Hi All
Situation is as follows:
-I own 1 x property in Geelong – currently rented, however lived in it for first year. (6 year rule)
-Lender: ING
-Currently making 150 a month positive cashflow
-Todays valuation from estate agent – Between 315 -330K
-I owe 242K
-I own my own business
-Income between 80-90k
-My partners between 50-60k
-Cash reserves are minimal
-We currently rent together
-She has no assets, no debts and secure employment
PLAN:
-looking at purchasing an IP in Braybrook/Sunshine
-Im after 600+ Square metres
-House that I could do some minor cosmetic renovations on to potentially increase rent
-Looking at spending between 330-350K
-Want to rent it for 1-2 years before applying for a subdivision.
-Potentially build / see land to a developer
-Cash reserves minimal
Question:
-Can you go to the local council and ask if the property I intend to purchase is suitable for subdivision?
-Any advise on using equity in current property for deposit and closing costs?
Thanks in advance
I'd be careful with a real estates valuation. It can be very inaccurate/miscalculated. It's sometimes best to pay for a valuation they are worth it. If the valuation is correct you could probably draw out the equity to help with the deposit but the banks do keep a percentage of equity as security. I think most banks allow 70% of equity to be touched although ING may be different. one of the many brokers on here will probably be able to help you with that side of things.
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Hi Sil
Rather than decide that your strategy is Sunshine, it might be better to define the goal and then choose a suburb and strategy that will allow you to achieve the goal.
For instance, the goal might be "to make a gross profit of $40 on a property deal within 12 months". You'd then choose a suburb where a renovation would enable you to deliver on that goal (or a subdivision or whatever).
Is this property part of your "assembling enough property to live off when I'm retired" phase? If so, you might care to consider setting up a SMSF and using your superannuation as deposits on property.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Sil
Ok couple of factors worth considering here.
Your equity position is fairly limited and has been stated big difference between a real estate valuation and a bank valuation.
Get your Broker to run an upfront valuation to see what useable equity you have.
Looks like it will be a matter of going to a 90% lend so going to be limited lenders who will allow "cash out" at that lvr.
Assuming that looks ok then use these funds to cover your deposit and acquisition cost for the new IP.
You are going to struggle to finance the renovation costs unless they are carried out by a Licensed builder on a fixed price quote.
In saying do have one product which might be idea for such a venture as it would also provide you with funding to potentially carry out the subdivision down the line also.
You do not mention your current living arrangements so i assume their is some liability there but with some clever restructuring no reason why it cant be set up correctly to enable you to go forward in an appropriate manner.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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