Forum Replies Created

Viewing 20 posts - 41 through 60 (of 1,097 total)
  • Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    CONGRATS Jamie!! :)

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    ^ yea you got the basic.

    OTP has it's place, especially for units, so yes even though you can't choose the design it make sense especially if your buying a unit – imagine if a developer is building a 100 unit project and all 100 owners wants different design, that would be a nightmare! as the builder need to maximize the space + apply for council approval.  

    Personally im not a big fan of OTP from a investors point of view…

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    Off the plan = Normally applies to units or "strata titled properties" with common walls and land , where one developer builds everything and sell you a lot/unit

    Land and house package…or buying land and building your self – applies more to freehold/torrent title property. in this case you can normally choose your own builder and deign ( unless it's a house and land package that's set) 

    Deciding if this is a good buy or not, depends on the location/ property type/ price and current and predicted market moving forward and lastly obvious your financial ability and objectives. Just asking if " Off the plan" is good or not doesn't help as it's good for some and not for others + it depends where and at what price. 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    effects application …which CAN in turn effect borrowing power if the bank you wanted to go with ( ie a good "serviceability lender" rejects your " application" .

    Example: Homeside has a good serviceability model, however they do credit score…

    Suncorp don't credit score but has a average serviceability model

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    Email sent to see how we can help + we have a few contacts we can recommend if your after a particular service. 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    manadeep wrote:
    Hi, 

    I am a Sydney resident and have come across multiple serviced apartment investment opportunities. 

    They are usually a studio with a bath and without a car park. 

    Most offer a long term lease (5 – 10 years) with options of extending and a purchase price that is on the lower side. 

    e.g. Here is an example 

    Price $285,000

    Guaranteed rental yield 6 to 7%

    Most outgoings paid by the serviced apartment company 

    I just want to check if there are people out there who have actively taken advantage of these opportunities. Is there a catch with these properties? Are they hard to sell if you wanted to?

    Hard to sell + lack of Capital growth if any as mentioned.

    I saw one for Quest in Haymarket sydney, was advertised for under $520,000 now it's under $450,000 and still haven't sold 1 year later lol

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    DerekLangan wrote:
    Thanks Michael, your very helpful. I was wondering can you give me an honest opinion on this particular scenario. Say if renovations come to roughly $10k to increase the market value and I leave a bit of extra money to buffer so all together it may cost me $25K including stamp duty and LMI etc. Do you think it would be better to take the loan out on interest only and pay into an offset account and use an interest free credit card or do you think just stick with repayments on a principal and interest loan?

    Interest only + offset is always suggested in 9/10 of the time. 

    however, With a 95% + LMI loan, you will find;

    1. It's not an easy loan to get approved, your file needs to be strong

    2. It must be a p/I set up at such a high LVR

    So really you have no choice but to go down the P/I path due to your LVR, which is fine and workable. 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    DerekLangan wrote:
    do you think it would be worth paying a professional to give me there exact opinion on cost to renovate, or is there another way to evaluate the property to find out how much needs to be spent?

    ^ easiest option is to get a quote from a builder/handyman etc…

    But it doesn't hurt to do some of your own research on cost as well- The internet + ringing around will work wonders :)

    Either way, make sure you have a buffer. 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    DerekLangan wrote:
    Well I was thinking after a year of doing some small renovations to bring the place up closer to the median price in that particular area which is around $220K and then getting it re-evaluated to loan off the equity and invest in a more expensive property. Would you suggest this to still be a bad idea?

    If the market is $220,000 that's all good- ticks the box of "revalue + buying under the market" , however how much do you need to spend to bring the property value up from the current $150,000 to $220,000?? and do you have the funds and if not when will you have the funds to execute this strategy…plan ahead-  but based on what you have given it's a good idea overall. 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    Personally… the rental yield is way to low for my investing style- even thought it's a >6% yeild..the return in $$$ figures is to low for my liking. UNLESS your buying the property below market value and there's a good chance for capital growth or to create capital growth + higher rental yield.

    4 main strategy that i follow, that you may or may not agree to;

    1. Positive rental yield form day 1 – the $$$ figure needs to be >+$1,000 per year

    2. Buy below market value…so that i can re-value the property 6 month later and draw my deposit back and go again in a short period of time

    3. Ability to create capital growth- subdividing/ structural renovation

    4. Ability to increase rental yield – rented below market value ?renovation ? dual occupancy? granny flats?

    Every investor is slightly different….but it all comes down too " what will this property do for me financially" now and into the future- don't buy just because you can or because it's cheap….

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    DerekLangan wrote:
    Interesting… Thanks Jamie and thank you Michael for your input in backing up Jamie's comment. What if I found a 3 bedroom property for $150K and it was currently being rented out at $200 per week? Would you say that woud still be a smart investment even with a $10k deposit?

    Smart decision on not – depends on your overall long term plan and where the property is located..

    But working on the numbers.

    1. Purchase $150,000- loan of 95% + LMI = loan of $142,500 ( your total cash outlay = $11,553)

    2. Repayment of around 5.30% variable per month say ( rate can be lower or higher, just using an average based on loan size) = $142,500 x 5.30% = $7,552 interest paid for that year

    3. Rent for one year = $200 x 52 = $10,400 per year

    4. Maintenance + strata ( presume it's a unit; small block with strata at $400 p/q??? ) + council rate ( depends on the area, just gonna use a average ) = $3,000 per year

    Overall result = Property is just neutral, tenants pays for mortgage and most  Maintenance— but potential for rental increase and capital growth? hence why i open t he reply with depends on the area and what you want to achieve in the long term. 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    Agree with Jamie.

