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Building isn't really an option. In the last 6 months things have changed heaps in Muswellbrook and for what I would spend building I could be negative gearing possibly a couple hundred a week. The vacancy rates have sky rocketed too so getting it rented out is a long shot. Definitely need to sell.
Thanks for the advice guys it has been appreciated. I have a few properties to look at on Friday and I will still go through with doing so. I won't be sourcing any creative lending in the meantime though I will just let nature run it's course regarding my land and see what happens from there.
Once again this forum has proved very helpful to me.
Thanks for the advice guys it has been helpful. If I can manage to buy a property soon I will get the credit cards while I am on a higher wage then I have the option of using them on a lower income. Once the renovations are done and I pay off the cards I'll get rid of them.
Thanks for the input mate. So overall lot reconfigurations are usually cheaper? If that is the case I may chase them further.
Thanks for the advice guys ill take that into consideration in the future. So the credit card isn't too bad? What if I were to take out two cards with $15k-$20k limits each, one with interest free period (45-60 days) and 0% balance transfer (3-5 months) to fund a renovation?
Qlds007 wrote:Sure Matt drop us a line or call if easier.Going back to the numbers what you have to bear in mind is the acquisition costs associated with a Qld purchase.
With a 30K deposit you certainly aren't going to be buying 2 properties at the same time as the deposit and acqusition costs alone will make a significant dent in your savings.
We deal with a couple of lenders who might look at a 100% loan but going to depend on a couple of things.
Hate to say that LMI isn't transferrable.
Cheers
Yours in Finance
Thanks mate Ill give you a call once i find a buyer for my land. I will probably scale back to just the 1 for now anyway. Our work is downsizing so whilst I have my job now I'm actively seeking other employment with the possibility of a pay cut, one would be ok for now. I'm just a little impatient haha. I'm intrigued about the 100% loans?
TheFinanceShop wrote:This would not score well particularly when there is only one applicant. I would avoid a lender that does auto credit scoring. Go with a lender that will not credit score. Plenty out there. Also you need to ensure that the overall application is strong.Which are lenders that don't credit score? And do they charge additional interest? I have a credit card with a limit of 2500 that is paid regularly and took out a personal loan of $22k about 3 months ago
Jamie M wrote:Duplicate thread – already responded in other thread.Cheers
Jamie
Yeah mate just a bit of a technical area on my part haha
The LVR would be around 95%, just myself as the applicant
Thats understandable Jamie, thanks for the insight. Just trying to find out as much as I can about my options so I don't make a dud move!
Thanks Jamie, yeah I would be borrowing with 5% deposit. I have been in the same field for over 2 years with a 5 month break and another 18 months really.
What are the specifics you would need to know? It is a very hypothetical equation I know.
Qlds007 wrote:Hi MattOk if you have owned before then hate to say NO you wouldn't get the S/D concession or indeed the Building Grant.
With $30K it depends on what you are trying to achieve from your purchase / s ?
If you want to spread it across a couple of purchases then your choice of finance is quite important.
There are a couple of options to reduce your LMI premium yet maximize your borrowings depending on your repayment ability.
Limited deposits are a killer for many investor going forward so you need to be creative and inventive going forward.
Cheers
Yours in Finanace
Thanks for the reply sorry for not getting back sooner I didnt realise there was a new post. I would like to spread it across a couple of purchases. I know my borrowing power is 550-600k so maybe a house around the $250k mark to start and also a unit around the $170k mark.
ideally I would like to buy and renovate within approx 6 months then sell. My goal is to realise gains in equity through renovations to build up a deposit large enough to buy commercial property which I may develop in some way and then keep long term. Residential property is only something I would like to deal with in the short term (3-4 years). I am interested in the options to reduce LMI?? I am new to the concept but have heard of ways to basically carry over your LMI to another loan?
Maybe I should give you a call sometime as I'm in the market for a broker?
Thanks for the comments guys. I have been doing lots of research lately and Harristown and Newtown both came up on the radar like you said being that they are very affordable with tenants ready to go. It is likely Id renovate and flip if possible for my first couple then get something a bit more solid for the rental income. Hopefully I can buy something within the next month or so, just playing the waiting game while my land is up for sale here in Muswellbrook.
Qlds007 wrote:Hi MattCouple of quick points that might be worth thinking about.
1) FHOG has been and gone and has been replaced with $15K Great Start Grant. As long as you move in with 12 months and live in the property continously for 6 months you should qualify. Course assumes that you have never owned another property in Oz before (PPOR or not).
2) Your property will only be valued at land cost + fixed price construction cost by any lender. Sure might be worth more but you wont be able to access the available equity.
3) Stamp duty concession will not be available if you don't reside in the property from day 1 however as it is based on land alone wont be a killer.
Course you need to factor in the sales costs, interest whilst you are living in the property etc.
Seems like a lot of effort to get into the market when with 30K you could start to build a decent investment portfolio especially with some clever use of your capital.
Cheers
Yours in Finance
Thanks for your advice mate it is appreciated. Seems I've been slightly misinformed on the FHOG, I guess living in Muswellbrook, NSW for the past 18 months or so means I'm not as exposed to the news in Queensland as I once was. I was meaning stamp duty towards purchase of a property but from what you're saying if I own an IP beforehand it means I'm not eligible anyway. Not a real big problem, was just trying to see how best to take advantage of any grant/concession available. I had a stamp duty exemption of $5000 down here when I bought my land which was great cause it only cost $3700 so the remainder was given to me in a cheque.
