Hi – this is my first post here – so….
I have a couple of investment properties and both are currently income neutral – ie rent pays interest.
Both were purchased on 100% borrowed money, interest only, secured on my fully owned home.
I want to purchase another property, most likely a block of flats that returns about 6% so will pay for itself.
The issue is that I now have no job, so I don't think a bank will lend me money.
I have traded property over the last 10 years, and have a decent track record so
I am very confident that I can make the deal work out.
I wonder if going to private finance would be the bost / only solution?
And if so, where on earth do I start looking for an investor?
Thanks! Jen
Hi Jen
Richard Taylor is most likely to be able to point you in the right direction. I'll ping him an email and have him respond to your thread.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
ps make sure you find out what all the bills are on the flats. If the council rates and water rates are billed separately you would surprised how quickly your 6% yield will be eroded. I'd be looking for closer to 6.5% as a minimum on a block of flats. Also be aware that if there are 5 or more flats in the complex it will almost certainly be commercial finance which is a higher interest rate.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
how many units within the title? also what LVR and interest rate are you wanting?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Jen@ wrote:The issue is that I now have no job, so I don't think a bank will lend me money.
Hi Jen
Are you generating any income at all?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Jen
Firstly thank you Jacqui for your kind ping.
Couple of initial alarm bells starting to ring.
1) Why oh why did the Bank take your own PPOR as security and not the investment property being purchased.
I can guess why but not a recommended strategy going forward unless they are of unusual Title or location.
2) You say you do not currently have an income but i am assuming you have Tax on the profits of the properties you bought and sold over the past years.
If so then we maybe able to take this income into consideration.
Also both current properties and your next acqusition will generate a rental income and this can be taken into
consideration when calculating serviceability.
Private finance is certainly an option but the rate of interest is likely to be ugly.
Acquisition would need to be a non coded loan and purchased in a Company name to get around the NCCP legislation however i am not convinced this is necessary.
More information would be need on both current position and the position going forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Jacqui – for making the connection!
Four units, 80%.
Interest….. well as low as possible of course!!
Nothing serious! A little bit of casual work here and there.
I also rent out a couple of rooms to students (primary residence) so that's what feeds me.
Hi Richard,
thanks for your response.
PPOR is cross colateralised as both existing properties are 100% financed so needed the extra equity. (Is this terrible?)
Rent is the major income source. Yes, there have been profits on all previous sales.
What sort of interest rate would I be looking at please?
Both existing properties are held by a company. I am the only shareholder.
Thanks for your time!
I would need more information but at 80% and four dwellings on a single title is doable. You would be looking at CBA or Adelaide as the best lenders for this scenario. Best to get a CBA banker or broker to look at the whole application and then structure it accordingly.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
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