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February 10, 2011 - 12:02 pm

Just apply for a “non genuine savings” loans- yes it’s 0.3% higher but if it’s a good buy; worth considering.
As long as you can afford it and meet serviceability

Regards
Michael

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February 10, 2011 - 12:00 pm

Yes it’s possible because i done a few before, but to be honest it wont be easy….The lender will want to see the following:

1. Good financial for both your existing business and the new one
2. At least 2-3 years and not a “suddenly” increase in profit from the last year only – they will average it out
3. A business plan or exit strategy if required
4. A account letter confirming the financial
5. The books in your financial MUTS be spot on – i seen some book where the business state they only make 50k each year…then suddenly when they want to borrow it goes to 90k

The following will apply:
1. Max LVR on new place would be around 60-65% ( depending on lender)
2. Rate will be commercial rate ( just is expected) and terms
3. 1st mortgage on both places ( some selected lenders will consider 2nd mortgage)

There a few more condition, but that’s the main conditions. But lastly HOW much of the equity are you using VS cash?

You can email me or speak to any another commercial Broker.

Regards
Michael

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February 10, 2011 - 11:45 am

It depends on your security and purpose…that will determine who the “BEST” lender is for “YOU”.
But just to answer your question, 5 years interst only is the most common becasue that’s what the big 4 offers. However there are more banks out there then the big 4… SO here a quick run down for the interest only loans for IP:

1. CBA- interest only 5 years then reverts back to P and I , 90% LVR max IP
2. Suncorp- interest only 5 years then reverts back to P and I , 95% LVR max IP
3. BMM – Interest only up to 10 years, 95% LVR
4. ING = 5 years interest only, but allows up to 7 years for existing ING cust.
5. Bank SA and Adelaide bank = 3,5,7,10 years interest only.

We can go on forever….so it depends what are you really after??? If your using a broker- just ask her/him.

Regards
Michael

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February 10, 2011 - 11:37 am

Dean Potter wrote:

Hey guys,

Can anyone offer advice or guidance regarding off the plan apartments and whether they tend to be valued ok on completion etc.

Would you advise doing it?

Will the banks lend on it?

What type of deposit is required?

And what are the potential problems I may run into?

Richard, or anyone else, any thoughts??

Cheers in advance!  

Dean

Dean, i keep it nice and simple.

1. depends on the property type- is it studio apartment? etc..make sure it’s OVER 50 square meters total living space and it’s not a student apartment or anything – it’s not impossible to finance, just more complex- but still possible.

2. Make sure it;’s a respectable company and builder- if not you might have trobule with the valuation. For off the plan it’s based on comparable sales + who the builder is..ie what sort of quality does the builder normally supply.

3. For off the plan you can order “stage valuation”, meaning as it becomes closer to the build date the valuation price will just go up…

Just remember the BANK will finance these units, it just depends who the client is and is the bank willing to finance to you( based on what you have and how much you earn…)

End of the day, it depends What your buying and who the client is?

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February 10, 2011 - 6:33 am

AIF QLD wrote:

CBA or Adelaide bank will do this type of security!

True, but for only block of 4 unit under one title – Most of the lenders would finance it 20/41 of them…however it gets tricky but possible when you want block of 10 units under one title for residential rate 0.0

regards
Michael

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February 10, 2011 - 6:30 am

carlrsullivan wrote:

All, 

I have an investment on the cards and need assistance with the financing of the property 

The Background:It is a bombed out shell of a property, in a basement of a cool heritage building in Sydney, it is zoned mixed use and I plan to turn it into a serviced office scenario. The woman selling needs to sell quickly as she can no longer afford to keep the property, and in its current condition there is no way to rent out as either residential or commercial. 

The Problem: The asking price is around $600k, for which the bank will not lend to me yet, however once the property is completed it will have an estimated value of $1.1m, which would be well within the banks LVR guidelines. What I need is essentially the $600k for the purchase plus another $100 for renovations for 1 year. 

