Forum Replies Created
Hi Noami,
Wouldn’t an appropriately selected buyers advocate be able to assist you with finding such a property?Indeed – this is definitely in the realm of a buyers agent. Best to use a professional when looking to make a purchase worth hundreds of thousands of dollars – than relying on a stranger on an internet forum to find a property for you!
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
For purchases just about every lender will rely on an appraisal (or if a valuer goes out, their rental estiamte).
For refinances such as your scenario there are still a number of lenders which will look at either an appraisal, use their own internal rental estimate tool OR look at your tax returns to see previous rental income on the property. The best lender to use for the situation would depend on all the other factors of your financial picture – the rental verification portion is fairly small in the overall scenario so you wouldnt want to pick a lender solely on that one policy attribute.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Realistically if you want to continue borrowing to invest the things you can do to open up more borrowing options are:
*either buy out your investment partner of their 50%, or sell your 50% to them
*increase your personal income
*cancel any credit cards/personal debt remaining
*either switch as much debt as possible to P&I OR IO – depending on the specific numbers for your situation which is bestIn the end the best advice for your situation is going to be highly specific, so the internet isn’t going to help you. Best bet is to ask your broker, or if they can’t help you to speak with an investment focused mortgage broker.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I’ve heard of some Australian’s using: https://www.selectamericanhomes.com/ a few years ago and were happy with their services. I can’t remember if they only worked in Atlanta or a broader geographic area.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
It will completely dependent on:
*the shape and dimensions of the block
*utilities provision location
*type of subdivision that can be completed (ie requiring full duplication all services or can dual use be used)
*council that the land is locatedThere’s no way to ascertain any meaningful numbers on the internet like this – you would be best speaking to the council it is in and a surveyor who is familiar with the area, they will be able to give you a more accurate indication.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I relocated a house 20 odd years ago. the house was free and the move was $20,000. That was moving and reassembling. It worked brilliantly! Was a timber house, corrugated roof and timber lining. This is the best as the timber doesn’t crack like plaster can.
Indeed – I’ve had a few clients who have moved timber houses with ease – I was surprised how well it worked.
Pricing has definitely gone up a bit, I’ve seen move and establishment costs at circa $50-60,000 – but this is highly dependent on distance, type of property etc so you would need to get specific numbers before doing any project to make sure you don’t get any surprises.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Hey Moresh,
This is done by a few developers that I know already – easy way to get funds + presales requirements completed in one hit.
As Terry has noted, it’s well worth looking at what is the most effective way to structure this to minimise tax and government charges.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Most important is supply/demand of property in a specified area. What’s going to impact prices of property in an area more – oil prices or a doubling of stock coming on the market or a reduction in population in a local area reducing the demand?
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Definitely don’t close the PPOR loan down – as this is coded as owner occupied for purpose the lender will be giving you the lowest rate compared to investment use loans so it’s best to hold onto that.
Either keep the funds in offset or into the redraw account – be careful however as not all lenders are the same in how they treat fully repaid loans with funds in redraw, some will automtically close the loan, whereas others will let the loan sit active and available to redraw indefinitely. Best to speak to an investment focused broker regarding your situation as this is a prime opportunity to setup the structures correctly before you jump back into investing – if you do it right you can strategically setup cost effective lending and be able to make a purchase as soon as the right opportunity comes up.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
With house and land or construction loans – the lender looks at the total security and loans based on the combined costs/value est. For example if you bought a block of land for $300,000 and wanted to build for $500,000, pending a valuer agreeing on an end value at that price they would look at a total value of $800,000. From there you can borrowing against that value minus any existing debt. Assuming a maximum 80% LVR you would then be able to get a loan of $640,000 minus any existing loan on the property (the land loan), or you can go to 90-95% for an owner occupied build but will incur lenders mortgage insurance.
Paying LMI isn’t the end of the world if it helps you get you towards your goals. (building your own home etc)
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I’m a fan of the Salisbury council for <250k purchases. Quality is a touch higher than Playford Council/Elizabeth, for only a slightly higher price + slight reduction in yield. This will generally give you a balanced neutral yield/growth performer for the long term.
Once of my colleagues who is a mortgage broker in Adelaide wrote about purchasing property in the <250k price bracket in those areas recently.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
You’re right Dan – it definitely would need significant adjustment. These days a yield of ~6% should produce a cash neutral/positive scenario with most properties. The ones which will throw it off is on the ongoing property costs outside of interest expenses – ie strata, maintenance, water/council etc.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Hi Corey and Richard,
Could a Stat Dec to the effect of “I undertake to only use these funds for investment purposes” go some way toward satisfying the lender? As I understand it, a Stat Dec is not something to swear to lightly – but would one be enough to cover the lender’s needs (especially since it is an existing lender, and not one where Simon is a new borrower).
If not a Stat Dec, is there some other possible “out-of-the-square” option? What about Simon’s own Business Plan that lays out his roadmap for his future investments?
It sounds a bit silly to be having to pay thousands to get a “financial statement” over such a small loan…
BennyA stat dec used to work fine in the past – these days they have a lot less weighting and in this scenario I’d suggest there is not much chance getting it approved with it after they’ve asked for something more substantial. Once an assessor gets something in their head it’s not likely to be budged.
Yes Simon – this is 100% to do with the purpose of funds being verified, if you have a property purchase lined up and signed they’d approve and release funds. You don’t need to use the same lender, however they will check your borrowing capacity to make sure you can actually support the purpose on their borrowing rules.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
A FP will need to generate a full statement of advice, which can cost a few thousand, require a full analysis of your financial situation etc.
As to the lender asking for this information – effectively borrowing above an 80% LVR without having a property under contract to show the purpose of funds is going to trigger these kinds of requests. There are some lenders which *may* allow it without an FP statement of advice, but it all comes down to the discretion of the assessor as to what they will request.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Not sure if there’s any meta filters which can capture that information. At best you’re going to have to use a keyword search either through the normal listing sites or a paid subscription service like Real Estate Investar.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
This is mainly an Australian based forum so you might not get much luck in terms of advice here!
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Indeed – the best thing would be to confirm that there is definitely no option for finance with the current structure as there are options in the market which can only be applied through brokers (and not all brokers have access to these products).
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
It’s not the role of a conveyancer to negotiate on a purchase – that falls on either a purchaser or if they engage a buyers agent on their behalf. In case you’re not sure – here’s the main functions of what a conveyancer does in property transactions.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thanks for the advice Corey
I am the middle option (fixed hourly rate with no guaranteed hours, paid to a TFN as an employee NOT an ABN).
I am basically a freelancer. Can your company help me out in this situation, if so what do i need to provide as a starting point.
Best regards
IanThat’s not too difficult – it reduces the options available but definitely still possible.
Feel free to contact us via http://www.precisionfunding.com.au/ and you can have your situation looked at.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Finance for workers who are contractors isn’t that difficult – it just comes down to the way the contracting arrangement is structured and then finding the path of least resistance. Generally contractors will either be:
*fixed term employee contract (fixed hourly/amount for a set period of time, paid to a TFN as an employee NOT an ABN)
*day rate employee contractor (fixed hourly rate with no guaranteed hours, paid to a TFN as an employee NOT an ABN)
*self employed contract (paid in any variety of hourly, set amount of otherwise, paid to an ABN as a contracted business)Depending on how your exact situation is will determine the best way to present this and which lender – as some lenders are a lot better for these scenarios than others.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
