Would there be any banks out there that would lend 70% of the value of a property if the vendor left in the remaining 30% vendor finance???
resi or commercial?
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
commercial
I think it is much easier to get these through on commercial. one of my friend did it about 2 years ago.
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
what is the best way to draw up the contract?
You should get your solicitor to draw up a loan agreement and mortgage for the vendor – if they want a mortgage (crazy if they don't).
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 they want a 2nd mortgage, so if the contract is drawn up showing sale price and then in special conditions it has something like vendor finance $xxx. and obviously with a whole lot more detail
will the banks loan on this even if I do not put any money into the deal and they no the vendor is leaving in the money
or do I need to structure it different and borrow 70% from the bank and then have another contract with the vendor for a loan of 30%yes they want a 2nd mortgage, so if the contract is drawn up showing sale price and then in special conditions it has something like vendor finance $xxx. and obviously with a whole lot more detail
will the banks loan on this even if I do not put any money into the deal and they no the vendor is leaving in the money
or do I need to structure it different and borrow 70% from the bank and then have another contract with the vendor for a loan of 30%Banks used to do this. not sure on more recent changes, but there would be some lender out there willing.
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
Keiko,
Its a case by case scenario. I was recently involved in a development deal for 20 units. The clients borrowed it’s core debt (with a major 4) and raised the balance through a second. The second was placed by a company that was set up specifically for this deal ( a group of investors).
The first, second and third questions from the banks risk and property specialists related to the clients “lack of hurt money’ in the deal.
In your case it will also be an objection. If the overall deal is not strong (in the banks eyes) they will knock it on the head. Whether or not you get it approved will come down to your ability to overcome their objections.
If you worked in business / commercial banking, It’s the sort of deal you would get approved for your top 20 clients any day of the week. These are clients that hold all their banking with you, have all their accounts and insurances etc with you and provide plenty of reveue to your portfolio.
New to bank clients and dry lending is the hardest to get any concessions on.
p.s. Dry lend is when client wants to keep their core banking elsewhere. Now that banks are focused on ‘revenue’ rather than ‘money out the door’, bankers are encouraged to avoid dry lending.
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