP anyway which means you only need to come up with the acquisition and loan costs.

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.

HI there
LOC stands for line of credit which a lot of investors use. They draw down the required amount to pay stamp duty or other costs of purchase

Dave

A LOC will need to be secured against a property however the interest rate will vary but often around the same as a standard term loan.

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.

i thought it could be similar to something like that…

would it be an additional mortgage or charge against the property to provide the LOC, and im sorta guessing its done so you dont have to keep refinancing your loans to get more money? Also with IP would you fine you would very rarely re finance your property completly? i know its a 7 year average for all loans, but if you used LOC would it be longer as you would on re finance if the lender was un compedative with the market place??

could you have more than one property secured against the LOC, or would you just have 2 LOC in this circumstance? Also say you borrow 95% on your property, would you have to wait for the capital value to rise to a LVR ratio of below 80% before you could use a LOC?

Cheers Guys

LOC’s are like split loans and each loan is secured against the mortgage property and are all added together to work out the LVR maximum amount allowed by the bank for the whole combined borrowings versus the actual value of the property secured .
Some banks charge a fee for each LOC you set up and charge it to the LOC account plus interest.
The other problem you would face is what the bank actually markets the LOC as. Each bank will call it a different product name.
For example St George call it a portfolio loan.
Another thing to be wary of is LMI (Loan mortgage insurance) and how it will apply if the LVR increases > 80%. What amount is the LMI charged on ?
It won’t be on the LOC amount but more likely the whole borrowed amount.
You could be charged an establishment fee for the LOC also.

Duckster Financial Services
http://www.ducksterfinancial.com
Helping to make the great Australian Dream come true !

Comments are of a general nature and may not be relevant to your individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

David

Not really. You would be paying IO on the LOC so you could easily apportion the interest between different properties. eg. if you take $20,000 5 times for 5 different properties then each is attributed 20% of the interest at tax time.

In the end if you don’t mix personal stuff in there you will be able to claim the lot, so getting it wrong between the properties will make no overall difference.

Terryw
Discover Home Loans
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