At this stage I am in negotiations to vendor finance the property for the year, meaning that all I may need will be $100k for renos + $20k in closing costs and overdue strata fees, but will still need to find a private investor. 

The Question:

How do I go about sourcing private investors, I was thinking that a 10% – 15% return on an investment of 1 year would be sufficient to get a good return. 

I have been in construction management for the last 5 years, and have done projects like this before, so i am qualified with experience, its just that I am not quite at the level where I could take this project on alone financially.

All your help is appreciated.
Carl

Private investors dont like dealing with the public directly- your best option is through a broker; and be aware since this is a commercial deal and it’s complex; there will be a broker fee – the average is around 2% of the loan amount – but this will save you time, paper work hassle and confidence.

But just to answer some of your questions: do you have any residential security that has ATLEAST 300k equity? if so i be able to finance it through the big banks for you x-cross and all under residential rate but with a $25,000 cash out max.

But all in all, if you have no residential security and you want high LVR for this deal- it be impossible!!! that’s why they say the rick become richer- because only people “better off” will be able to get finance for this.

Regards
Michael

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February 10, 2011 - 6:10 am

Runway wrote:

Hi Jamie,

The broker said that they offer 'flexible' products and low interest rates.

Upon investigation though, it seems their products have high ongoing fees. I wondering if this is done to offset the low interest rate.

To me it's just another product. However, it's one thing to use a 'flexible' product and another to get superior service when you need it most. The ongoing operating and 'hidden' costs also concern me but that goes for any lender.

Sounds like I need to go back to the mortgage broker and re-assess.

First mac would be one of the last i would normally recommended UNLESS you have a service apartment or unit under 50 squ ( even then i would consider ANZ etc…)

Didn’t your broker give you a “written” comparison of each of the banks.

Regards
Michael

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February 10, 2011 - 6:08 am

wblack wrote:

Can anyone  advise if home insurance is required to cover the period between signing the contract and settlement date. Our insurance company aren't prepared to give us advice on this.

VIC and QLD = yes.
NSW, ACT = at settlement

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February 9, 2011 - 1:56 am

Speak to a “INSURANCE broker” – as i mentioned they are not free ( different to us)

But im sure if you have a chat with your MB he might have contact with a IB that he has worked or dealt with in the past.

Regards
Michael

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February 1, 2011 - 2:59 am

st81hp79 wrote:

Hi Micheal,
I have purchased a block of 2 units before and  done huge reno to the property.
But I have'nt purchase anything on a 10% dep B4 using my dep funds from a equity loan.
I have read plenty of books and attended property investing seminar they all have the same quotes" Savers are Loser" us other people money to make money.

I have tired to call the 1300 74 5626 it's sounds like it's not your direct contact number

Cheers Jan

Hi Jan,
The number is correct it's our company's office number and the receptionist  Zoe normally forwards the message to us  brokers, as we are  always on the road   ( sometimes it goes to voice mail if the receptionist is that there).

I be in a meeting with some lenders soon. But i have received your message and i will give you call back within 1 hr.

P.s Your right- you need money to make money- that's why the rich always become richer!

Regards
Michael

04055 36088 – Direct number

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February 1, 2011 - 2:09 am

One last point- you mention your going to be doing some renovations to the property; if the property is run down and not "rentable" in it's current positions it will be very hard to get finacne with any of the banks due to the valution falling short – for a run down property  chance of approval would drop from 70% to 30%.

Also where would you have the funds to do fund for the renvo? unless you get a cash out loan with your IP loan.

Some  food for thogught

Regards
Michael.

