Forum Replies Created
Hi Richard,
Please could you expand on this? Which one would you have at 60% and which one at 80%?
And if currently we arn't currently able to get a loan at 80%, why would we be able to in what your proposing?
thanks for the feedback:)
Rgds
Wayne
Hi Richard,
I assume you were meant to say "why you wouldn't" get finance…?
The issue at the moment is that using the 60% rule, the banks will only lend us $665,000.
However, we also need an extra $75,000 to pay off the LOC and $31,000 for stamp duty and fees.
This leaves us $106,000 short.
cheers
Wayne
yes – the building side of things is something I've been looking at. Again, within metro my problem here is that the holding costs just for the land itself wouldn't be viable and time to build the property is also an issue.
One thing I have been looking at is building a kit home on a cheap block of land in regional country areas. This way the holding costs are minimal and I should be able to get instant equity once i finish the house, and also get the property + geared. However, my issue here is that I would only be able to build one house as an owner builder and would then have to wait 6 years until I could build another.
I have been looking into getting my builder licence though this is a lengthy process. There is also the option of finding a builder that would let me use his ticket for a % kick-back though I have yet to find a builder that is happy to do this…
Cheers Richard!
Terry, i see where your coming from though in my scenario I'm trying to structure an income based portfolio that will allow me to increase my income. With this increase in income I then plan to migrate from working as a roof plumber to investing/renovating/developing property on a full-time basis – hence requiring such a yield.
Hi Guys,
Thanks for your detailed responses. Great to hear that loans with 80% LVR are available.
TerryW – what you are saying seems to make a lot of sense. I guess this is what Richard has touched on by saying to avoid "cross collateralisation". If I structure it how you've mentioned then this would be easy for me to sell my PPOR and not have to re-organise my loans:)
Yes, we would be selling are PPOR when we upgrade.
In regards to your comment "Country towns are generally no good for investing" – would you say that they are good for high yields, though not good for CG? As my strategy is all about generating a cash flow I don't see how I'm going to be able to generate the required yields in the metro area. I would like to be proven wrong though I've found it very hard to locate deals that can provide me with high yields in Perth metro.
Once again – thanks for your replies, all making sense now:)
Rgds
Wayne
Hi Spiro,
Thanks for your feedback.
1. Serviceability – yes, i thought this would be a problem. As I'm a sub-contractor and run my own business I've heard that banks aren't comfortable lending over 60%. If you keep your LVR under 60% do banks even look at your income? I've heard that if you go for a Low Doc that you sign a declaration or something similar? Also, Are Low Doc rates usually higher than other loans?
2. Valuations – interesting point. How do you know if a bank has a good track record with valuations? I guess this is something the mortgage broker will know?
3. Cross Collateralisation – can you expand on what you mean by this? Are you saying it's not a good idea to secure property loans by other IPs?
thanks again,
Wayne
Hi Guys,
Thanks for your replies. My friend is moving to Queensland soon and we will be mostly communicating via email. As he's doing it as more of a favour for us we wanted to provide him with my detail as possible so he doesn't have to do too much work.
Steve -the smartdraw looks pretty good – I'll download a trial version and see how we go.
Sue – can you expand on what you mean by AHAs?
cheers
Wayne
Hi guys,
Thanks for the replies. Yeah – I spoke with the council and any structural additions you need to get council approval for. If you are replacing existing walls that's fine – you don’t need approval for this.
You also only need a license if the cost of the work carried out is above $20,000 (eg, your owner builder license).
rgds
Wayne
Hi Guys,
Thank you for your feedback – much appreciated.
Yes – I'm currently earning an average wage of $800 p/w and have been writing tax invoices for all my work so I will be claiming this at the end of the financial year – which I guess I can then use as proof of income. In the meantime I assume it's good to keep a full record of accounting etc in MYOB or something similar for proof?
In regards to security would the equity in our existing properties help – or would it be the "servicability" aspect of a loan that I may have problems with? Reason being that we own our PPOR (worth $500k) out right and have a rental worth $330k with $241k owing on it. Therefore I was thinking that perhaps the equity in these properties could act as the "deposit" – or do the banks look at you and say "you may own property though with no income proof you can not pay the weekly repayments on the loan"? (hope that makes sense)
cheers
wayne
Hi Crj and Geoff,
Crj – thanks for the detailed reply – much appreciated!
Now I have a better understanding I'm just filling out the online ATO forms to apply for an ABN and register for GST:)
As there is myself, my partner and my parents involved I was told we should setup a family partnership then just get one ABN for the parthership rather than get individual ABNs – do you think this is the best way to go?
I must admit investing in commercial property seems a little more challenging though hopefully the rewards are better than residential!
cheers
Wayne
hi guys,
thanks for the feedback.
