[Mick CParticipant@shapeJoin Date: 2010Post Count: 1,099]

June 21, 2014 - 2:52 pm

Yep will come down to the area….

Northwest, South and inner west generally ok – like Dundas etc..
Some western areas- like penrith, Wilmot etc..average increase is around 60% of the total cost to build…and we are talking about re-value 1 week after build not 12-18 month later etc..

• This reply was modified 9 years, 10 months ago by  Mick C.

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June 21, 2014 - 10:38 am

Experience. and having some runs on the table ie previously projects and results.

Development is like a business…it all starts with an idea and as you know 90% of small business fail in the first 2 years and the that one makes it; only 50% make it past the 5 years mark. All good that you have all these ideas and business plan written up; but action speaks louder than word.

I deal with a lot of private money exp from china and singapore and all our investors and angel investors including myself look for experience and previous results = stability of return. We rather receive 20% return knowing 95% for certain we will get our money back VS 70% return and JV-ing/lending it to some long shot.

• This reply was modified 9 years, 10 months ago by  Mick C.

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June 20, 2014 - 9:24 am

SMSF would be diff to the company you want to trade from as the SMSF is a non trading entity and structure.
Also when you do end up buying something with your SMSF the company bear trust can only be used once.

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June 14, 2014 - 12:03 pm

Is this ABL direct or through a mortgage manager ie an online or indirect channel of ABL?

If it’s an indirect channel than ABL has a $20,000 credit card they can provide to your friend for any short falls at home loan variable rates for the life of the loan.

2nd option is to get a copy of the val and find out where the valuer is depreciating the construction cost…i have a feeling your frds construction quote has a lot of modification and adjustments – adjust the quote as required and make the mod later on if possible ( ie for some reason Heated floor tiles is a must and that’s like $15,000 in mod…)

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June 14, 2014 - 11:57 am

CallieFort wrote:

Hi all
Us folks in Perth are not used to hearing about company titles, so now hubby and I are in panic mode….apparently only the CBA will offer a loan to purchase property on a company title.

Very common in the older part of WA like freemantle and the south coast.

CallieFort wrote:

Hi all

We can borrows the funds using our home as guarantor, we thought we could put down a cash 20% deposit and have a stand alone loan! but apparently no banks can mortgage company title shares..

Confused as nobody in Perth is used to dealing with this and would,like some feedback :)

Cheers Callie

1. You DO NOT need a guarantor loan….that’s just stupid as you have a PPOR worth $950,000 and your gonna tie this down to this IP…no way- Cash out the 20% + Stamp duty and apply for a SEPARATE free standing loan with a diff bank using the CASH equity as security.

2. 90% LVR on company title is possible but it wont be the Big 4.

3. You have a healthy position/financially and equity wise.

——

Regarding investing in a company title there’s a few things you have to look out for + be aware of.

1. Check the restriction on the company’s by laws
2. Who owns what and does any one or 2 person have majority hold on the company title
3. What restrictions does the By law have in regards to selling and renovations ( The bank will want this by law by the way)

It’s hard to sell a company title property, as you can see from your own experience so generally it lacks that capital growth as less demand for these sort of properties…unless it’s bought well below the market and has a good company by law in place.

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May 25, 2014 - 11:11 am

Generally standard resi IP income are discounted by 20%.

But as Richard mentioned; if your unemployed ( Under 50) and your using rental income only to service the loan;
1. Not all lenders will allow this as your def high(er) risk
2. It will be approved on a case by cases basis ..based on your LVR, overall portfolio, risk buffers, age and your rental yield ( Max 6% with some lenders)
3. Rental reliance policy will kick in ( rent > 50% of your income)

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May 18, 2014 - 12:47 am

If your income fits that’s banks serviceability ( every banks serviceability is slightly different) than yep it’s doable.

You have the deposit.

Example:

Existing home worth $400,000- with loan of $100,000 against it ( called property 1)
Want to buy a new property valued at $800,000 ( called property 2)
– get the 20% deposit ( $160,000) + stamp duty ( ~$30,000) for the $800,000 purchase from Property 1
– New loan applied for the remaining 80% to purchase property 2

As long as you can afford the loans, it’s a done deal.

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May 17, 2014 - 3:17 pm

Land tax is an individually tax and depends if you have reached the land tax threshold for that state or not. So no it’s not included into the strata it’s individual.

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May 17, 2014 - 12:23 pm

You have approached some average /consecutive lending banks- hence their response ” you cant afford the loan”- not all lenders are the same.

Sit down with a broker ( as they will have access to multiple banks + no credit hits) and obtain a free quote an recommendation on your situation.

Cheers

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May 16, 2014 - 2:28 am

No dont do that!!
1. It won’t increase your borrowing capacity
2. You will have to pay stamp duty and may be liable for CGT as well.
3. It won’t increase your borrowing capacity :)

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May 15, 2014 - 12:45 am

Need more info….A bit vague

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May 14, 2014 - 2:13 am

Macquarie has changed their credit policy at least 4 times in the last 2 years…major changes ( some good and some bad changes) and yes they have been very easy to deal with for the last 6 month especially with some of their cash out niches and no bank statement policy.

