Forum Replies Created
- Charles 1 wrote:Have you checked out Metropole – they always seem to be mentioned and always good feedback: http://www.sydneybuyersagent.com.au/ It's a hard decision isn't it – what criteria are you using to chose the buyers agent you will use?
Be wary about using Metropole. They also sell their own properties so if you do decided to use them, do your due diligence and, if they are trying to sell you one of their properties, make sure that you get completely independent advice, ie, valuation, solicitors, conveyancers etc.
K
Phew. I happily stand corrected. Based on your original post, I assumed that you wanted to borrow $3mil to buy the property.
What I do stand by though, is my opinion that if six lenders don't want to lend you the money, there is obviously a real risk situation. Do you really need the money? If you do, and you have someone prepared to lend you the money at nearly 11%, then maybe that is worthwhile doing. Provided of course, that you can repay the loan.
I have several friends using private finance at the moment because they can't go through traditional lenders and they are all paying close to 15% pa.
K
Surely you are joking. But on the basis you aren't. Here is my opinion. Call me harsh, but I would be listening to what the banks are saying. If six financial institutions have rejected your application, maybe its time to rethink your plan.
A $3mill loan, at even 7% will mean an annual interest payment of $210,000 without paying off any principle.. The annual rental income from the properties is $36,400. Your entire pension is $15,600. TOTAL income of $52,000. The macadamia farm will need to bring in a net profit of $158,000 to just enable you to meet your interest payments. This will assume that you only eat macadamias and use no electricity or telephone or internet and don't spend anything at all because your entire pension will go towards the interest payments.
And how does three buildings on a property (with a total rental of approx $1000 pw) increase a property's value by $1.65 mill?
But again, I assume you are joking.
K
It is very difficult to get lending for a hybrid trust. Or at least it was a couple of years ago. Some of the mortgage brokers may want to comment on this.
Cheers
K
Solomon10 wrote:Linar, it would of been cheaper to re tile the area than paint it to "save money"….. Just a thought.No it wouldn't. A tiler charges a minimum of $40 per square metre. On top of that would be the cost of the tiles and grout and the labour for removing the tiles and prepping the surface. There would have been extra costs for cutting fiddly tiles. And, contrary to popular belief about the GFC affecting building, the tradies I know are busier than ever, so it would have been next to impossible to get a tiler in for such a small job.
A mate of mine who is a tiler is booked out until February next year. And we are about to start an extension to our house and several of the tradies we used for the reno we did 12 months ago aren't even interested in quoting because the job isn't big enough. And we are only keeping our kitchen for another couple of years before we build a new one so it just didn't seem worthwhile to retile.
But enough about me. My post was really just to let readers of the forum know the finished product of painting tiles.
Cheers
K
I would imagine that if you stopped "helping" the bank by refusing to try to sort out the credit card issue, they would eventually reject your finance application. It depends on why the bank is not yet approving the loan, but if they bank is waiting on you to do something about the credit card, then just don't do it.
Cheers
K
I've answered my own question by going out and actually painting the tiles. I used White Knight Tile paint on the splashback in the kitchen. It is a three step process, all using White Knight products; cleaner, primer and then paint.
I'm really happy with the result. I changed the colour from a cream to a bright apple green and it looks fantastic. I think the trick is to use all three products (even if you think you can save a couple of bucks by using a cheaper brand of a similar product). I used the best quality paintbrush I could buy to minimise the brush strokes. I think if you want a smooth glossy tiled look then painting over the tiles is not a great idea, but if the area you are looking to tile would still look good with a bit of a "handpainted look" then painting tiles could be the way to go. In some lights I can see the brushstrokes but standing back, they just look like green porcelain tiles.
The total cost was $100 and I think was excellent money spent.
Cheers
K
In this market I would want to see a minimum 25% return on total investment before I would consider buying a development site. If, for example, TOTAL costs for a development were $1mil (including land, stamp duty, conveyancing, building, interest payments, REA fees etc etc) then my total profit after all expenses would need to be $250,000.
One thing that immediately sprang to mind when you said it was an old factory site was that there might be environmental issues, eg soil contamination. See if you can get hold of the old DA and speak to council to get the goss on the site.
And when a REA tells me that a developer is selling because he has a "different project on the go", normally that tells me that there are problems with the development. Milk the REA to find out what the go is. Why did the developer let the DA lapse?
