[EJayMember@ejayJoin Date: 2013Post Count: 6]

December 10, 2013 - 2:14 am

Hi Mr 007,

clearly plenty of lenders are willing to lend more than purchase price given that 100% finance + expenses is common

Have looked into it further and this kind of structure has been executed in a number of bulk deals previously. I spoke to an independently recommended solicitor in QLD who said that it used to be permitted in QLD but has since been prohibited there. The investment company also did their due diligence and found the same, they think it still may be possible in other states and have executed same previously. I guess it's around what the definition of 'value' is i.e. fire sale with quick turnaround is never going to get the same value as on mkt for average time.

Other than that the deal has fallen through as the vendor has been able to refinance.

In regards to the bank being willing, all I can say is that my banker didn't raise any objections, in fact she said that I could 'include what I liked' above the purchase price given that the loan would be against both the IP and my own residence where I have a healthy equity position.  Obviously there would be an implied limit given my combined collateral position but you get the gist. The anecdotes given by the solicitor and and the investment co indicated from experience that it has been done before (solicitor completely independent FYI).

I see the value of asking a chat board, as finding constructive folks who may have the experience to indicate that I should seek a second opinion outside of my standard networks and professional service providers, for specific reasons that they are aware of. Or that have other creative ideas  that I can test, as per chat board title. Next time I will clarify whether I would prefer substance free condescension

[EJayMember@ejayJoin Date: 2013Post Count: 6]

December 9, 2013 - 2:05 am

Thanks guys, yes I will clearly be getting a good solicitor to take a look, I've been recommended a good Brisbane lawyer. Bank is aware of secondary contract.

So far my financial planner's accountants think that it is a reduction to the cost base. Getting a second opinion as if it's income that could obviously impact the holding strategy.

[EJayMember@ejayJoin Date: 2013Post Count: 6]

April 15, 2013 - 11:25 am

P.s. I work in finance so can get LMI waived with 10% deposit rather than typical 20%. For now!

[EJayMember@ejayJoin Date: 2013Post Count: 6]

April 15, 2013 - 11:19 am

Some great leads here, thanks folks. I tend to agree that I'd prefer to educate myself rather than trust the advisers. But wouldn't it be great if I could land the perfect adviser and build a trust relationship because they are prepared to take the time to educate me. Mythical creature??

As context I'm 35 yo, currently in highest tax bracket but don't want to count on that as am I'm at a point where I want to look at changing careers or at least taking a sabbatical. Latter is something I pretty firmly want to do next calendar year. I've built a bit of equity in my apartment, about $100k in cash redraw plus the neighbours recently sold for nearly about $200k above my purchase price, almost mirror identical apartment. I'm pretty attached to it though so not looking to sell and rent as some have advised.

Pretty time poor at the moment so looking for medium to longer term passive holds. Looking for early financial freedom, aren't we all? Want to see where I can deploy my equity to get the most out of it over a 10 year timeframe.

Would be interested in the comment re 'beware of guaranteed investment returns'. Why is that? What are the typical pitfalls? For one, I know I need to do my sums properly to see whether I really do come out CF+, and for two ,I need to look at any residual costs they are not covering in the contract like unexpected maintenance. But this is par for the course. Also need to look into capital growth outlook at end of guarantee period, that is a harder question to answer given the ups and downs of labour around Mackay.Much more construction planned but past 5 years, will the labour profile drop off once more? Specifics of the off the plan build and quality of builders / material, these are all further questions. So much to research!