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

October 9, 2012 - 12:21 pm

^ very smart! 

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October 8, 2012 - 12:47 pm

casanovawa wrote:

I was planning today to go to Westpac and see about getting a $15,000 or so personal loan, which hopefully by the end of the week (if its approved) should give me the funds to meet ANZ's lending criteria (I think that should even give me close to the amount of funds required to go up to $370-380,000 loan…)

^ auto rejection right there…and not only will it be an auto rejection, your credit file will be trashed with this personal loan- which means you will have to delay your plans for another good 6-12 month.

Going for an 95% LVR loan + LMI ( 97-98%) is not that simple…if getting a personal loan will solve the banks " deposit" problems, then us brokers will def be super busy!!!  

Going for a 85-90% LVR loan with a personal loan to fund some of the deposit is a difference story…but at 95% no chance. 

Regards

Michael 

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October 8, 2012 - 12:37 pm

Provide the numbers…and we shall be able to crunch it

– How much are you short by…

Also with a renovation-to-flip strategy, you need to have money ready to make this process work….it's all about flipping in the quickest amount of time and if money/cash is tight this can cause a lot of delays. 

Have you research into any another strategy, that may be more suitable considering your current situation and cash flow/deposit issue?

Regards

Michael 

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October 8, 2012 - 12:33 pm

If settlement is going to be delayed, it's best to let the lawyers know so that they can cancel the meeting….as the vendors, yours and the bank's lawyers/settlement agents will be present and it would suck for you to pay for their fees.

If settlement is delayed, the vendor can charge interest ( how much depends on your contract, but it's normally 10-15%PA)…most vendors are ok with 1-2 days delay and may not charge the penalty interest.

Regards

Michael 

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October 8, 2012 - 12:29 pm

…depends on the company.

Expensive, doesn't mean it's good.

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October 8, 2012 - 7:58 am

I always use my CC to pay for all bills, including my IP's bills – Free travel FTW

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October 7, 2012 - 1:41 am

Your frd most likely get some sort of kick back or commission for introducting new clients – so i would take his advice with a gain of salt…..

The property is making you $50 a week, doesn't sound like a lot but it's still $50…instead of selling why not draw out some equity and use that too invest; you dont need the full $90,000 at this point correct? ie if you really believe your frds advice, buy one first and see how it goes.

Remember if the new properties you buy DOESN'T go up then you would still be at a lost;

– interest ( rental yield)

– Selling cost /agent

– stamp duty…

lastly are you a capital growth investor or more a rental yield investor? which strategy are you more comfortable with…

 

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October 5, 2012 - 12:24 am

It depends on;

– location ( of the land) 

– Who the builder is / design ( it's common for newly develop area to advertise as " hardwood homes etc…"

– Quality of finish

– comparative sales in the area

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October 2, 2012 - 11:57 am

I wouldn't "de-strata" a block of 4…it would be a costly exercise + inflexible if you needed to sell + adjust to the market.

Given you have majority rule, you could choose you own strata manager OR self manage, but it will still be under a strata scheme ( insurance wise and council wise) – nothing wrong with self managing. 

Regards

Michael 

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September 24, 2012 - 1:38 pm

My experience with block of units is slightly different, and i think they are one of the best investment in terms of rental yield; 

– You can get residential rates up to a block of 6 with no issues.

– Block of 7 and 8  can still be within the residential space, but it needs to be a 2 bedroom units only and in a Cat 1 location. 

– The above only applies to single title…if the title is split then it gets a bit tricky

– Stamp duty is normally a touch higher, compare to buying one by one as the stamp duty is "aggregated" 

– Subdivision is sometimes possible, but depending on the council they will require a min number of car space, making the doors fire proof or fire safe, exit strategy within the building, new plans and one of the largest cost will be the pumping and drainage…it cost me $75,000 to subdivide a block of 6 in 2009.

– Maintenance can be costly, as Jac M mentioned they are normally older style apartment with no lift and over 50 years old – also since there is no "Strata" it's normally self managed or managed poorly by one agent. 

– You control your own "strata" and cost…

– Rental increase is a beauty! with block of units…small increase of $10-15 can easily multiple to $60-80 extra per week + discounts on agent fees

– One thing to mindful regarding these older style block of units…most will not have separate water meters …so you as a landlord end up paying for the water!! however it's cheaper to get Sydney water to change and add the meters in.

