All Topics / The Treasure Chest / Building a block of units

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  • Profile photo of vik_famvik_fam
    Member
    @vik_fam
    Join Date: 2003
    Post Count: 29

    Hi all,

    I want to buy a block of units as part of my portfolio. I am having huge amounts of trouble finding anything close to what I am looking for, as generally each unit is owned individually, but I want to own the whole block, and avoid body corp etc.

    My question is, has anyone built a block of units before? I have no idea how much a 6 x 2 brick block (think 1980s 6 pack), and I was wondering if anyone was able to give me some idea of where to start my budget.

    Any help greatly appreciated.

    Thanks,
    Victoria

    Reason can answer questions,but imagination has to ask them. — Ralph Gerard

    Profile photo of HomeLoanGuyHomeLoanGuy
    Member
    @homeloanguy
    Join Date: 2003
    Post Count: 26

    Before looking at building a six pack, check with your finance specialist. Not too many banks want to do anything above four units as a residential deal. Six pack may be a commercial deal (however AXA Home Loans may look at a six pack on occasion).

    Four pack, probably can get done at 90% LVR, six pack, commercial deal, may be 65 or 70% LVR.

    Gary Young
    Home Loan Connexion
    Mobile 0407 64 66 32
    Fax +61 7 4636 4841

    Profile photo of vik_famvik_fam
    Member
    @vik_fam
    Join Date: 2003
    Post Count: 29

    Thanks for the heads up, Gary.[:I]

    Would this be the same deal with buying an existing 6 pack? How about if it was 2 or 3 duplexes on a block?

    Thanks,
    Victoria

    Reason can answer questions,but imagination has to ask them. — Ralph Gerard

    Profile photo of HomeLoanGuyHomeLoanGuy
    Member
    @homeloanguy
    Join Date: 2003
    Post Count: 26

    Hi Victoria,

    It really comes down to how many titles the units are on. For instance, I researched a deal for an 8 pack of units. No bank would touch it, as it was on one title. However, if it had been built on two blocks (titles), they would have been happy to do the deal as residential finance at 90% LVR (max of 4 units per title).

    AXA Home Loans has told me repeatedly they will do six units on one title at 80% LVR, but haven’t had the chance to prove it yet.

    Is this helping you?

    Just so you know, I’m currently paying down my O/O home loan to gain sufficient equity to do a Lo-Doc deal to construct a duplex in Toowoomba or Dalby or Warwick. May even consider a triplex, but depends on the block of land at the time.

    Gary Young
    Home Loan Connexion
    Mobile 0407 64 66 32
    Fax +61 7 4636 4841

    Profile photo of wilandelwilandel
    Member
    @wilandel
    Join Date: 2003
    Post Count: 761

    Hi Victoria,

    They are around from time to time. In the last 6 months we have purchased a block of 4, and last week settled on a block of 5. Both +ve geared.

    We got 80% finance OK for both. Over 6 units gets tricky, and gets appraised on a case by case basis from what I believe (NAB).

    Don’t give up!!

    Good luck,
    Del [:)]

    Profile photo of calroncalron
    Participant
    @calron
    Join Date: 2003
    Post Count: 78

    wil..

    Where about’s did you find these blocks?? what was the cost for them??
    Were they strata or freehold title?
    whats sort of yield are they?

    My wife and I are interested in doing the same sort of thing and just looking at getting a few pointers

    Cheers

    Calron the Alcamist
    Turning things into gold is fun.
    [email protected][;)]

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    If you would like to construct the units you could get 100% finance based on the value of the end product only. No credit checks, tax returns etc needed. (Depending on the location). size doesn’t matter!

    From what I have seen ,unit construction works out to be about $130,000 per unit.

    Terry
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of calroncalron
    Participant
    @calron
    Join Date: 2003
    Post Count: 78

    Really??? How do you go about doing this??? If I can find the land in the right location??

    Whats the catch?

    what sort of terms would a loan like that have??
    Would you have to start paying b4 or after they’re built???

    Let me know how and I will come back to you when I find the where…

    Email at the address below if you like..

    I am learning something new every day….

    Cheers

    Calron the Alcamist
    Turning things into gold is fun.
    [email protected][;)]

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi Calron

    There is a catch-The interest rates are high. This is meant to be short term finance only, so once the project is completed you could refinance with a lower rate. It will also depend on the location, anywhere on the east coast may be OK, but not country areas.

    It works by getting 70% of the end value which is often enough to get 100% finance. based soley on valuation with no, credit checks, no financials etc (not even an application form).

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    There a number of different ways to find something like this. I suggest that the major effort is required in identifying the project. If the numbers stack up then most reputable brokers will be able to finance something like this.

    I think you need to focus on finding the deal – this will be your bottleneck!

    Cheers,

    Simon Macks
    Mortgage Hunter
    [email protected]
    0425 228 985

    Profile photo of vik_famvik_fam
    Member
    @vik_fam
    Join Date: 2003
    Post Count: 29

    Thanks for all of your advice…

    Another thing that concerns me is finding a reputable builder. I am very green, and don’t want to get ripped off. How do I judge what is a reasonable price and what is ‘she looks blonde, I’ll add on 25% dumb tax’.

    Other than location, what factors do I need to take into account when choosing land?

    Thanks again,
    Victoria

    Reason can answer questions,but imagination has to ask them. — Ralph Gerard

    Profile photo of MelanieMelanie
    Member
    @melanie
    Join Date: 2003
    Post Count: 382

    Hi Victoria,

    I am also keen to head down this path, it seems a lot more challenging and hopefully potentially rewarding than buy and hold.

    I’m doing a course soon – where do you live, I have come across a few good developers who may be able to help.

    [:)]
    Mel

    Profile photo of vik_famvik_fam
    Member
    @vik_fam
    Join Date: 2003
    Post Count: 29

    Hi Mel,

    I live on the North Side of Brisbane. Not sure if I want to look at Bris, or some of the smaller satalite towns… Ipswich, Gympie…

    Regards,
    Victoria
    [email protected]

    Reason can answer questions,but imagination has to ask them. — Ralph Gerard

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