help needed today desperatly

Hi Patrick,

Agree with Terry – need to look beyond cashflow and look at the fundamentals of the area too.

Being end of year and start of a new year chances are the property will not be snapped up overnight. Sometimes you need to pause before rushing into something half prepared.

Before anyone gazump you, put an offer on the property preferrably put a small deposit and if accepted, get them to take the property out of the market before it disappears out of your sight.

Then, do your due dilligence (e.g. building inspection, pest control etc). Also, talk to your silicitor to put the property under a trust name for asset protection…. structure it well. Then, speak to your mortgage broker if you have already pre approved mortgage by a bank….and see what's your LVR from your lender. Some Lenders can loan you up to 90% of the value of the property.

ANZ, ING etc are some of the lenders that will lend up to 90% of the market value of the property… in Bull market Lenders will lend up to 95% of the value of the property, in Bear market, they are more cautious…

To prevent gazumping you would need to enter into a contract. And to avoid paying stamp duty twice you would also need to have the entity established before entering  contract in most states, inclduing, I think WA.

So becareful in following this advice.
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You have to read between the line……..once the offer is accepted (e.g., either in writing or verbal), get a copy of the contract then forward it to your solicitor. Again  read between the line…..structure it well (e.g., place the property under a trust not personal name).

For Christ sake, the guy need some valuable advice, all you monkeys telling him WHAT NOT TO DO instead of WHAT TO DO…

He wouldn't be posting here if he didn't need a help….get it!!!!

If you tell the vendor to take it out of the market while you are under contract it will prevent you from getting gazump..that's how I bought several properties.

Sorry DHCP

That is simply not correct.

Neither lender you mention will lend against valuation irrespective of the purchase price.
It doesnt make any difference whether it is a bull or bear market.

If you have a look at the Credit policies of both Banks and in fact all lenders it clearly states "purchase price or valuation whichever is the lower".

There is nothing to stop you refinancing after settlement and if you feel you can get the valuation increased borrowing upto that amount (subject to mortgage approval).

The only time lenders will lend against valuation is where the property has been purchased off the plan and the contract is dated more than 12 months prior to Settlement. 

Cheers

Yours in Finance

              NO  IT WONT.          You can sign the the contract, the vendor can tell you anything, say he is despperate to sell and wants to sell  asap .  but until he signs the contract he can sell it  to who ever he wants for whatever he wants.   This happened  to me  after wasting 2 days getting unconditionl finance  and twisting bank managers  arm  paid the deposite  signed a   contract , the vendor wanted it  signed and in 2 days or the property  would go on  the market.    After weeks of excuses and BS why the sale wasnt progreessing.  I get a phone call saying they wanted more money as they had a higher offer.   This was through a high profile BA  one of  staff was disgusted and told me the propery was still being shown to other buyers.   Yet this  even happened by an agent that was  supposed to represent my interest.        Once the  vendor signs the contract  he can still market the property and they often do  til after settlement is complete. What they say and what they can do are completly differnt. Also I have found the ANZ by far the most difficult bank to get a loan from even with very low LVRs. They did have tnhe toughest lending criteria.

Hi Patrick,

I think there are a couple of things you need to sort out:

Who is your solicitor / conveyancer? Get them to look over the paperwork, and do it fast!
How much do you have and how much can you loan? Will this cover the cost property as well as purchasing costs?
How long is the cooling off period? You might be able to use this to your advantage if your offer is accepted and you need to do some FAST research.
What is the location of this property? Does it have solid fundamentals or is it a single-industry area which might bust in two years’ time, thus leaving you with a considerable debt and a property that nobody wants in a ghost town?
Do you trust the figures you’ve been given? If so, then wouldn’t you want to check them again (we have a free cash-flow calculator on our website)?
Is there already a tenant? If so, how long for? If not, what’s the demand like in that area?
Have you spoken to a lawyer or accountant regarding the best entity to purchase such a property in?

I’m worried that you’ve seen what could be a great buy (or it could be a good-looking stinker!) and you’re jumping in too fast. Take a few of these steps, get yourself some advice (read through this forum, listen to some podcasts – there are lots of free ones, ask some experts) and then make a cool-headed decision.

And finally, the guys who have responded to your thread may seem like they’re arguing, but they ALL have the best intentions with their advice for you (from what I can tell). Yes, you need to get the seller to sign the contract so you can’t be gazumped; yes, different banks will only loan so much. Advice, as well-intentioned as it is, can be conflicting. Make sure you read different points of view and develop a good understanding of property investment before you buy.

Good luck!
Den

If I was a motivated seller I would accept whoever signed an unconditional contract first with the price I wanted. I wouldn't care if they were a motivated investor or it would mean going with someone who had just made an offer.

Even if I wasn't motivated, I would still do the same. A sale is only a sale if the contract is exchanged without conditions (or when those conditions are fullfilled). Actually a sale is really only a sale when it settles and the cheques have cleared because some do not settle.