Forum Replies Created
Sorry thats meant to be P&I.
I went to the NAB for a meeting and have to say have come away bitterly disappointed as they have used an interest rate of 8.25% IO for there calculations. I understand you have to play their game but come on how is anyone suppose to get ahead?
I have been told GJ Gardner in Ipswich are quite good. I have used them in Toowoomba. I think from a quality point of view its best to stay away from Dixon and Co. The alternative is to go through the phone book or using forums such as this. Give a builder a call and ask if you could have a look at some of his recent work.
All existing properties are in my name. There is no drama what so ever putting the new property in to my name from a finance point of view but I just wanted to steer away from this and start putting them into a trust.
I was going to take this new property to another bank with the deposit coming from the LOC but as NAB have me by the balls this isn't possible.
The LOC is for investment purposes. I can service the loan and the equity is there.
Oh well I will find out today regardless.
I understand bank valuations are tight and that you can get your own done etc etc. I just couldn't see the method in their madness of one going down and then one 1km away similar house going up.
So its not entirely true then?
Thanks Terry. What sort of LVR will they offer due to it being a company?
Are you able to pay GST as an individual or do you have to set it up in a company name?
Hi Ben,
I too am new to the area of developments and had the same question myself aup until early this year until a mate and I sat down and looked through hundreds of properties all over Australia. We looked closely at some conducting feasibilities etc etc. It is definately possible but you are right there are deals out there that don't stack up but people still buy them.I have found that to get the ball rolling it is best to start off in areas that are a fair bit cheaper. ie Satellite Citys. This keeps your initial cost down. Areas that I tend to look at are Ipswich, Toowomba, Ballarat, Bendigo, Burnie, Devonport, Launceston. These areas often have larger blocks that can be subdivided and developed. In esscence by subdividing you get a block of land for around 20K. The 20K being for subdivision costs.
Where land is bought only I have found for a small development 2-3 units the figures do not stack up. And the more units you put on the land (pending council zoning) the more risk involved for the bank particularly if you are small developer like myself. My best advice to get started is to do a subdivision and put 2 units on the rear block or even a house if the figures stack up.
Banks are being very tight on developments at this point in time. Another major hurdle is convincing them you have enough income to service the loan during building. Which once again limits how many units quality you can build in turn affecting the 20% figure.
You could also consider keeping one if selling one gives you enough cash to start up another project.
My bank has mentioned that after this current development (I wish to keep them) I will have to reduce my debt somewhere along the line. I have decided that I am going to sell one of my existing properties which is post war home. The main reason for choosing this one (other than it underperforming) is that the depreciation benefit is no where near as good as it will be on the new units. I will continue this process where require. Sell older property to keep new property.
I have heard Carly talk about Option agreements which are great but hard to source when you are starting out.
Keep asking questions and talking to like minded people it is the only way to learn. Michael Yardneys book is a good read and there is also a online Chapter 27 Developments which isn't included in the book.
All the best.
Thanks Richard. I don't think that is a bad thing dealing with you only from the massive amount of knowledge you have.
Thanks for your replies. I believed the above may have been the case but it has now confirmed. I will just have to ride it out this time
and re-assess for next. It was the time frame that the lonas were taking that was the concern frustrating.I will give the scenario.
My girlfriend had no deposit but has bought a brand new property in Ballarat for 207K and by using the FHOG, Boost and Rural
bonus plus a few thousand of her own funds can get the LVR under 85%. The contract was signed (21 day finance clause) and
handed over to the broker 29 Sep, valuation conducted on 12 Oct and as at yesterday we were still waiting for an approval.
I contacted the broker yesterday and he stated the approval would be at least another 3 days away. NAB Homeside is the lender.
My GF has a 70K a year job 6 years at the company and a 10K pers loan with NAB.After having numerous people tell me that brokers take to long including our solicitor I decided why not have a redundancy plan and
so when we visited a home show earlier in the month we decided just to ask CBA if they lended to 85% LVR no savings history.
CBA said no dramas and had unconditional approval within a week.I should have conducted more research for this loan but I did not think that a bank would look at her and a no
My GF would prefer to go with NAB as all her other banking needs are already set up there. So you can see my frustration.
I do think that I need to stick to a broker for the JV and my Portfolio. Maybe I have gone wrong with a big company.
As I would assume they would take almost anybody on where as smaller firms would take more experienced brokers on board?
Do small broking companies work commission based as well?Richard you mention you have interstate clients. Do you have any offices in Melbourne or is it all through your Brisbane office?
Lalibella wrote:Hi Fredo, I think you have answered your query yourself in the fact that you are refinancing a complex loan. I'm also refinancing at present and have used a MB for years and will continue to do so.
Things have clearly changed and the time frames have extended significantly so dont be too hard on your MB.
The level of scrutiny this time around is much more than anything I have experienced before. We have a stable employment history, multiple properties, low LVR, no other debt, wear cardigans, watch ABC. Tick all the boxes!
Its always difficult if your in a hurry. It will happen…Thanks for the reply. Although the loan is somewhat complex the time frame still appears to be extreme. I just feel I could have
visited the banks myself by now. I will stick it out this time and weigh it up next time before using a broker.Thanks Scott. I am aware of the time frame it takes. That is my second option what you have mentioned. However my mindset
is there is no time like the present. And as such my goal is to have a couple of developments complete before my move back to
QLD. With these developments complete I would look to live off some of the money made off the developments in order to cease
my current employment.I am new to this website and would firstly like to say its fantastic…. It may take a while to sort through all the topics but well worth it
I have recently set up an ABN (without proper research) is it as simple as putting a property into a bussiness name or is more
complicated than what it seems on top of making finance difficult as my Job is the primary income source….
