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Ok point taken, so what do you feel would be a fair return?
That seems a bit steep. Unsecured loans are around 15% and secured loans are around 7-8% with ANZ.
If what your saying is the accepted norm then that would make repayments (8% bank + 12% investor returns) around 20% p.a. or around a $3000/month kickback to the investor, is that correct?
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This reply was modified 9 years ago by
carlrsullivan.
PS: If this opportunity is not something you can help with but you know someone who would, I would be happy to pay $2000 as a finders fee for a successful referral.
Thanks for the responses guys, to clarify:
– The business has gone extremely well renting out office space to other small business owners, and as a whole this concept of co-working spaces has grown exponentially over the last 3 years.
– I run Your Desk (www.yourdesk.com.au) and over the past 3 years we have built up to offering 80 desks, with a gross turnover of just under $1m and a profit margin of around 40% and no debts. I want a loan of $400k to expand to 2 other locations and purchase 2 company vehicles that are sorely needed.
– Despite our success we are at an in pass right now, JacM is right that out of the big 4 banks only 1 will consider an unsecured loan to us and the terms of the loan are really steep. All of the big 4 banks say that with a property attached they would lend what I am asking for inside a week, no problems!
– So one thought was to find someone that has a property, that would become (for lack of a better term) a “short term stakeholder” with us, and in exchange for simply allowing their property to be the security they would receive a monthly dividend of $1000 or more.
– I am guessing that this “short term stakeholder” would also like some additional form of security as part of the agreement, but I am drawing a blank about under what additional conditions someone would be comfortable to enter this sort of deal and am open to suggestions.
– We are not looking for someone that would be willing to do this in exchange for a piece of equity, it is a family business and we would like to keep it in the family and have already have some great offers from synergistic business’ and individuals that if we were inclined to pursue that road would likely partner with them.
– to answer specifics brought up:
@JacM- banks are not looking favourably at office equipment to loan against, they see office equipment and plant as having a 3 year depreciable life span, so any monies borrowed against this would have to be paid back in the same timeframe.
@Qlds007- we would be interested going down the private lending path and I am confident we could provide an excellent business case, but it seems you gotta know a guy to get in with the private lending crowd.
@scha9799- I am well versed in Vendor Finance and its not the solution I am looking for in this case.
@Terryw- the business is a company and has been trading as “Your Desk Pty Limited” since May 2011Thanks Guys,
CarlI love the idea ad have done some research on how it would hold up. Overall the best designs seem to be shipping containers incorporated into a more holistic design.
Check out: http://www.pinterest.com/carlrsullivan/shipping-container/
Your correct Marty, I am looking to see how much money the vendor can leave in the deal, as this will make it more viable. At this stage i am approaching it with a strait property option with a provision for both early access and ability to undertake renovation works, failing that i will reattempt the same thing with a second mortgage carry back where they leave a significant percentage in the deal.
The issue I have is that the agents are keeping me at arms length from the vendor, and filtering all the information coming through for what they consider the best interests of the vendor, a challenge that I have to overcome this week.
Trevor, my exit strategy is that I will complete renovations in the 4th quarter of 2011, fill the complex with tenants then approach the bank to revalue the property taking into account its new use as a commercial office suite (as opposed to it previously being a residential basement apartment). The change in use and significant increase in possible monthly cash flow (from aprox $1,000 to $10,000) will give me ample leverage with the banks to pay out the vendor in full as well as pay out the private investor and any profit to them while still having both significant equity and cash flow spare (enough to cover the 30% LVR).
As for the question of security with the investor I am open to suggestions, as the deal will likely be a form of vendor finance i expect that the security will most likely be in the form of a caveat, which I am happy to be in the investors name if that assists with trust and confidence in the deal.
Thanks for the tip.
I am hoping however to find a private investor not so much a mortgage broker that will offer bridging finance at exorbant costs.
Anyone else have any tips on private investors and where to find them?
