Hi Guys Hoping for some ideas on where to go next for investing….Have had a bit of luck with an IP I bought last year that has gone from $215k to $250k,,,,,I am hoping to use the equity from that (currently owe $205k roughly with commbank) and also have $40k case saved with my partner….I dont like the idea of just buy and hold again and want to hopefully create more equity….I can also access the $15k FHOG as I have never lived in my properties ……..Any suggestions whether it be a reno/duplex development/ see a professional to buy under market etc??? thanks in advance for taking the time PS …How do I create paragraphs?…my ENTER button doesnt seem to work when posting thanks agian
Hi Woody
Welcome to the forum and i hope you enjoy your time with us.
Have to say given that CBA will only go to 90% lvr on an equity release you are going to fairly limited as unless you build or buy a new PPOR you won't qualify for the new build boost and therefore are going to have to use your own funds / equity to cover your deposit and acquisition costs.
From a quick calculation your total cash reserves come to around $60K so your acquisition price and the type of project you can acquire is going to be capped.
You might want too think about a 100% loan or a facility where you can get a secured line of credit over and above the 90% lvr as these funds could be used for renovation, subdivision etc.
Alternatively look at some creative financing or cash flow ideas to build cash flow / equity combined.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi RIchard….Thanks very much for the speedy reply….You mention looking into a 100% loan facility although commbank only do LVR of 90% on equity??? How would that work and how is that different to an equity release loan??? thanks Richard
Would have to be a 90% CBA equity loan and then another lender for the new IP loan.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Ah ok…Thanks for that… I think my broker is going down that path…I am trying to keep as much cash as possible…My original plan is to just try and buy a smaller priced property )maybe a unit) for around 220k using the equity as a deposit and Sduty costs etc and rent it for 290-300 pw…..and then buy a house up the central coast of NSW for around $350k ( this purchase is a bit emotional as I want to move there)….I am just dreading running out of cash reserves so I realise I have to start putting my investing brain to work and think outside the square to continue on the property investment journey…hopefully
Hopefully your Broker wont be using the equity but taking out a separate sub loan.
Do not cross collateralise the securities under any circumstances.
With the right loan selection and sufficient income / rent you should never run out of equity.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Great thanks again RIchard…. I believe that is what he is doing as we are going to go through a different lender for the loan while using the equity sub loan as the deposit…Hopefully my next couple of purchases can produce some good cash flow as I believe the low interest rates wont be around forever….
Hi Woody
If you have any doubts with the structure – best to get a pro like Richard on board.
Sounds like your current broker isn't crossing though so that's always a good thing.
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: info@passgo.com.au
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