Forum Replies Created
Hi Mark
Wasnt suggesting you offer any lender security over your home merely pointing out that you would want to disclose it on your appication as it will add weight to the deal.
Always a good idea to look at the last 2 Years actual Tax Returns as well as the last quarters BAS.
This will give you more of an idea as to what the real numbers are.
Good luck in your negotiations.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Mel
Feel free to drop me a line with some basic numbers and i can tell you whether you can still go forward.
You can then decide whether you want to sell any of the properties within the portfolio.
Personally i try to adopt the adage never never sell but understand sometimes it is required to keep going.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Stamp duty is totally separate and nothing to do with the loan amount.
You are borrowing against purchase price / valuation only and the balance of funds needs to come from your own pocket whether that be cash or equity.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Simone
Dont want to put a spanner in the works but you will not finance a deal like that with only $100K to put down.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Mark
Ok first look the basic numbers appear ok in regards to lvr (although of course you havent mentioned the actual purchase price but will assume it circa $850K) and you asset backing is adequate.
Whilst you may not wish to offer your existing residence as security you will still need to disclose this as an Asset on the application form so any potential lender will know about it. I assume this property will be rented out and you will reside in the Motel so the rental income will aid serviceability.
Lenders look at a variety factors when it comes to Commercial lending but your experience albeit not in the Motel industry will be important. The net income quoted i assume is before any salaries are taken out but again fairly meaningless as without the actual Audited Accounts could be based on anything from Nil to 100% current borrowings.
Only issue i can see with certain lenders is the locality of the security as Motel lending in treated as specialised security by many lenders and Tassie is not high up on the list. Course many others would have no issue.
Not a bad starting point but additional information needed to advise further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Maybe i am in a lucky position that all of my properties are owned either unencumbered or the odd one with a loan is still positively geared but i have to say the only reason i would sell one of these is as Jamie mentioned would be to replace it with something i though would grow at a quick rate through capital growth rather than income.
Changes to legislation in regards to negative gearing could certainly have a bearing on cash flow however i think as the Labour Govt of the 80's experienced all landlords would do is increase across the board their rents to nulify such action.
Cashflow is certainly king in the current climate when fixed interest and Term deposit returns are so low however not at the expense of growth. To buy a property yielding 7% per annum is no good to you if the price is stagnant and inflation is running at 5% when you could buy something with a lesser yield and get 6% per annum in the way of capital growth.
Remember income is Taxed at your highest marginal rate (odd exception excluded) whilst Capital Gains can be Taxed at a concessionary rate starting at 10%.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Legend like Terry i am slightly confused.
If you already occupy or intend to move back into the property you mention and use this as security for the new investment property then no problems at all.
If you then intend to move into this new investment property then the rent you receive on the current property with minimal mortgage will be added to your income and Tax paid on this. The only interest you will then be able to claim is the interest on the $20K loan.
Loan needs to be structured correctly to cater for your requirements now as well as into the future.
You are unable to redraw the available funds on your current property, move out and claim the interest as a deduction.
If i am totally off the mark please let me know and we can revisit the question.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
AJ, agree with the boys would try and maximise your borrowings whilst you can.
Assume you are employed rather than self employed?
If you are buying an IP you would also be able to factor in potential rent as an income although would need to take the corresponding rent / board liability as an expense.
Course without further hard data difficult to advise you further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Paullie
Yes when one member ceases contributing then their share of the overall fund is adjusted.
This is the same when the fund is formed. Assume husband rolls over 70K and wife 30K then future growth is apportioned accordingly. This is then adjusted each and every year depending on the individual contributions made by each member over that year.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Seek Professional advice as selling the property into a Family Trust is unlikely to be cheaper.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sash – No not all lenders capitalise LMI as Terry mentioned.
If it was deducted on Settlement this would have been outlined in the letter of offer which you signed.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Schmoo
In essence the figure would be
Net sale price say $340,000 (After agents fees etc) minus
Original purchase price after Increased adjustment for stamp duty paid and decreased adjustment for Capital Allowance previously claimed. Assume – $290,000 anyway.
Capital Gain = $50,000 / 2 = $25,000.
Assuming you had held the property for > 365 days then you would qualify for the concessional rate so 50% of $25,000 = $12,500.
Tax on $12,500 x 40% = $5000.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi w8
Sorry to hear the issues you are having but i hate to say it is very common with the CBA and especially when you have the 2 loans crossed together (Existing forum members will now this is my big pet hate).
Without solid data it is difficult to comment further but it does sound like you might be digging yourself into a deeper mess.
Might be an idea to look at cleaning it up before you look to proceed.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi both
I will make some enquiries for you and come back to you.
Are you both Australian Residents / Citizens.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Adzlea
Just on a financing point of view you may well struggle to get 95% lvr in Moranbah.
Course as mentioned not to say you wont get a high lvr but need more hard data to provide a more structured answer.
I have a forum client who was getting $1000 / week in rent until Jan 15 2012 when the 12 month lease will expire. She already has someone want to sign up for $1995 / week for the same property.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi both
Yes it might be possible.
We have a few lenders we deal with who may look at it depending on a few things.
What did you pay for the property ?
US Lenders i deal with have a minimum loan of $100K USD and maximum loan of 65-70%.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Sash
I am with Terry mate i cant understand a word of what you are saying.
The letter of offer you would have received would have set out the Gross loan amount and all of the costs including LMI which would have been deducted on settlement. The letter of instruction you signed would have set out how you wanted the available funds distributed.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes agree Jamie
The response confused me so hate too think what Tiger thought.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Heh Ems
Would do but the trouble is your Broker might not be able to finance them for you lol.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Adzlea
You are bang on in understanding you need to plan and structure to enable you to move forward as so many clients i see have no idea and just go on their merry way.
Structure is the key to property acqusition and i must say without it i wouldn't have been able to acquire 40 properties by the age of 40 giving me a very nice passive income.
It is the same principal i used i try and use for my forum clients so they can grow their portfolios.
As Derek has mentioned there is limited data provided in your situation so difficult to comment further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
