Good morning all.
I was wondering if anybody had an answer to this scenario.
Lets say I can buy a property for 250k on a 3 to 6 month settlement. I have access to the property to do a cosmetic renovation within that 3-6 month period. My costs are as follows.
Purchase price 250k
Purchase costs 10k
Penovation costs 30k
Total 280k
I now know that the improved property is now worth
320k. I have done my home work on comparable prices for similar properties in the area.
I also have receipts for all works done as solid proof of the extent of the renovation.
If this information was presented to a financial institution prior to settlement, would they only give me 80% of original purchase price of 250k or would they now give me 80% of the improved value, 350k? This then would obviously give me access to the increased equity, 40k, at settlement.
And if so, who!
I have been told this is not possible, but it used to be.
Thanks for help.Scott
Hey Scotty..
Check out the creative financing section at:
https://www.propertyinvesting.com/strategies/creativefinancingPoint 4 – Steve has explained this here..
Personally I know of a few investors who have gained a sizeable portion of their portfolio using this technique…Bottom line is that you have to sell yourself and your chosen finacing technique to your lender..
Good Luck
Cheers
Pete
Hey Scotty..Check out the creative financing section at:
https://www.propertyinvesting.com/strategies/creativefinancingPoint 4 – Steve has explained this here..
Personally I know of a few investors who have gained a sizeable portion of their portfolio using this technique…Bottom line is that you have to sell yourself and your chosen finacing technique to your lender..
Good Luck
Cheers
Pete
Thank for the feedback Pete, much appreciated.Cheers,
Scotty
No probs..hope it cleared some things up…this is what the forum is for…good luck
Pete
Hi All & scotty
In my small experience 3 renovation properties. I try to buy them structurally sound, good area, but run down so I can get a better price. The bank will only give me 80% of my negotiated purchase price.
I then renovate them to living standard and then pay for a valuer to revalue. After renovations but before the tennant moves in. The improved valuation I then present back to the bank and they adjust the loan to 80% of this new valuation that I hold ( i.e valuation remains my property not the banks). Hopefully there is enough equity increase that it helps to buy the next property etc etc.Cheers Isagold
Hi Scotty
I recently wrote an article about this very question (i.e. no money down strategies, building property portfolios quickly, etc). I interviewed about 15 or so banks and a valuer. You can find the article on my website at http://www.prosolution.com.au. Personal Investor picked this article up (which is also on my site).
However, it’s 1MB so you may prefer me to send it by mail or email it to you. If so just email me at [email protected] I will mail/email it to you (and to anyone else).
This should give you a detailed answer to your questions.
Cheers
Stuart [
]Stuart,
Very good information in the article you mentioned. An area that interests myself and many others I would assume. I have a deal at the moment that may fall favourably within the criteria & shall be looking to finance in that way.
Thanks
EssykayThanks very much Essykay. I’m pleased that you found the info useful. Good luck with your future deals.
Cheers
Stu
]
The topic ‘Can you or can’t you?’ is closed to new replies.