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February 1, 2011 - 2:02 am

st81hp79 wrote:

Thank you for your helpful replies,
My 2 previous IP is with Westpac. I took a $120,000 equity loan from my first IP with westpac.
to fund a deposit for my next IP which will be with CBA.
This time I am interested in purchasing a block of units which I only have enough for a 10% dep + stampduty
We are looking for reno block of units,hopefully to only let us be in position sightly negative gear with a 10 % dep

I''m guessing you never done this sort of "development" before if that is the case;  with 10% dep you be limited to only 7  lenders for a block of 4 unit under one title – One of them being CBA, but they will be harsh based on your LVR – They will only allow certain area/postcode to be accepted and certain apartment type as well.
So the first thing we normally suggest and offer to our client in your situation is to pay for a valuation on the property to be done first ( cost ~$500). But if you email me the address and link of the property your trying to buy i be able to give you a rough guidelines on approval rate for each of the 5 lenders for that property ( at no cost).

So in short to answer your question, yes you can get a loan for block of 4 units with 10% dep and no it wont be with westpac ( there min LVR for this loan will be 80% to avoid the LMI) . The property will most likly be negative geared for the first 3 years.

Without knowing your full details ( Area, postcode of the units, Your total asset and income etc…) i can only provide you with a general outline on what to expect. But PM me or email – [email protected] and i can post you some form, and i can give you a more define answer.

Regards,
Michael

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January 31, 2011 - 11:36 am

Might want to speak to a insurance broker, they should be able to give you a few quotes on different lender based on your “requirements”. They normally charge a flat fee of $80-100 a year.

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January 31, 2011 - 11:26 am

st81hp79 wrote:

Hi guys,
This is my first post,I have 2 IP no.1 is positive and no.2 is neural.
This time I am interested in a block of 4 units in the 1 title. I was hoping if anyone can help solve my confusion as I have researched in the net about financing for a block more than 2+ units, I heard you will needing a 30% deposit down, under a commercial loan or I heard that 2 units would be a  normal investment loan ( loan ratio of 80% or 90%)

Although I have seen my lender on Friday, he Says I can borrow a loan ratio of 90%
I want to offer between 800,000 and 830,000.
rent is 50,000 per annum

appreciate for all the replies..

HI.

Block of 4 units is fine with standard residential lending, LVR of up to 90% as well – but only a handfull of lenders will consider this. The top 3 main players are St George Bank, Suncorp and Macqauire bank.

Anything more then 4 units (up to can still be residential lending but with LVR at 70-80% max. Selected non banks.

One important point you will need to comfirm with your lender is; what are the conditions for a 90% LVR – because the bank might accept the loan but the the insurance (LMI) might reject your loan!!!

If your having trouble finding out, PMS me which lender your with and i be able to tell you the main conditions.

Good luck!

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January 30, 2011 - 10:33 pm

Will need to speak to a tax accountant who deals with dual accountancy. ATO as a list.
But in term of finacne, a few selected lenders will consider using an NZ property as equailty. ie ANZ, AFM.

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December 23, 2010 - 3:35 am

ING bank -will do a “reduced” LMI for LVR up to 85% , but up must be in your current job for more hten 2 years and no default history on your credit file at all.

AFM – The offer no LMI up to 90% BUT the LMI payable must be under $4380 (meaning the place you buy is under $250k)

HSBC – From time to time they have deals for no LMI ( did one 2 month ago)- No LMI up to 85% – must be in job for more then 3 years and no default also they will only pay $7,000 of the LMI amount ( you fork out the rest)

There are 3 more private lenders and a few non-conforming lenders that will do it on a case by case basis.

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December 22, 2010 - 12:43 am

Hi.

I recently apply for finacne for a client , who bought a 21 sqaure meter student accomdation – mind you it was NOT easy- but we got there eventually.

Currently CBA no longer offer this product as of 01.07.2010- ANZ is also pulling out from this product, but since i deal with student accomdation on a regular basis i find they do accept them on a case by case ( but it's no easy feat)

Prior to the GFC, student accomdation was not a real issue in term of finacne. but since then- it's a No no for Most if not ALL the banks. you will only find finacne for student accomdation if it's bigger then 40 squa meters and must be self containted. Another wise you will have to go through a Private lender – and rates are generally 2-4% higher then standard. and different terms and condition depending on the ledner and the property .

Regards,
Michael

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