I need suggestions what to do next as I m confused and want to do to many things at once!
Want to borrow more money and what would be my best option to continue build my wealth.
Got IP worth $450k own $348. Rented out for $390pw. In a process subdividing that block, already have town planning permit, building permit and engineering plans for 2bed unit. When finishe both IP will be worth $700k. And will be positively cash flow properties, all under my name, want to stay that way.
I’m planning to build unit but want to buy another property ASAP, so I’m not sure what my next move should be?
I would like to top up my loan by 20k with current lender(20%LVR) and go purchase another property with my business partner with different lender but in joint name or trust so we can keep doing this. But I don’t want to restrict my borrowing capacity to build my unit if I top up loan.
Also I’m currently renting and was thinking of moving into IP while unit is getting build as I don’t think my current excellent tenant will stay! I am also bit scared that I won’t get another tenant while unit is getting built even though I’ll drop rent on 1IP. And I can’t afford paying my rent, loan and build unit.
Should I wait for subdivision comes through, revalue property, get tax back, then buy another IP then build. Or build then buy another?
What would be my best option?
And how to structure loans?
Any recommendation for excellent mortgage broker and accountant? I got both but need someone who understands what I want to achieve!Hi MGM
Firstly welcome to the forum and i hope you enjoy your time with us.
In regards to whether buying another property with your partner will limit your ability to construct a unit this will depend on what you are intend to buy (as with most lenders you will be considered to be jointly and severally liable for the entire debt) the return it will bring to your income and also you current position.
Without additional information i am unable to provide a further assessment.
In relation to whether moving into the property whilst you construct in the rear of the property is a good idea.
What you have to consider is what Terms you have in the Tenants Standard Lease Agreement. The Tenant has the right to enjoy a quite and peaceful surrounds and unless you have separate access to the rear of the property or indeed unless the Lease specifies that the Tenant is not renting that part of the block i think it could be fraught with danger if the Tenant remains.
In fact could find that the Tenant obtains a Court Order to stop you working and that would be unnecessary expense.
As i say timing going forward is more down to your funding ability and we do not have enough information to answer this.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thank you for your advise. We were planning to buy something round $360k mark n do sub division again . But if it will stop me from building unit then I will wait. I'm planing to get builder to build the unit. In regards to tenant there's nothing in the lease about building as the tenant doesn't know what I'm about to do will tell him in July so he has 3 months notice! N then ill move in. Should I convert my loan on PI loan or leave it as Intr. only?"
Thank You
MGM there is still a lot of personal information in relation to income and expenses that would be required to ascertain as to whether doing a separate development would have a detrimental effect on your serviceability.
As to whether you should switch the existing loan to IO will depend on how long you intend to reside in the property.
Not saying it all can't be done but more detailed information needed.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
1. You need to under what equity you have to work with – order a few upfront vals to determine this. Most lenders offer this and best of all they are free and quick
2. Ensure that you choose a lender that has a policy that can handle the development part – e.g don't go with an ANZ or ING
3. Be careful you do not increase your current loan if the purpose is for another loan – instead set up a separate loan facility.
4. Ensure that all loans are on IO to assist with cashflow particularly when you hit subdivision/development stage.
Where are you located?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Thank you for information.
I am in VIC.
At the moment i think i have 90-100K. Once its sub divided think will be at least 200-250k.
My lender already know what im going to do and said i wont have any trouble getting money to build a unit. I wanted to take 20K so we can go to other lender and purchase another property through them.All properties would be and are IO LOANS.
If i was to move into property while im building unit at the back i was thinking should i convert current loan from IO to P&I, but because i am Not sure for how long would i be in there i dont know is it worth doing it for a year maybe>
If tenant decides to stay i would adjust his lease agreement and drop rent, but don t think that will happen!
How are you calculating the equity and which lender is it?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
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