Regards

Michael 

 

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September 24, 2012 - 1:21 pm

jmsrachel wrote:

Can I ask why nobody recommends a financial advisor on this forum? I was about to go see one.

Their good for managed funds, shares, insurance and superannuation-if that's what  your after. 

From a property investing point of view, most have no idea unless it's from their own personal experience …..

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September 24, 2012 - 1:17 pm

http://www.fairtrading.nsw.gov.au/Tenants_and_home_owners/Home_building_and_renovating/Selecting_a_tradesperson_or_builder/Questions_to_ask.html

^ i normally get all my  construction/renovation clients to fill in the above

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September 24, 2012 - 1:09 pm

williamwpy wrote:

I heard that when purchasing the house, you need to inform the ATO whether this property is for home purpose or is for renting purpose. Eventhough I do not physically live in the house and I rent it out. Can I still tell ATO this is for home purpose?

If my friend and I are both the owners of the property, can we claim for the First Home Owner Grant of 7000 per person.

William

-No to the ATO question. 

– The FHOG will only apply once in this situation, ie one grant only…

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September 24, 2012 - 1:07 pm

mrDeen wrote:

Hi all, FIrst post  

total 690K – equity is what i borrow. Rent should cover minimal repayments of the apartment.

Welcome!

^ there's one of your problem…it looks like the loan is gonna be crossed and if your going for an LMI loan as well, this crossing will be a costly mistake…let alone it's the wrong loan structure in the first place from a tax point of view!

Overall you should have split loans with I/O with the ability to take your new loan to a 2nd bank ( if required).

Shoot Jamie an email and he will be happy to get you back on track in a jiffy! 

Regards

Michael 

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September 24, 2012 - 1:00 pm

As Terry mentioned Lenders mortgage insurance.

Typically for a Chinese ex-pat loan over 5 years ( time over seas) with no set asset base in Australia, the lenders will GENERALLY: 

1. Want to see tax returns – Written translation by a registered translating organization

2. You have to be working for a a recognized company, if not a global company. 

3. Use standard living expense for servicing 

4. Convert your income into Aus dollar at current exchange with a 15% discount + taxed according to Aus maragins/income 

Regards

Michael 

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September 22, 2012 - 7:41 am

3 townhouses only…stick with residential, you don't need to go into the commercial side of things.

Residential =

1. Better LVR – Btw 80-90% depending on lender

2. SImplier – Standard consturciton loan with 5-6 progress payments

3. More flexibility and control compared to commercial – for small projects like this one anyway

4. Better rates = from 5.80% – 6.15% variable  

5. Better conditions = No presale required if you can service end debt. 

6. Financial cheaper to keep the property = 30 years term, with good rates

---

Hard to give you a solid answer without knowing the location, zoning,  strategy ( strata title? ) financial details and strength etc..

But generally speaking with  a  3 townhouse build, lenders won't look at past experience too much, they will be focus on the LVR, your asset Postion, the fixed price contract and who the builder is. 

Here are some softcost you will have to consider on top of your 10-20% deposit.

+ Stamp duty ( roughly $34,000 (VIC)  depending on state..

+ Demolish cost 

+ Council approval 

+ Section 94/ Contributions

+ Connections

+ Furnishings

+ Selling cost ( agent) 

+ Contingency cost 

Regards

Michael 

 

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September 22, 2012 - 7:13 am

<1% vacancy rate is quite standard for a majority of areas….so i wouldn't invest in an area just based on that data alone. 

+ which source do you get your vacancy rate from? each sources has a different method of measurement..

Regards

Michael 

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September 22, 2012 - 7:11 am

Australian banks will consider, but you really need a 20% deposit for your situation as you have been an ex-pat for a considerable length of time and the LMI will most likely reject the deal.

Regards 

Michael 

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July 11, 2012 - 3:13 am

Non conforming lenders.

kateej03 wrote:

I have spoken to my broker re borrowing 80% and the vendor financing 20%. He has said for the particular bank he is looking at that they still need to see we have the money in the bank for the 20%.

If this is the case, how can this strategy work!?

Thanks,

Kate

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July 5, 2012 - 11:53 am

Very simple…the bank has the right to close off any remaining credit or lower the limit on your LOC when ever they like, standard terms and condition of most if not all LOC that i have seen -happy to be proven wrong.

P.s that’s why im more of a fan of the good old I/O split with an offset..but LOC has it’s place.

Regards
Michael

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