Forum Replies Created
AD
I am with Mr Hedge in congratulating you 3 star man !!
Also, I whole-heartedly agree with your investing strategy. Why try and rip someone off ??
Good grief, there are a b’jillion (a very large number) of deals out there and they are all opportunities to create triple or even quadruple wins (Vendor, Purchaser, Agent & Tenant all walk away happy).
Just recently by doing a bit of creative negotiating we achieved it on a $51k rental house. All 4 parties walked away happy. It can be done !!
Also, we have bought a couple of mortgagee sale properties and have often wondered about the circumstances in which the bank foreclosed on the previous owner. I think that it is a sad thing when it happens.
One of my friends has a great saying “there but for the grace of God go I”
TTFN
the B [
]Hi there Matt !
ANZ are the lender in question, though I guess that you could probably negotiate that with most of the majors. I think that the secret here is they have their own LMI arm of the bank that they deal with.
de Bruce [
]hi there En………..Jo
There were a number of posts on the forum on just this topic about a month ago. Why not do a search ??
cheerio
the B [
]Matt
I do have one gem for you on this topic.
Recently a lender suggested to us that we could amortise the LMI costs into the loan without affecting the LVR. i.e. LMI is not counted in the LVR calculation !
For a cheaper house it may only be a few hundred $’s (in fact it may be zero if you don’t borrow more than 80% in most cases) but it alll helps to increase the COC return.
the Bruce [
]Mmmmm
good question. I haven’t really given it much thought, as we straight away approached it from the angle of placing as much as possible of our business with the one lender. It seemed to make sense from the stance of loyalty and volume of business.
This has some benefits as they see you are serious, and as the amount they have loaned you rises, it really does get easier to deal with them and eventually you have options put to you that aren’t given to a person off the street.
Recently we have been offered a reduced interest rate that is even lower than the best investment rate of the lender. There have also been discussions about reduced application fees, etc, etc.
I almost didn’t believe it till it happened to us, but it really does happen after you have established a solid business relationship. [
]Other option of splitting it up has the upside of establishing multiple relationships. We actually did do this, but only placed our day to day banking with a second lender. Still it has been significant enough to open some doors for the future when we will go to them. A bit of background here is that we have been open about the breadth of our business and the lender can see that we are serious and would like to have us on board when it is appropriate.
Our philosophy on lenders is pretty much be straight with them and incorporate them as a vital part of your investing team.
cheers,
the B person [8D]
Hi all
I agree with RC. Avoid cross collateralisation, have stand alone loans (which may be secured by more than one property; depending on your strategy) and then you have flexiblity.
cheerio
the B [
]Mornin’ Leigh
our experience is that the contract date is the START of the waiting period for revaluation. However, having said that, 3 Lenders we have talked to have all said that the valuation will age in 3 months (not 4) and so we just have to have the cash for 3 months :o)
Note: we have been told that it is good to do at least something to the property to increase its’ value, I mean it makes sense too as you will be able to amortize your upgrade costs, before getting reval and applying for upgraded finance.
There may be a way round this however if the settlement is long enough. We have a couple of deals on the books where we may get in excess of a 9 months settlement period. In this instance one lender has said that that they might (and I stress the might) look at doing finance based on valuation at purchase as the original val (from when finance was approved) will be too old.
Hope that helps [
]cheerio
the B
Hi Leigh & Matt
We talked this over with our legal folks some time back, and the idea of the amended contract price where money does not change hands apparently comes under the heading of conspiring to commit a fraud (ie you have not disclosed the your real position to the Lender).
We thought that this sounded like a bad idea (it is amazing how a court case can ruin your chances of ever borrowing money from someone ! [
]) and looked at option 2 that Matt described where we fully revealed in the contract by terms of a redeemable deposit or something like that.It was suggested that the Lender would read the contract and assess it at the”effective” purchase price and not the paper one. I asked a couple of our lending contacts and got much the same story too.
However, as you are fully disclosing, if they did accept you would be on a winner provided the deal still stacks up at 100% finance, as they don’t always do that…..
Please tell us how you get on if you try it out.
TTFN
the B person [
]111 plus 111
just remember one other little thing. The ATO has ruled that for CGT purposes you have to hold the assett for a year, meaning that you have to allow one day at the beginning to purchase it and one day at the end to dispose of it, thus you need one calendar year plus 2 days as your hold time to get the 50% CGT rebate.
the Bruce [
]Hey YG
I like how you think !
I reckon that it is really how it works too; because everyone learns differently, something that you hear will prompt a thought, or solidify an idea, and then your $60k plus more comes rolling along in the future.
I go to as many events as I can, read, talk to other investors, etc all because I reckon that I just don’t know it all and (best of all) I never will [
]the B
Hi Wellyboot !
Welcome welcome……
further to AD’s comments we have had a bit of luck doing exactly as he said, i.e. paying cash, then doing some refurb and refinancing with lender. On one occasion it became a “no money down deal” (still generating positive cashflow income) as after the refinance we had effectively put no money in !!
cheers
the Bruce [
]Hi Scott
I second (& third) the other comments here by AD & RC.
Do the reading first as it will save you money on fees.
Just remember that you need a team, and vital players on the team are your accountant and solicitor; both of whom need to contribute to a conversation on a structure that best suits your personal circumstances.
Good Investing
a big hairy fella named B [
]Hey spring1
the book is a very good “how to….” and really gets you thinking.
the B[
]Hi Matduqua
“Get Lateral” in your thinking and there are options even in a hot market.
eg: just say the Vendor of your next IP owns it outright and is retired. You offer to purchase with 80% of the bank’s money and ask them to lave 20% on the table which you will pay back at X% rate over Y years. It works for them as it is like having a term deposit on which they get interest.
It reduces your entrance costs and may make the deal cash positive. Note the use of the word may. Do your numbers !!
cheerio
the Bruce[
]Hi Ziggy
“Consult the professionals!!”
I reckon that you should make a phone call to your solicitor (who helped you when you purchased), and your accountant, to get confirmation as to what will happen.
the Bruce [
]YG
sorry about the “pro forma” answer here, but check with your accountant and your solicitor.
the B [
]Good on ya Leigh
My sentiments exactly !!
You ARE in control of decisions you make and whom YOU choose to be.
cheers
The B [
]1+1+1+1+1+1 [
]Because this is a filtering techniques (read time saver for YOU) use gross rent figure as that is what you are told by an agent.
As your due diligence progresses you actually would look at net rent.
howzat?
Bruce
ps : Robert, excellent analysis and I guess a huge learning curve ?
You know that you have done what some many people talk about but can not bring themselves to do; i.e. “shake the trees!” or “Get up off your a** and actually DO something”
congrats
the B [
]
]
]) and looked at option 2 that Matt described where we fully revealed in the contract by terms of a redeemable deposit or something like that.
]
