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Borrow the money on one hit using a LOC or a 100 % interest only offset acct. Depending on lender may go as high as 95 % Interest only.
Worked there many years ago.
Tends to be more of a one co town than say Kalgoorlie which is far more cosmo.
Have aclient thats getting 18.6 % rental rtn in Kal.
Has anyone invested in Mt. Isa? Seems to be some positive cash flow units, but the takever of MIM by Xstrata seems worrying? What are your thoughts, anyone?
I know people that have done well with either strategy so my two bobs worth is ” no it doesnt matter” with one simple caveat – know what your risks are and manager them appropriately.
Last year might have been a good time to buy. It would have been a better time than right now because you have 20/20 hindsight and in many areas of Sydney the market has moved on over 20 %. I remember about July 2000 when the markets were “inflated and were going to suffer a post Olympic lull” Nothing much in the fundamentals has really changed since then, EXCEPT that rental rtns are now lower and orices are higher.
As has already been pointed out the issue of a tennant is your main concern. Yes a wrap alleviates this to some extent, but there are many wrappers that are sitting on a good capital gain over the last 2 years had they gone buy and hold.
The housing market vs the unit market in Sydney is still showing low vacancy rates, though with decreasing returns. In any case you cant expect 20 % growth and hope that rents will grow at the same rate.
If you cant hold the property at 10 % vacancy then perhaps its not an investment you should be making at this time.
Hope that helps
thanks for the welcome !
Such people shouldn’t give up… they just need to either…
I would not disagree with that. I say if it cant be done it will be.
The major issue that newbies will run into here is joint and several liability. Most lenders if aware of the contingent laibility will assume it is a drawn debt, BUT will make exceptions based on the likelihood of that guarantee(s) being called.
Good to clarify that it wont work for all and sundry, after all I would think that you would not be Joe or Josephine Average !
Most of the application forms and requests for information that I am familiar with have some very specific question such as contingent liabilities, guarantees on loans and leases etc. Indeed when a lender does their directors check on the guarantor they would usually come back with a raft of questions. This goes back to what you said earlier about not everyone being able to maybe make this work for them. It is obvious you have an excellent relationship with your lenders which is not easy to cultivate. Rememeber who you are in your professional life and understand this lends you lots of credibility.
Steve, it was never implied that you would be hoodwinking people, I do a lot of trust based lending and yes such structures are commonplace.
JUst in closing there is no conflict, just differences of opinion where people can learn. Just the act of the discussion alone provides much information.
“Everything there is fine, but I just disagree with Rolf said, because in my experience there is a big difference between a guaranteed loan and a real loan.”
Its good that people disagree, Im the first to realise there is more than 3 ways to do the same thing, and I like to see people do things that “cant be done”. All thats usually required is for me to say it cant be done and someone proves that to be wrong.
On that point, can you define the difference between a guaranteed loan and a real loan where start-up company loans are involved, where the directors have either minimal funds and or experience in property related projects ?