    Nothing wrong with LMI, especially if it allows you to enter the property market quicker +if it's an IP, you can claim this over 5 years in your tax returns.

    LMI would cost you around $6,500 for a 95% $200,000 purchase and all you need for a $200,000 purchase is $15,803 in total ( incudes 5% deposit + stamp duty) as the LMI cost can be added to the loan as well depending on the lender.

    The question is;

    1. How long would it take you to save up $40,000? VS extra $5,803?? and would the property price go up by more than $6,500 during this time? + benefit of rental yield/rental return.

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    1. Speak to your bank or broker to work out how much you can afford/borrow

    2. See if you can draw out some equity and make sure it's a split loan

    3. Always better to use equity to buy IP2 as you can claim the interest as an expense + any cash oyu have would be sittign in your offset account reducing the interest anyway.

    4. Only use the cash for any short falls + as a buffer

    4. Find a property within the budget of your borrowing capacity- happy shopping :)

    P.s Make sure the loans ( IP1 and IP2) are not crossed. 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    thecrest wrote:
    Several banks have told me over the last 2-3 years that a residential property or equity  in one can be used as security for a commercial loan, in particular a loan to buy a motel freehold or leasehold, and in doing so would only attract residential % rate.

    Is that still the case in the current experience of the Forum's finance brokers ?

    Would the same apply for buying other types of commercial property like shops, factories or office space etc ?

    Cheers

    thecrest

    ^ Yep, residential security for commercial purposes- resi rate. 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    u36ma wrote:
    Hi all,

    I have a portfolio of properties which as a whole is running at about a $50/week loss.

    I'm looking to find an easy location to get positive cashflow properties in a location of 30,000+ population (to make it easier for financing). 

    /quote]

    ^ Try not to restrict yourself with a pop of >30,000 as not a lot of suburbs would even fit in this criteria…espeically positive geared properties! 

    A lot of positive properties i buy are in decent areas and some are in a pop of 5,000- 10,000 and i can still obtain finance at 90+ LMI no issues..

    If you want to make sure the area is "finance friendly" stick with Post cat 1 and Cat 2 as per the Genworth or QBE location guide.  – http://www.genworth.com.au/lender-centre/tools-and-resources/location-guide-australia

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    Chickenhawk6451 wrote:

    1) Borrow 15% of the purchase price in the form of a personal loan, place 10% deposit, 5% for closing costs

    2) Get traditional finance from a bank in the form of a Line of Credit Loan to the remaining 90% – 

    Problem number 1- Your going for a 90% LVR loan and all your deposit and cost are borrowed in the form of a personal loan – a majority of banks won't accept your loan as you have NO genuine savings at all…you literally borrowed everything as a personal loan; if this was a gift  all ok but if it's a personal loan that's a big no no….Having said that there's 1 credit union and a non-bank that will accept this set up ( will allow for some of the  personal loan to form part of the deposit – not all) but your file needs to be absolutely strong! 

    – Employment for over 4 years with same employer

    – Full time perm

    – Low consumers debt, beside the personal loan

    – Satisfactory conduct for  savings account

    – Must have SOME form of savings, at least 2-3% of the purchase price

    – Strong income to service the loan + the personal loan 

    – Good credit file with low actives 

    Chickenhawk6451 wrote:

    3) Selectively renovate the property, thus increasing the value and rentable income.

    4) Get the property re-valued according to new renovation

    Easy said than done. Cosmetic renovations hardly get you the amount of equity your after…ie you spend $20k on painting and new carpets…the valuation may not even go up…and if it does won't be over 20k ( 97/100 of the time)

    + where you  gonna find the money for the renovations? 

    Chickenhawk6451 wrote:

    5) Pay out the personal loan using the newly acquire equity (or as best you can at least, no reno will at 15% one would think)

    Expect or plan to hold the personal loan for atleast 2-3 years on average maybe even more….it's not impossible to increase your property price by >15% but it's not easy as well. 

    Also this is subject to the LMI allowing you to pay out your debt with their new loan!


    Overall NOT impossible, as i have done this for previous clients ( 2% of purchase price held in savings- borrowed the rest from personal loan and get a standard  loan for the rest) 

    but definitely rare as a few hoops to jump through! 

    Alex your view as a whole is ok….but consider trying to save the min 5% and the rest is fine, as we can stick your loan with a normal lender and there's no need to worry about the personal loan or stamp duty.

    Cheers

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    Maple9 wrote:

    My LVR is above 80%, can i also use guarantors?

    ^ guarantors – No, not for cash out/equity release.

    However it's possible to go to 90% LVR on your current loan and still achieve what your after, but would def be a lot harder and expensive.

    Maple9 wrote:

    Or my LVR is below 80% after releasing the equity?

    Perfect. As long as your income to can service the loan- easy done. 

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    ^ yes this is possible, but not all banks.

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    70k combine income is decent and is enough to draw out some equity…and given your trying to buy an IP – that's $15-20k worth of rent that you can add on to the cal ( for the new loan)

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    JAMES TANNER wrote:
    I am not going anywhere!

    Well if i worked and lived in Bali…i def won't be going anyway as well :)

    …oh i miss my Bali holiday …

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

Viewing 20 posts - 41 through 60 (of 1,097 total)