All Topics / General Property / Any Suggestions

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  • Profile photo of RenovataRenovata
    Member
    @renovata
    Join Date: 2009
    Post Count: 11
    January 28, 2009 - 7:17 am

    Hi Guys,

    I'll try keep this as short as possible. I'm just looking to get any suggetstions on where I should go from my current situiation.
    12 months ago i was given an amazing opportunity (early inheritance). My parents owned the property we were renting and aggreed to sell it to me for 200k less than market value (500k)!!! The house was in very bad shape due to the previous renters and badly in need of a reno. I am a qualified builder with my DB-U license so we transfered the house into my name and borrowed the money for the reno against the value of the property. This kept repayments low while I spent more time on the house than earning money from other jobs. i had 12 months to complete the renos before I had to pay out the olds. The property was originally valued at 500k (even though we will only owe 300k of that)we have spent about 200k and although not quite finished (about 20k to go) the place is amazing and my wife would like to stay.
    We never planned to stay forever but my problem is… if the market had stayed strong I would have expected about 800k give or take, and selling would have been an attractive option. Unfortunately after some research I think it is only worth about 700k,ish. (spewin)
    Although we have not made the profits I had hoped (yet) we do still have a home with 200k equity. I know I have been given a fantastic opportunity and I want to make sure that I use it to set up my families future.  I need to pay out the olds in the next couple of months.

    There seems to be some pretty well infored people on this site, and any suggestions/ideas on what we could do to set ourselves up would be much appreciated.

    Thanks 

    Profile photo of ducksterduckster
    Participant
    @duckster
    Join Date: 2004
    Post Count: 1,674
    January 28, 2009 - 10:26 am

    Get a re-valuation done on the house by the bank (costs approximately $400) .
    You owe parents 300k plus 200k of reno loan. So 500k/700 (expected value) equals 71% LVR.
    If you can afford a 500 k loan. May need to get a boarder in to help you pay off mortgage.

    Check with Parents . Do they need to have $300,000 up front from you?
    May be Parents would be happy on a 100k payment plus a cash flow payment for the interest on 200K that is remaining until you can pay them the outstanding amount. (This is known as vendor finance and gives them some cash flow and some capital).

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