Just wanted to clarify if there is there another method where you can get Names and/or address' which is not in breach of the privacy act?
For example many of the occupants of each building are renters, not owners. Would it still a breach of the privacy act to source their address (say through the white pages) using the names of RP data but do not address them by their name ie: To the Owner/Occupier of Unit 1, 123 Fake St. It seemed that Richard makes the point that if you can prove that any personal data is taken and utilised from RP Data then regardless this is a breach of privacy laws.
Do all real estate agents looking for additional listing simply send letters to the letter box of the property they would be interested in marketing addressed to owner/occupier or is there another method that can get around this whole privacy act thing?speak to a real estate agent who should be able to use RP Data to find the name for you
Carlin,
personally I prefer the wooden floors, they are comparable in cost (depending) and if done correctly can provide the same acoustic properties as carpet.
I just finished my apartment with the clicklock flooring system and so far there has been no issues. Personally i believe that the issue comes down to choice of materials and the existing structure.
Look at the thicker and more expensive flooring acoustic underlays, the thicker it is the more of an air barrier there will be which will ensure that minimal noise will be transmitted through.
In fact there is no reason that you cannot lay a floating floor over both the carpet and vinyl (so long as you have an even levels) which you can then argue that all you have done is enhance the acoustic properties of the apartment.
Esentially the idea was to where possible help him make the most of the current FHOGS with the boost. Yes we would be investing in it together, but as you point out I cannot be a joint owner because then he loses the FHOGS for good, consider me more of an off the books silent partner.
At the end of the day the FHOGS would contribute around $25k to the project, which would help the viability of the project dramatically. The concept is that we can use the FHOGS to redeveolp the property faster, wheather (after 6 months of occupancy) we sell the property or hold there will be a substantial increase of equity, of which my brother could use his cut towards another property in the future.
Failing this I will approach the investment myself and make the best of it, but I would like to help out my brother if I can.
i guess the question i have is:
Can i obtain a deposit bond secured against future cash of my parents or do they need to obtain the deposit bond on my behalf?
In either case can anyone suggest a good deposit bond vendor
Carl
the new property will be both, we can live in the back section while the reno is going on, probally hold onto it for 6 months to avoid capital gains tax and then sell it and use the profit to build on the back section of the property another 2 town houses.
As for income:
my parents $180,000
me $40,000Cheers for the reply, i guess my major problem is i have read all the books avaliable for Aussie property investing (and other forms of investing). I have a great knowledge of my market area (i work in construction majoring in market analysis and valuation).
But your right, i gotta get rid of the cc before moving on, cheers for you comments.
Carl
Lesia,
i dont know what your strategy is, or budget, but there is a great oppertunity for renovations in Sydney granted if you have $1 million or more to invest.
The most basic formula that still applies in the Sydney market is extensions, try to find a house that has adequate space for an additional bedroom, or alternativly find a property where you can move some walls to reconfigure the space. Apart from that the other great money spinner is subdividing, with the only issue being that this pratice is becomming harder and harder to do because of supply shortages.
You will find that the easier the property is to do the more you can expect to pay. Otherwise keep looking, as i see oppertunities bout every 3 months that are a real go’er
Carl
Young people have experience as well
Lesia,
i dont know what your strategy is, or budget, but there is a great oppertunity for renovations in Sydney granted if you have $1 million or more to invest.
The most basic formula that still applies in the Sydney market is extensions, try to find a house that has adequate space for an additional bedroom, or alternativly find a property where you can move some walls to reconfigure the space. Apart from that the other great money spinner is subdividing, with the only issue being that this pratice is becomming harder and harder to do because of supply shortages.
You will find that the easier the property is to do the more you can expect to pay. Otherwise keep looking, as i see oppertunities bout every 3 months that are a real go’er
Young people have experience as well
hey Mytch,
just shoot through an email for you.
Carl
Young people have experience as well
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This reply was modified 9 years ago by
