Hi fellow investors,
I have a dual occ property for sale in Clontarf (Redcliffe Peninsula) which currently returns $680 per week rent.
I have had 2 contracts on it for $565,000. The new owner's return will be 6.3% return, more by the time depreciation is factored in …. so it is a real bargain considering the forecast for the Peninsula.
Both contracts have fallen over on finance – serviceability. Building & Pest has been fine, valuation is fine.
Question 1.Can I ask you investors out there who have purchased through a bank in the last 2 months ….. which banks did you obtain finance through, which banks have knocked you back & why.
If I get some tips on banks, I will pass this information on to the next person who wants to pick up the Clontarf diamond.
Question 2. To all you Solicitors and Lenders/Brokers in our group …..I am thinking of adjusting the marketing of the property to entice those who are starting out in property, whereby the purchaser could split their loan into Flat and House – rent the house (deductible) and live in the flat (non-ductible). Loan 1 split – House value $365,000, 2 year lease of $380 per week is applied to this split, Loan 2 split – Flat value $200,000, owner occupies as the cheaper loan if they need to live in the property. Everything is separately metered already. How could this be done (get it over the banks line) if I get a buyer in that situation?
(Contact me direct if you don't want to publicly share: Simone 0417 747 588 or [email protected] )
Thanks (in advance) for the brainstorming session.Q1. Everyone is treading on eggshells, you have to look at the personal details of each borrower and put the deal not with the best interest rate but the most appropriate lender. There is no one bank, just different policies that the perspective borrower must meet. You have indirectly pointed out one critical element in this question, and that is, the use of a good broker is paramount to securing a loan. This makes it very difficult for you, as your advice (particularly as you are selling the property) would not be seen as impartial.
Q2. The perspective buyer should set up split loans to show each properties debt, and I would suggest an independant valuation of the two properties to ensure an accurate assessment for this loan split, and for future CGT. i.e. the O/O part is CGT free and the investment half of this deal will require CGT. It would be similar to renting out a room in your PPOR (it has to be apportioned).
Here's another thought, change the Dual Occ. to two separate titles, this will increase the sale price and open yourself up to a new market.
maybe you could offer them vendor finance. There are some people on this forum that can help you do that.
Hi
Thanks so much for your replies. We don't want to go down the strate title path, but leave that as an option for the new owner.We already offered one buyer vendor finance.
Was talking to our solicitor on the weekend and she said some of her clients have had up to 4 contracts fall over on serviceability. I know ING has reduced it down to 70% (purchasing in structures), so I guess it is a bit tough for all.
I can sit and wait because the property pays for itself ….. it was just a "nice to" be unconditional by June 30.
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