CRJ – so your saying that if we have a tenant the buyer wouldn't have to pay the GST, and if we don't have a tentant they would have to pay it?
If we go down this path of finding a tenant first, do you think we would be narrowing our market to "investors only" rather than "owner occupiers"?
And in this case if we have to pay the GST wouldn't we be better off just not registering? Eg, as we are recieving the GST credit – then will be giving this back when we pay the GST on the buyer's behalf?
thanks again,
Wayne
Hi Elka & hallg,
Hallg – Looks like your doing alrite out of yours! a 9.6% return is fantastic.
Elka, cheers for those links. I'll have a read through them tonight.
Yes, its a its a factory unit/showroom approximately 90sqm, with a 20sqm office on the 2nd level.
Unfortunately now the agent has the the O&A signed he hasn't been to helpful with the enquiries, so all the feedback I've gotten on this forum has been great.
Do you guys have residential investments aswell?
Rgds
Wayne
Hi Elkam & Hallg,
Thanks for the replies. I have contacted a Commercial PM and am waiting for him to return my call. If you don't mind me asking, what yields are you getting on your properties?
Also, I've heard it's common for rents to be worked out on a sqm basis. Do you think this would apply more to offices, rather than units? Here's a pic – mine is the one on the right hand side…at the front:)
Hi Hallg,
Thanks for the reply. Yes, the unit is actually located one street away from residential housing, therefore I suspect this is why such a restriction has been put on them. I'll give the City of Wanneroo a call to see if they can give me more details.
I've actually just come across a map of the place;
http://www.landcorp.com.au/pls/portal/docs/PAGE/CLADC/DOCUMENTS/SUBDIVISIONPLAN.JPGThe unit we have put an offer on is located in the "Business" part of the map. I don't suppose you know the difference between "commercial and business"?
Btw, do you own commercial property? If so you do you use a property manager, and if so can I ask what %s you are paying?
cheers
wayne
Hi Hallg, Thanks for that. I will ring around and get some feedback. One thing I'm a little concerned about is a few special conditions in the contract. There are as follows;
- This offer is subject to the buyers approval of the Sellers Special Conditions.
- This offer is subject to the buyers approval of restrictions of used issued by both the City of Wanneroo & Landcorp.
I've asked for a copy of these (which the agent is sending through) though my concern was that there could be some conditions in there that make the place less attractive for a future tenant. I guess there question here would be to ask if it’s usual for the council and seller to issues such special restrictions or conditions? Rgds Wayne
hhmmm – this is an interesting post. I've been looking at Cairns and compared to Perth it's quite attractive – though i guess you could say that about most other states!
The rent returns seemed quite reasonable, though I guess this is because Cairns is more of a "volatile" region/city.
Hi Linda – I hope this is the case:)
I've heard that some FHOB's are holding off until the grant is passed through parliment as until it's passed they have to come up with the stamp duty first – then they recieve a refund on settlement?
Has anyone heard this? And if so do you know when it will be passed through parliment?
Hi Dazza,
I agree with what you are saying though most of the action amongst the lower end of the market has died down. I've had a house on the market for 3 months in Merriwa and not a sniff!
At the moment there are tenants in the property so it will help once they are out (in a couple of weeks) and I can have weekly home opens – though the thing is if I had put it on the market this time last year (for the same price) it would have sold within weeks!
Saying this though the "middle market" is doing great. Anything $450+ in my area (north of perth) seems to be moving at a good rate.
Once I sell this house I plan to "upgrade" for a rental in the "middle market" as there are still some bargains out there:)
cheers
wayne
Hi Guys,
Thanks all for the replies:) I manage to find some forms at http://www.propertydivas.com.au and also for WA specific at
http://www.docep.wa.gov.au/default_cp.asp?id=cp/dev_publications/forms&menu=menu_cp#bondscheers
wayne
Wayne Leech
http://www.WaynesGuide.com.au – Accommodation in Western Australia.
List your holiday home for FREE!cheers calvin;)
Good to hear from you! it’s been a while! Yeah I’ve started up a company on the side called OpenTravel (http://www.opentravel.com.au) I’ve moved away from Real estate in general as this is too competitive. I’m now focusing on holiday homes – eg, go to http://www.waynesguide.com.au and you’ll see hundreds of holiday homes in WA:)
Yeah hopefully if this takes off, plus property investing i can build a residual income:)
Are you still up at hedland? Or have you moved back to Perth? Lol – I can remember when we used to talk about IPs in karatha or hedland for $200k and thought these were expensive! The growth up north has been amazing!
cheers
wayne
Wayne Leech
http://www.WaynesGuide.com.au – Accommodation in Western Australia.
List your holiday home for FREE!
