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I don’t believe that I am asking too much for the property, with the current ad for ‘Offers over $299,000’.
Its normally always the price but as mentioned could have a dud agent as well.
2 major boxes need to be ticked;
1. Security – being at 50% you are sweet there
2. Income – you will need to demonstrate income above and beyond all outgoings including living expenses which will leave you with surplus income that would need to cover the repayments at between 7-8% inmost cases.
In my view Melbourne has another to 4 years in the current cycle.
Very interesting and if that is the case then you could consider Melbourne over Brisbane for short to medium term growth.
Hopefully can generate some equity that you could then pull to purchase in Brisbane.
- This reply was modified 2 years, 7 months ago by Colin Rice.
Investors can assume that adding a 100k GF will automatically add 100k to the value of the property but this usually is not the case so be aware of possible over capitalization.
Or do the deal yourself with a Nodoc loan (No evidence of income required) and receive 100% of the profit.
Who is doing those @qlds007 ?
Is it via private funding?
Depends on who you listen to?
Some bank analysts are projecting 2 x interest rate rises in the next 12 months yet others are saying it will stay flat. I am of the later school of thought.
RBA will likely sit on their hands until they go numb or number and will have a “see what happens” approach before making any moves.
With banks no longer following the RBAs lead anything is possible.
Statement of info (SOI)
stipulates same range between $1.1m – $1.2m. Don’t know why but she never thought might be an issue
I would send a copy of the SOI to the agent via email with a “please explain” and if not satisfied with the explanation insist that the info in the SOI is congruent with the advertised price.
May be a specific and strategic reason for the agents capers so give them a chance to explain and if not satisfied take it further referring back to the original SOI.
Ask a local PM/Real Estate Agent to do an appraisal for you, both for sale and rent.
I would highly recommend you engage a PM to manage the property for you.
Check with your finance guy that you can service the debts involved with your current and future plans.
All the best.
The key with smaller complexes is the land to building ratio.
The higher the land ratio then the greater potential for capital growth, as land goes up in value over time and buildings depreciate in value over time.
Often the older style dwellings are located in prime positions with a high land to building ratios and worth a look for this very reason alone.
Find another PM to work with and consider not renewing the lease for the current tenants.
Property investing generally has 3 “business partners” in the equation;
1. The tenant
2. The tax man
In your case its #1 and they dont seem like an appropriate business partner so have them replaced with one that is.
Some resi lenders use “in line” and some use “end values” so the key is selecting the right lender to minimise the cash injection required. Small lot savvy brokers will know who is who in the zoo.
Less are going the “end value” route and more the “in line” method in my experience of late as the later presents less risk to the lender.
Nice, detailed write up Corey :)
Renting as opposed to purchasing a PPOR can increase your borrowing capacity depending on your individual circumstances taking into account your short, medium and longer term goals.
Rent is taking at actual repayment in a banks serviceability calculator where as PPOR debt will be calculated at between 7-8% depending on the lender.
To see what is better it would be advisable to seek the assistance of an investment property savvy mortgage broker before taking the plunge.
What was the name of the finance brokers at mega conference 2017.
Does anyone have any experience with them that their willing to share
Dont know as wasn’t there. Plenty of reputable brokers on here to choose from that will be able to assist if you shoot them a PM or email with what you need to accomplish.
(you mention 3.5% for an investment loan, obviously an example but you’ll be stretched to get any reasonable product near that rate and most close will mean you’re making sacrifices which will limit your ability to borrow again in the future etc)
Realistically it will be circa 4.5% on an IP depending on the lender and loan structure.
As Corey stated a second opinion would be a good idea.
Latrobe are pretty hefty when it comes to fees and rates compared to other lenders.
Once you ascertain you have no other viable options will the expected ROI (return on investment) potentially out weight the costs and risk involved in refinancing and assuming a “cash out” component as well?
Only real way to tell pre sub division is to look for comparable sales of similar properties and attempt to guesstimate the end value and then work out the LVR.
This is not an exact science and is where things can go realy well if you get it right and realy bad if you get wrong and everything in between.
Knowing the local market is what will dictate the success of your project and timing a market upswing is the sweet spot for development, if not you may have to hold for an extended period which isn’t necessarily a bad thing if holding costs are minimal or better still non existent or even better cash flow positive :)
- This reply was modified 3 years, 7 months ago by Colin Rice.
As Jess stated the lender you choose will play an important role. Some lenders will let you split and merge facilities post settlement where others require a full assessment to do so.
To avoid confusion with multiple loan splits I clearly label each split (via internet banking portal) appropriately and use the available funds related to that property only whilst being careful to clearly document each outgoing payment with appropriate commentary.