Generally speaking Macq is not known to take on foreign income it’s even in their policy book- but they are known as a “case by case” lender as they can place some of the strong deals on their “balance sheet” under their own funding. They are definitely trying hard to win deals since they left the broker industry a few years back.

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May 13, 2014 - 12:19 pm

jcso99 wrote:

Thanks for the feedback. I have a couple of follow up questions:
1) RMB income – I remember speaking with a mortgage broker in mid-2013 and told them that my income is denominated in RMB and their reply was that no bank will accept RMB salary. Hence, I didn’t bother to explore other lenders cos I thought RMB denominated income is not welcome by Australian lenders. If that’s not the case, I might explore other options

John

Can name around 7-8 lenders off the top of my head that deals and accept RMB
– ANZ, Westpac, St George, AMP, Bankwest, CBA, Citibank, Homeside,…..

But i would not advise you apply to every single bank and hope for the best as this would trash and kill your credit file; even thought the list of banks accept RMB it doesn’t mean they would necessarily like your deal or approve your loan- it will cone down to their credit policy based on your situation and serviceability and overall risk of the deal.

For example, i can probably safely say Westpac would most likely be a no deal for your situation as you have 5 IP and your rentla income may be more than your standard income ( rental reliance policy) + your standard income is a foreign income as well.

Regards

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May 12, 2014 - 7:46 pm

As Colin mentioned AMP has a Max of 10 loans per client, also if your an non resident credit sometimes reduce this number due your exposure to AMP and risk.

Regarding Westpac- They do accept RMB.
In fact most lender that accepts foreign income would accept RMB, as china is the largest foreign investor in Aus.

You have over 11 bask that would accept RMB to choose from, which one will depend on your serviceability with each lender.

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May 1, 2014 - 7:48 pm

Yes your repayment will jump quote a bit as it will change to P/I one a 20 years repayment plan.

As mentioned you can refinance back to an I/O terms or back to 30 years etc..The only risk is that it’s depends on the lenders approval in 10 years time- i have seen plenty of case where the borrower is close to retirement age and the loan flips over to P/I and they struggle; trying to do an refinance to 30 years on other I/O term when your a bit older can be a nightmare for some ( Not all) so plan ahead as the lender needs to reassess your application again.

– Will you still have a job?
– Will have more liabilities or an reduce income?
– If your age suitable and financial capability suitable for an extension?
– LVR

Cheers

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April 3, 2014 - 11:34 pm

2 options;

1. Approach a aggregator and they will refer you one of their members for mentorship

Or do the reserve ( recommended) 

2. Approach a broker who you think you can work with + believe you can learn off or aspire to be – Ask them if they are willing to be your mentor and you will join his/her aggregator group ; if you don't ask you will never know. 

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April 2, 2014 - 12:03 am

Cross collateralization is generally a bad idea in most cases; it advantages the banks and disadvantages you a a borrower; eventually you will need to uncross when you sell.

Cross collateralization is more common when business finance is involved and on some rare occasion commercial finance.

Since these are  just  standard residential properties tthan you should and can avoid cross Cross collateralization and still achieve an 100-105% borrowing with no LMI; a much cleaner cut from a tax and loan perspective! and cheaper in the long run.

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March 26, 2014 - 5:25 am

Ohh ok got it

Yea looks like your wasting your time if that's the building cost and "market selling price".

Min 20% return for any development IMHO

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March 26, 2014 - 4:54 am

Umm am i missing something….the numbers doesn't stack up, well the profits anyway.

Purchase cost: $280,000-

Stamp duty + softcost: $10,000-

Build cost: $650,000-

Subtotal Basic base cost: $940,000-

Selling new 3BR townhouses = $410,000+ each x2 = $820,000???

I haven't even included;

– interest ( holding cost)

– Marketing and selling cost

– Capital gain tax

– Professional fee

– Landscaping cost

etc…

Am i missing something???

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March 26, 2014 - 3:12 am

I'm subdividing a block of land and building a 4 bedroom house on each lot  in North west Sydney, turn key cost is $460,000 each so $920,000 for both and this is discounted already as im building them both at the same time. Medium – High quality finish.

– 4 bedroom

– 2 levels

– 2 Bathroom

– 310 sq meter living space

– Project builder.

I had 4 quotes previously, some were cheaper around $700,000 for both ( $350,000 each) but quality was not as good + smaller design.

You have to make sure your building the right type of property for the market/area your in….north western Sydney the houses are worth >$1m hence why i need a good quality finish and larger size and design so that i can sell for 1.3-1.4M each.

If i had this block of land in Western Sydney ( average house price is ~$500,000) than i def wouldn't be spending more than $300,000 to build.

How much do you expect to make from the project? ( ROR) and what's the average price for a new property in that area?

Your base price for each house is around $477,000 ( $305 + 650/2)

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