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  • Profile photo of ninnynanninnynan
    Member
    @ninnynan
    Join Date: 2008
    Post Count: 1

    Hi All, new to this forum, but hoping someone may be able to give me some advice, story is as follows:

    Looking at purchasing a 1.6hectare property within 10km of a large regional centre with a number of development s(new estates) opening up.  Property has a heritage listed gothic sandstone chapel (in good repair) and a church hall, council is favourable to expansion of the hall and also erection of a home/managers residence on site as long as either of these developments do not detract from the character of the existing structures.  Property is being sold as a rural, but with the property comes a business  – weddings, christenings, funerals, after service functions, and also complete wedding receptions in hall or marquee.  I am a wedding decorator so know the industry quite well.  There is $30k of confirmed bookings already for the coming year and a substantial marketing programme is in place. To put it mildly, – I'm excited!!

    Property is selling for $500K – problem – we have 2 investment properties and our ppor – but not enough equity to raise the 20% required, we are planning on selling one of our properties which would give us about 15% cash.  Am considering equity partners, but don't know how to go about finding them.

    Present owners have agreed to a 10 week settlement if we pay $10k now – should I just go ahead ??  there is another party interested in the property who is in the process of trying to finance – don't want to miss this opportunity.

    Advice please!!!

    Nolapola

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Nolapola

    Dont want to be the bearing of bad news but i dont think you will find either of the 2 main mortgage insurers touch the property and therefore feel you will be limited to an 80% lend max.

    Other consideration is the actual value of the security. If there is an element of business associated with the property you may find that the Banks valuation and yours are not the same.

    Have you considered seeing of the vendor will leave some funds in the deal by way of a 2nd mortgage ?

    Assuming all is ok on the valuation front even if this was merely for 10% of the purchase price it would see you through to settlement.

    Richard Taylor | Australia's leading private lender

    Profile photo of MortgagePlusMortgagePlus
    Member
    @mortgageplus
    Join Date: 2008
    Post Count: 83

    Nolapola,

    It sounds like a pretty specialised security, but not out of the question to get the finance approval on. Firstly, as an income producing Rural property, you can absolutely forger any normal residential mortgage.
    What you are looking for is a specialised financial facility based on not only the security itself, but probably the cash flow position of the ongoing business too.
    This will require a combination type of facility for the LVR you are trying to achieve. 1st/2nd combo or similar, depending on where the security is and the other specifice of the transaction.

    If you would like some additional info, feel free to email me at the address below and I will be happy to help.

    Profile photo of atevansatevans
    Participant
    @atevans
    Join Date: 2008
    Post Count: 17

    Try Rural Home Loans.  They found me a 95% LVR loan on a Rural Property through one of the big banks at a reasonable interest rate.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    The rural zoning is not the issue the problem lies with the security being a business and not true residential.

    Richard Taylor | Australia's leading private lender

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