Can I get a 2nd property without enough equity?

Have both of you considered a second valuation with an alternative lender ?

Other than this raising a deposit thru a personal loan maybe an option but not easy these days.

Vendor finance for the deposit is fairly unlikely as most sellers wouldnt understand or be prepared to take on the deal.

2 years is not a long time for your equity to grow, unless you did a reno. Don't believe everything you read and hear about property increasing in value every year. it's not as simple as that. On a wage of $70K, surely you could save at least $20K pa. Eat baked beans everyday if you have to. I remember when I rented a house for $20pw (it was under the house), my kitchen was my shower & laundry all in one just so i could save for a deposit to buy a property. keep saving your deposit as your very lucky to have such a good income.

Mate I hear you, my valuations are all over the place. I had one value (ANZ Bank) at $1,150,000, a month later Westpac did it at $1,450,000 and I managed to refi with Rams – finally after waiting 18 mths to get finance. Tis is a financing nightmare at the moment, but it will all change – one day and the Banks will be cralling for our business again.

Hi Jiia.

I probably shouldn't say this in case one of my kids reads it, but is there a possibility a parent could loan you the deposit for another investment, on the basis that it is a really good buy, and that you have shown them that you can reimburse them within 12 months?
Alternatively you could see if they are interested in doing a joint venture with you where you put in the sweat equity to improve the value and they provide the deposit.  It could be sold to release your new deposit for something of your own, or keep for a while.
G

Hi again Jiia.

Not to worry.  I think on your income with your motivation, you can save the deposit quite quickly, and there are always good buys out there somewhere.  Don't forget you can sit your savings in an offset account to reduce the interest on your existing mortgage.
Good Luck.

G

did the valuers do a drive past or a walk thru valuation? A walk thru may be more favourable.

I am about to hopefully get finance for a house and land package.  Building should take about 6-7 months (Jan-Feb 2011).  The good thing is i don't need to start making repayments until i get the key so that's 6-7 months i can save up more money (to add the inevitables like do up backyard and some air con etc) but also to build up savings for a buffer once i do move in.  The package is about $330k, but with my deposit of around $20k that should have the loan when i move in (not counting any savings i can put in an offset acount) of around $310k.  Properties in the existing part of the suburb where the new estate is have had houses advertised for around $370k up to over $400k…  Not sure what they are finally selling for, but I am planning to add a few nice things to the place, so am expecting it not to be at the cheapest end of that range if it went on the market.

If when i walked into the house I could get something like $380k-390k i would strongly consider selling it after the minimum amount of time living in it to not have to pay CGT and go off with my $70-80k profit and buy/build one or two places…  But if I did decide to keep it, either to live in or rent it out, it would be nice if after a valuation it showed that the house had equity of $60k-70k and together with a bit of savings i had accumulated it allowed me to think about getting an IP property early/mid next year. 

But just not sure how conservative the banks might be in working out a valuation for the house, especially in the area of a new estate etc with other houses in the middle of building, or vacant blocks of land around whose dwellings have not started yet…  I suppose i will have to wait and see..

Mark

A joint venture or finding a money partner is a possible option.