Hello Everyone,
My wife and I have been considering purchasing a motel leasehold for some time and while it is clear a large deposit is needed I was wondering if anyone knows of any leniency by the lenders depending on any specific situations.
We are looking in the $300 000 price range with 35% net profit after rent for our first lease and from my research most lenders have suggested a cash deposit of 30%-50% + stamp duty costs etc would be adequate. However our planned situation would be that I took care of the motel while my wife continued in her government occupation where she earns $115 000+ each year.
So my question is, does anyone have any suggestions of lenders who might be more lenient to a smaller deposit considering the ease of which we would be able to service the loan?
Hi Allan
If you use residential property equity for a deposit, the interest rate can usually be negotiated at res rates pro rata.
If you have some funds in term deposit, they can be tagged(locked in, secutitized) by the lender, left there to reduce cash deposit.
You could negotiate a deal where your initial principal repayments for the first 12 months are high.
You could show extra loan servicibility if you move into the motel residence and rent out your PPOR, if you own it, plus factor in the lower costs of living at the motel residence, many personal outgoings or needs happen to be provided by the motel and are expenses attributable to the business – utilities like gas/elec/water, rates, broadband, phone, car, Austar.
Might be advantageous to use a finance broker, they already have expertise in structuring loans and applications, and already have relationships with lenders and more clout than you.
There are a few on this forum who have thousands of posts to their credit and have helped lots of people here for a long time.
good luck.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi Allan
Did you manage to put a finance deal together, might be very interesting to know how it went so we can all see what the current market is providing .
Any feedback appreciated.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
- Determine if you can use the equity in existing property to help fund the purchase.
- Choose the most appropriate loan structure. e.g Interest Only / Principal and Interest or Fixed Interest / Variable Interest
- Choose the appropriate lender and loan product.
Hi Allan Finch
Did you make any progress with your motel finance ?
Any feedback for the Forum and this post of yours ?
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Hi all
Just had 2 recent chats with banks re motel leasehold finance and here are the results.
St George – only lend if loan secured by freehold property.
BankWest – only refinance existing leasehold owners, not new purchasers.
Not very helpful are they.
These unhelpful ones make it easier for the others and especially easy for finance brokers.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
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