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joshadelsa
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August 30, 2006 - 8:48 am
yeah I’m the same I was stupid enough at the age of 18 to get a $15,000 loan for a car. was good at the time but looking back it was the worst thing I could’ve done.
Got rid of it about 2 years late and it had gone down by about a 1/3 and didn’t even cover the loan cost.[glum]
Good work for saving $8,000 originally, thats an effort in itself.
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joshadelsa
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August 30, 2006 - 8:38 am
As far as I’m aware JohannP, there isn’t away to exscape transfer cost however best Idea would be to contact a local conveyancer or property solicitor and they will give you the advice you’ll need to make a descision.
Joshua
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joshadelsa
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August 29, 2006 - 12:17 pm
I believe westpac have just released 85% LVR with no LMI a few weeks ago…
somthing to look into.
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joshadelsa
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August 28, 2006 - 12:01 pm
hey draconisv
a car may come in handy to get into property in a couple of ways, some more obvious then others…..
1. sell it – down size, use the difference on property.
2. lease against it – I know one lender that will allow you to use a car, equipment, machinery or other ‘assets’ and lease against them, to make up a certain amount of the deposit needed to purchase the property. Usually this may be used for farm or similar purchases where it is harder to get a high LVR and you can use this method to reduce the deposit required. For residential I can’t really see the practicality in using your car for this.
3. stronger A&L – if you have a unencumbered car it may strengthened you asset and liability statement slightly.
Apart from that I can’t really see much other ways that it can assist.
anyone else got any ideas?
Joshua
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joshadelsa
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August 28, 2006 - 11:40 am
in relation to the favourable purchase question….
some lenders will lend 100% of the purchase price + fees/charges if buyer under market value.
For example…
had a friend who was living in a brother in laws property and had done bit of work on the house over the 2 years they’d lived there so they negotiated to purchase the property at $250,000 where the actual market value was $330,000. In this scenario the lender was willing to lender 100% of purchase price +fees/charges.
something to think about.
Joshua
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joshadelsa
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August 28, 2006 - 11:27 am
I didn’t know about the 6 years thing with out CGT. thats a handy piece of information.
Joshua
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joshadelsa
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August 28, 2006 - 6:58 am
Giulio,
First of all good luck with the new store, hope it all goes well!!
I’m not goin to try and offer any assistance with design etc because it would just suck…lol
but from a business point of view, I used to be Store Manager of a maccas store and all I can suggest is make sure that you have the systems in place for the business to be able to run successfully without you. My local Fish n Chips shop is owned by a really nice couple who have owned it for a couple of years now. Over this period you can just see them getting more and more exhausted and run down as they work in the business allday, everyday. Its really sad to see the change.
you seem to pretty smart in the fact you are workin ON the business not just IN the business and I commend you for that.
I think the biggest thing thats going to draw customers back is consistent high qaulity product and service over and over again. I certainly would become a regular client [exhappy].
could keep writing but that’s long enough….
Good Luck Mate.
Joshua
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joshadelsa
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August 27, 2006 - 11:18 am
when it comes to the finance side of things.
LVRs that lenders allow on student accomodation are usually low meaning you have to more capital to put into the deal and considering this being your first deal, might not be the best solution for you.
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joshadelsa
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August 22, 2006 - 1:17 pm
hey elim,
thats a pretty in depth question and would take forever to answer in detail but simple steps would be …
1.) Find a property
2.) Do research of local area
3.) once research area make an offer (with certain conditions)
4.) offer is then accepted or declined
4.) If accepted, contract of sale will be issued and signed
5.) If accepted the if you didn’t state in offer the vendor or agent will set a finance date, in which you need to have an approval letter.
6.) If offer accepted find a broker to walk you through the process.
7.) Broker to submit application
8.) condition approval given (usually 24-72hrs)
9.) conditions met (usually valuation, LMI approval, and any extra supporting docs.) (up to a week depending on valuation etc)
10.) Unconditional or Formal approval issued (24-48 hrs)
11.) Loan Offer docs written up by lender’s solicitor and deliver to client for signing
12.) once loan offer docs returned to lender, they certify docs and are usually ready to settle within 2-4days
13.) Loan settlement occurs
14.) property handover can occur
phew … thats simplified but gives a general idea.
It’s imperative that you find a broker that will assist each step along the way and that will assist you have settlement also if there are any post settlement issues that need to be sorted out.
There are few fees involved apart from stamp duty however each state is different so this is where a good broker will be able to assist you with a estimate or qoute for fees and charges.
Good Luck
Joshua Flack
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joshadelsa
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August 22, 2006 - 12:53 pm
Did you keep the deposit?
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joshadelsa
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August 22, 2006 - 12:38 pm
yeah I had an offer turn downed this afternoon, it was verbal and was told if I would like to make a new offer that closing time was later that day.
I decided not to continue.
It was in adelaide where theres many opportunities out there.
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joshadelsa
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August 22, 2006 - 1:47 am
thanks Gerry,
Interesting article.