Those points taken into account, what do you think my next move could be? Once my land sells here in a month or two factoring savings like I mentioned I may have something around the 30K mark to invest.
I live in Muswellbrook for now but will return home (Brisbane/Ipswich) in about 18 months so would prefer to invest in the south east queensland region for that and since prices are quite low at the moment. You mentioned with 30K capital to invest that could go a long way? Can you give me any suggestions?
Thank you once again.
taxdiva wrote:Hi Matt39I have been very interested reading your journey with investing and impressed you are starting so early. Wish I had started earlier. I have an IP in Brook St Muswellbrook and looking for some local opinon. The property is vacant and has been since Feb. It is a 3brm in the heart of town. What are your thoughts on the outlook for the coal jobs. I am still very confident the Hunter will come back into vogue so just looking for some reasurance from a local
Thanks taxdiva, I would have started earlier if I could have, but now I am trying to make hay while the sun shines. I will give you my personal opinion, this may not be testament but this is what I believe. Jobs down here have slowed up quite a lot in the past 6 – 12 months. I work at Ravensworth and for the past 18 months or so downer have been upgrading that facility which brought 100's of jobs to the area. Construction in the area has slowed up so the only jobs going are for maintenance. I have been very lucky where I work since I have been there a while but lots of people here looking for work are struggling. Also there is not much FIFO out of this area because the area is well populated enough for the workload. My mortgage broker had a house near Aldi and was renting it out fully furnished for $900 a week, this made me want to buy a block of land and build, but just before I decided to build i found out hers is now up for rent for $400 a week and she cant get anyone in. Rents have dropped and vacancy is high at the moment, there are many vacant houses.
I am now looking at Toowoomba and other areas in Brisbane, because I'm from Queensland, for something more solid. In my opinion the hunter may pick up, there is still lots of coal but with prices and taxes on coal its unlikely in the short term it will boom again like it has in recent years. Figure out what is best for you but it might be one of those ones where you cut your losses and move on to something out. Possibly ask some real estates down here for their opinions.
Hope it all works out for you
Thanks for your opinions guys they are more than appreciated. JPS I think I summed this up in my comment on the other thread but I have decided to shelve the Chinchilla idea for reasons you guys have covered. This will be my first IP so something stead that is gaining equity and allowing me to move onto another project is what I need now, and something that I can afford to sell if things are working out or I need to free up borrowing power/cash etc.
Toowoomba is the area I am currently looking at. A diverse location with links to, but not solely dependent on mining, growing population and if prediction are accurate should begin to grow with the rest of brisbane etc.
Shape wrote:2. Servicing rate is based on current standard variable rate + 2%
So are you still positive after increasing the rate to 2% and taking in gross rent of 70%?
Can you explain what you mean by that? Please forgive my ignorance
Thanks for the reply JPS and Shape your comments are appreciated.
JPS since this would be my first IP I have decided to can the Chinchilla idea for now. Seems to risky just now and I shudder at the thought I may have a house that I ultimately can't sell in a few years. I do not hope this happens to you but just your comment about houses sitting vacant is enough to make me try another avenue. I am leaning towards Toowoomba for the stability. I have consulted a real estate agent and 4 bedroom houses rent close to or over the $400 mark so looking into some house and land packages in Sanctuary Rise (Wilsonton). I am sure mining towns make people money from their properties however it is not for me at this stage, I do hope yours performs well.
Qlds007 wrote:On a separate issue are you sure you can get a 95% lvr in Chinchilla?Done a few deals up there and must admit off the top of my head didn't think the MI would go past 90%.
Certainly if it is Gemworth they wont be doing in interest only these days.
Course always happy to be proved wrong by 95% in a Trust structure call me old fashioned or what but not from where i am sitting.
Cheers
Yours in Finance
Im interested to know more about your deals in Chinchilla and how they are performing/risks involved? Some feedback I am getting is all for it and some think Im better off invested elsewhere?
Jamie M wrote:Most lenders will take somewhere between 75% to 80% of the gross rent for servicing. Therefore, the higher the rent, the better your servicing. The only caveat being certain postcodes/areas where lenders have placed restrictions on the percentage of rent they'll consider.Jamie
Thanks for the info Jamie. What sort of areas do they have those restrictions? I'm looking at purchasing a house and land package in Chinchilla, do they not like mining towns?
Qlds007 wrote:Matt a $200 positive gearing i assume that is per month.Are you sure it is not a Display home with a leaseback arrangement or similar and if not you must be putting in a decent sized deposit.
Are you sure you want to put that much in ?
Remember over and above the cash deductions you will also receive non cash deductions you can claim such as Capital Allowance and Depreciation claims and this will aid your bottom line in terms of cash flow.
Cheers
Yours in Finance
That is weekly but only on interest only at 5% deposit. It's likely ill have to contribute 7.5%-10% because of the area it is in.
Although it may not be $200 a week (that would be furnished) but $100 a week from what I'm told is not unachievable.
It is a house and land package, the land is only getting registered towards the end of the year.
I don't know what you mean by a leaseback agreement can you explain that please?
This is why im enticed to build as I will save on stamp duty and the depreciation on a new house im told is quite good for your claims (maybe $5000 a year?)
