I was being told that >4 block of units = commercial rate 8.+%
and 3-4 units can still get the residential rate?Is this still the same option? Has the banks change the lending policy?
Has anyone succesful to get the finance recently for block of 3-4 unit under residential rate (without securing against PPOR)? Please share the experience.
Thank you
Hi,
I have a block of 6 (one title) that I purchased a year ago at same rate as residential, however the bank (WBC) would only lend 60% without M ins.
6 Months ago I purchased a block of 5, again residential rate, and would only lend 60%Cheers,
SAS,
Did u secure it against your PPOR?No
But did put down a large chunk of my own money to cover the remaining 40%ANZ just changed their policies, max 2 units per title now under resi
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes and they are not alone Wpac changed their sometime ago.
NAB is max 3.
Still the odd lender who will go to 4 and 1 I am aware of who will go to 6 but in the main 4+ is commercial rates.
Richard Taylor | Australia's leading private lender
I spoke to ANZ last friday as i would like to refinance, I was concerned about the two blocks of units in particular and specifically asked the bank manager the above question. They are ok, but ‘only’ for a 70% lend. I did not go into what other securities they would require, but did ask about the rate and he would match WBC. Meeting later in the week to discuss, ill let you know how it goes..
SAS Yes they will do 6 under the Commercial lending policy and always have.
Think both Terry and I were referring to residential terms.
Richard Taylor | Australia's leading private lender
SAS, but your rate is commercial rate = 8+%
It makes the invesment become non-viable as the return for the block unit is often 7-8% plus other extra cost.Terry/Richard,
Are the main banks charging semi-commercial rate at the moment? Average resi and commercial?
It would make purchasing block of units more difficult from now on??
GOM,
FYI I can confirm Richard's comments (not that he is ever wrong).
NAB will do 3 as resi (provided you are not a specific property developer/investor).
Once you hit 4 it becomes commercial, however it is possible to do a block of units at 80% against the "in one line" value (just in case you were curious on LVR also).
Steve oh you are good.
You ask my wife every arguement I am wrong lol.
Richard Taylor | Australia's leading private lender
Just show her the 40 odd properties you have in your respective trusts!
Now if you were wrong about even half of those you wouldn't have even half that amount!
Funny guys! Yeah we did 100% 3 units through Nab in jun/jul. St George would only do 2 units and other lenders would only do 70% etc. Looking at a new opportunity GOM? If the lending goes to commercial for 3 unit developments it’s going to grind to a halt real quick. Sorry typing on an iPhone:) if this thread is still going next week will comment lol
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHeh Steve
Problem is my wife is the other Director of the Company so technically she owns half and I own half so she tells me that stil makes me wrong.
Richard Taylor | Australia's leading private lender
With the difficult lending and higher interest rates(commercial rate), buying a block of units becomes unattractive nowadays.
Unless the return rental rate in the vicinity of >8%+, it would difficult to find the deal OR the vendor has to drop the priceGOM,
Depends how quick you are in and out of the project as to whether or not the commercial rate really affects you.
I have clients that do around 6-7 multi unit sites per annum. They are usually in, reno'd and out in 6 months for each project (and obviously run a few side by side).
Net Profit Before Tax is anywhere from $100-$250k each time, and the occasional $350k deal which may take up to 12 months.
Also note that if you have sold all bar 3 units, then quite often the bank will convert the remaining 3 onto resi rates (if you plan to hold them longer term).
Steve, I just want to buy and hold, not for development purpose.
But with the commercial rates, it is almost impossible to buy and holdHi GOM,
It is possible to do 4 units on a single title. Must be established, not construction or off the plan. Can be company, trust or personal names. 4 is the max at 80% LVR. Full doc only.
You mention securing to PPOR, but even if you did need to use equity in PPOR I would secure separate loan to PPOR and not cross-collateralise. You can use equity from any property this way and keep the each property (security) stand-alone.
Lender is Commonwealth Bank, but I would suggest you use a broker who can structure your loans correctly. Make sure they are fully qualified. Give them your full financial picture and sit down and talk about what you are doing now and where you want to end up, all of your financial goals and ask lots of questions.
Cheers,
TraceyTracy hate to disagree just done 6 units on the 1 Title at 80% lvr.
Admitedly this lender is slightly unusual and does things that other lenders dont.
Not everyones cup of tea but serves a purpose if the client and security is right.
Richard Taylor | Australia's leading private lender
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