Joshua
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joshadelsa
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August 22, 2006 - 1:31 am
Yeah I agree with Derek,
He may’ve also meant the person you may be looking to sue may have there assets wound up tightly in Co/Trust structures that the are adequetly protected from litigation. In otherwords if someone were to go spend thousands on legal fees and possibly cause financial hardship is it even financially viable to sue the other party in question.
I’ve heard a lot of investors use the mentality of ‘own nothing yet control everything’ by having the Co/Trust structures in place. That way if someone did try and come after your assets, you effectively own nothing yet control and reep the benefit from those assets.
Good Tax accountant would be better to get more info on this.
Thats added to my guess anyone else.
Any other thoughts.
Joshua
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joshadelsa
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August 21, 2006 - 1:33 am
yesterday I actually did the opposite.
I offered higher then the asking price because my offer included a vendor finance arrangement in there as well.
The property had massive potential to add value to it so I wanted to hold onto my capital to do renos etc. and do a no money down deal and extract the equity out later.
I offered higher so that it would be win/win situation for both vendor an myself.
It hasn’t been accepted yet but hope to hear back later today or tomorrow.
Lets see how it pans out,
Joshua
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joshadelsa
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August 21, 2006 - 1:26 am
Good Questions Dan,
Equity is only ‘equity’ until you draw down on it or borrow against it.
In your example if your property did go up $50K and you wanted to use that, you could take cash out option which would instantly change the principal value of the initial loan or borrow against it with a LOC (line of credit) which you can draw down on as needed. So each time you draw down on it your equity is effectively decreasing and principal loan value increases. LOCs can be an effective tool as you pay interest on whats drawn down, which is unlike the cash out option where you pay interest on the bulk some you have extracted from the equity.
When people use 5% for frees and charges it usaully includes Stamp Duty as this is the major cost in most circumstances. It varies from state to state but is usually 4% I think and then approx 1% for misc fees (ie. legal fees, settlement cost etc)
I hope I’ve explained that right.
Anyone else got simple ways of explaining this?
Happy Investing
Joshua
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joshadelsa
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August 20, 2006 - 5:14 am
definately agree with DLPP.
option 2 sounds like the way to go
Joshua
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joshadelsa
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August 20, 2006 - 5:12 am
Marco,
Sounds like a fantastic goal.
Look forward to tracking your progress.
Good luck mate
Joshua
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joshadelsa
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August 20, 2006 - 5:08 am
Good work DraconisV for wanting to get in the market so young.
All the replies so far are great, I hope you don’t mind me adding in a little info also.
As bravesparrow was saying there are things the banks require and they are sumed up in the accronym SLICE
Security – Obviously a property
Location – All but 1 bank/lender have postcode restrictions and what sort of LVR they will lend against certain securities
Income – depending on the bank depends on what size loan they will let you take out. Some banks have very leanient servcibility calulators while others are a lot tighter. With parttime employment as long as you’ve been there longer then 12 months most lenders will be ok with it. Plus with rental income coming in, if it’s an investment property, this will help servicing also.
Character – Basically if you have a credit issues on your craa it reduce your finance options as a lot of lenders won’t even touch it. (ie. defaults, judgments etc)
Equity – As Bravesparrow was saying you need a deposit. there are a few banks now that will let you use the equity in your parents home or investment property as deposit for your property. This is call Family Pledge or Family Equity (basically a form of security gaurantee)
LMI can be an issue however you could add up how much the LMI was and work out home much more you’d have to pay avoid paying that, and depending on the circumstance it might be worth paying it.
e.g if LMI was $1000 and you had to pay an extra $10,000 to avoid paying that it might be a cost that will get you into the market. It’s also tax deductible if investment property.
Couple of things to think about.
Good luck mate.
Joshua
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joshadelsa
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August 18, 2006 - 7:18 am
interesting point …
thanks for the info I’ll take that on board you’ve obviously had more experience with this topic, and you have put some great info in there.
I’m going on what I’ve been told and will look into it.
Thanks foundation.
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joshadelsa
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August 18, 2006 - 4:21 am
Thanks foundation I agree with you..
you do need to sort the real facts from the BS.
With properties doubling every 7-10 years , It is fact and if you look back over the last 200 years in australia it is a continuing trend that keeps repeating. Research yourself and you’ll find out its true.
Obviously in some areas it booms while other ares are more stable.
With Leveraging its common sense…. just need to do the figures with what you got.
For example ….say someone had $50,000 cash and wanted to put it into property.
If you put $50,000 into a $200,000 property your LVR would be approx 80 %
(Value:$200,000 Mortgage: $160,000 Fees/charges: $10,000 Deposit: $40,000)
If you leveraged your money to buy 2 properties @ $200,000 the LVR would be approx 92%
(V:$200,000 M: $185,000 F/C: $10,000 $15,000)
Total would be assets of $400,000.
These are just general figures however if you crunch some sums $400,000 will have a larger captial growth then $200,000. Effectively this would greatly increase your return on initial investment.
Hope this helps justify the comments earlier.
Joshua
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