Good luck
K
dreamteam wrote:Has anyone out there set up a Trust and discovered they could NOT borrow any more than as an individual?
I am finding it quite difficult to borrow in the name of my family trust, despite the trust paying significant distributions every year since 2004. I am finding it much easier to borrow either in my name or through my company. Most banks don't understand trusts and find it all too hard to lend to them.
Cheers
K
I am a developer and even though I am not interested in this proposed deal, these are the sort of questions I would want answers to before I even considered looking at a deal
1. What would be the financial contribution from me for the land
2. Can the land be subdivided
3. If so, what size blocks would be most saleable in the area
4. What would the total value of the development be once complete
5. How much vacant land is in the area
6. How much demand is there for vacant land in the area
7. Basic costs for subdivision (you would need to go to the local Council and to a surveyor for these costs)
8. What sort of amenities are around that locationBasically I would want to know exactly what I was getting into. How much money will it cost me and how much will I make from the deal? How saleable is the property? What sort of timeframe will my money be tied up for? etc etc.
I suggest that first off, you approach the Council to find out whether the property is even subdividable and then go to a local real estate agent to find out demand and values once complete.
I hope that helps you start off.
Cheers
K
It all turned out with a relatively happy ending. After writing a three page letter pointing out how ridiculous it was to reduce the overall value for the reasons they have given, the bank has agreed that they have enough security in the property to proceed with the original loan.
Cheers
K
You will also need to contact the local council to find out whether you can build two houses on the one title. I live in a rural "watershed" area in SA and the local council won't allow more than one dwelling on each title, no matter how big the land is.
Cheers
K
You don't make any further offers until you have heard back about your first offer. As soon as you put in another offer without hearing about the first offer, you weaken your position and could make the vendor think that you have even more money.
The vendor (or the bank in this case) has three choices, either to accept your offer, reject your offer flat out or reject your offer and make a counter offer. Wait until the vendor does one of the three. You never know; your first offer may just be accepted.
Cheers
K
Hi Banker
I have a copy of the valuation and it clearly states that the value of each block is reduced by 10% because my company will be paying GST on the sale of each block. But what you are saying makes sense and I wonder whether the valuer has excluded the GST component because that is what would be done on a valuation for purchases. Either the valuer has gotten it wrong or the bank has given wrong instructions.
I'll put that in my submission to the bank.
Cheers
K
It turns out that the market valuation was higher than I thought but because of my company, the total value was reduced by 10% because of the GST I would have to pay. Then the total reduced value was then reduced by a further 20% to make it an "in line" valuation, that is, the proposed value if the bank had to do a fire sale. That makes the final valuation for bank purposes a 25% reduction in the original market value as set by the valuer.
The bank is only doing a 50% LVR on completion. The reduced value means that the bank will now have a 35% LVR.
I'll appeal the valuation and let you know how I go.
Cheers
K
Yes, as long as you can prove, if required, that they have charged an appropriate fee. And appropriate fee would be market rate.
K
Hi Banker
Care to share which lender offered the refinance deal?
K
I go wherever the money is. No bank loyalty here.
K
I agree with Terry. If the value of the apartment has dropped you could be up for a lot more than just the 10%.
I think you should go and see a solicitor and see if there is a way out of the contract. Did you know at the time you signed the contract that several apartments could be used for "holiday letting"? Would you have bought the apartment if you knew? There are lots and lots of questions and a decent solicitor may be able to get you out of the contract if it has been breached, or there has been a lack of disclosure or misleading information.
Cheers
K
Matt_Arnold wrote:Hi TerryIt's interesting that you hear in the media how the availabilty of finance is becoming more difficult, but the major banks will give you 95% LVR no problems with several of the small lenders moving back to 95% + home loans…
Matt
I went in to one of my banks yesterday to talk about refinancing a property and bringing the loan over to them. The bank manager, whom I know reasonably well, came out and kissed me on the cheek and told me how hard the lending manager would work to try to get the loan over the line. When I spoke to the lending manager (whom I also know reasonably well) I felt like I was just about begging for the money. All I want is a low doc 60% LVR on my PPOR. It's not that hard. Yet I still left feeling like the bank wasn't going to be able to do it.
Just because they advertise products, doesn't mean they are going to give them easily.
Cheers
K
