All Topics / Finance / Financing a block of flats

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  • Profile photo of LinarLinar
    Member
    @linar
    Join Date: 2004
    Post Count: 567

    Hi everyone

    Does anyone know of a lender who will give an 80% lend on 6 units on the one title? My current bank says that more than 4 on the one title means that it must be a commercial loan and will only give 65%.

    If I can get a residential loan, will I be able to do so if I am purchasing as a company?

    Thanks all

    K

    Profile photo of Mobile MortgageMobile Mortgage
    Member
    @mobile-mortgage
    Join Date: 2003
    Post Count: 913

    You may get 70% with the ANZ,
    You can still get resi rates in a PTY, keep in mind If you’re purchasing in a Trust or a Company you will require directors guarantees.

    Regards
    Steven
    Mortgage Broker

    Mobile Mortgage Market
    Ph: 0402 483 216
    [email protected]
    http://www.mobilemortgagemarket.com.au

    PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

    Profile photo of RikkyRikky
    Member
    @rikky
    Join Date: 2005
    Post Count: 313

    I got an investment loan with the national bank for 5 units with a 20% deposit.But most lenders at the time told me it is a commercial loan and wanted 30% deposit. Just keep trying

    Cheers Rick

    Monopoly, my favourite game

    Profile photo of LinarLinar
    Member
    @linar
    Join Date: 2004
    Post Count: 567

    Hi Simon

    Forgive my ignorance, but what is a director’s guarantee?

    K

    Profile photo of asdfasdf
    Participant
    @asdf
    Join Date: 2005
    Post Count: 139

    You mean Steven? Directors g’tee usually required if the trustee company borrows the funds seeing the co. is probably a $2 co. with no assets. This means the directors (you) will have to g’tee the obligations under the loan. Not too much of a hassle, just more paper work the bank needs to send out to you so a little more time consuming. But if you have a HDT, I would have thought the loan is made directly to an individual? so they can use it buy the units in the trust..etc.. Pty then reg’d in name of Co. Trustee ATF HDT. Any financiers care to add/ correct me?

    Profile photo of davecurrandavecurran
    Member
    @davecurran
    Join Date: 2005
    Post Count: 6

    Hi

    where are they located?

    Dave

    Profile photo of Mobile MortgageMobile Mortgage
    Member
    @mobile-mortgage
    Join Date: 2003
    Post Count: 913

    asdf comments are spot on, cheers.

    Regards
    Steven
    Mortgage Broker

    Mobile Mortgage Market
    Ph: 0402 483 216
    [email protected]
    http://www.mobilemortgagemarket.com.au

    PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

    Profile photo of LinarLinar
    Member
    @linar
    Join Date: 2004
    Post Count: 567

    Thanks for that ASDF

    You have just reminded me that, despite having a law degree, I would rather pay an accountant to do all my dirty work!

    Steven (sorry about the Simon thing), I have spoken to your mate today and all systems are go.

    Cheers

    K

    Profile photo of Mobile MortgageMobile Mortgage
    Member
    @mobile-mortgage
    Join Date: 2003
    Post Count: 913

    That’s good news Linar,
    Good luck with it all, cheers.

    Regards
    Steven
    Mortgage Broker

    Mobile Mortgage Market
    Ph: 0402 483 216
    [email protected]
    http://www.mobilemortgagemarket.com.au

    PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.

    Profile photo of asdfasdf
    Participant
    @asdf
    Join Date: 2005
    Post Count: 139

    You’ll find what you learnt at uni is of very little relevance in the real world of property investment and wealth creation. You’ll learn more from your fellow forumites than them case laws you’re used to trawling through. I’m thinking that Steven put you through an accountnat? I was going to suggest that you don’t just use any old accountant. You should work out what you want. Pros and cons/costs with different type of trust structures and trustees. Get that sorted first before you go shopping. We were doing it simultaneously and boy was it a pain. Good luck. Incidently, are you practising?

    Profile photo of LinarLinar
    Member
    @linar
    Join Date: 2004
    Post Count: 567

    I’ve got an excellent accountant. I just do whatever he tells me to do.

    I used to trawl around the criminal courts (where of course you don’t need to know any actual law!) but I have just had a baby and have retired. My husband will join me in retirement at the end of next year when hopefully we will live off our property investments.

    Ah, life is grand.

    K

    Profile photo of grossrealisationgrossrealisation
    Member
    @grossrealisation
    Join Date: 2005
    Post Count: 1,031

    hi Linar
    Have you looked outside the square and costed to strata the builing.
    A you would increase the value of the units.
    b lending on each unit is easier.
    Not sure if I should be helping a lawyer I may sit on the fence on that one. but you did say criminal law so I suppose that counts me out of that one.
    Also don’t just look at banks have a chat with a broker re private lenders you’ll get 8.75% currently and they will go to 80%.
    and the last but not least drag as much out of your home equity in cash and drop it into the loan as it will be at resi rates and split the loan for tax purposes.
    This should not be seen as financial advice and should not be used to gain finance.

    here to help

    Profile photo of LinarLinar
    Member
    @linar
    Join Date: 2004
    Post Count: 567

    Hi grossrealisation

    Thanks for the advice.

    The units are already strata titled – which almost makes up for the disastrous state they are in.

    I have been dealing with the ANZ bank directly as well as with brokers. The ANZ came back to me today and said that they would lend at 80%. Who would believe that a major bank would come to the party? Having said that, I have been quite happy with the work that ANZ has done for us in the last few months.

    I’ll keep you all up to speed on how we go with it all.

    Cheers

    K

    Profile photo of asdfasdf
    Participant
    @asdf
    Join Date: 2005
    Post Count: 139

    Sounds like you’ve found a lender. Is it still on commercial rates? I would have thought if you said you wanted 6 contracts drawn up, it could be resi loan and can maybe borrow more with LMI?? If they’re balking, then maybe try to stagger the settlement say 2x2x2 at a time? Would need the vendor to agree to arrangement too though.

    Life IS pretty good – have a baby and you get to retire! Best wishes.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Anz would certainly do 80% if they are strata titled but would limit LVR to 65% if in one line.

    We have several funders who would do 80% for a non strated block with rates not far off residential.

    Cheers Richard

    Ph: (07) 3720 1888
    [email protected]
    http://www.yourstatefinance.com

    IP funding and US property finance
    our speciality

    Richard Taylor | Australia's leading private lender

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