Hi All,
Maybe I’m expressing the same frustration as everyone else in this forum, but I’d like people’s feedback anyway.
I’ve reached a point where I can’t go much further. The situation is that I’ve committed myself to the current house I’m living in (just finished renovating – going to auction in 8 wks), and have signed the contracts for 2 blocks of land – 1 to build my PPOR on and the other to build an investment property on in the same street. Have also paid deposit to builder for PPOR – building starts in November.
Maybe its just me being inpatient but I see alot of potential in the local market ‘offerings’ and am frustrated at the fact I can’t jump into any other investments until (probably) mid next year after my PPOR is built, and building is underway on my first investment property.
Thing is, I know the local market pretty well (live in a city of 90,000 ppl – so the area isnt that big!!) and feel more confident now that the steps I take to accumulate property are well thought out, and limiting my risks.
Does anyone have any advice on how I can go about establishing a relationship with a lender offering finance that wont jeodarise my building plans for November onwards?
Any input greatly appreciated! [
]Andrew.
Yes, slow down and relax for a while, don’t overcommit ypurself, free up the cash first.
The next deal is always around the corner, remember that cash flow is needed to service alll those ideas/loans.
I have gone over the top at times and all that happens is stress and anxiety, wealth creation does not necessarily happen more quickly.Hi Andrew,
I agree with Regina.
Rome wasn’t built in a day.
Remember the old story about the turtle and the hare? The hare run out of puff and the turtle just walked home, slow and steady.[^]
My opion anyway,
Good luck,Del
I agree. Relax. Interest rates aren’t going up that quickly.
You need to combine cash flow properties with capital gain kills like renovations or quick land capital gains. I guess the banks love turnover.
Andrew
Your going to have to come up with deposits to keep on going. If you can come up with about 20% deposits, you should be able to keep on borrowing indefinetly. If you can only come up with 5%, LMI will apply and then lots of restrictions
You can come up with deposits by growth in the property or by saving it up.
Another way is to borrow the deposits. One of my clients used a couple of credit cards for the deposit. But you have to know what you are doing.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry
Finding deposits still isn’t the end of the problem, as you may still have problems switching to low doc loans at that point.
Apparently because you’ve done a number of full disclosure loans, then want to switch to low doc, lenders get suspcious. At least, this is what’s now happening to me.
So here I was thinking that if I had my investors putting in 20% I could continue on …. not so far. sigh… And yes, I am using a company/trust structure, but as I’ve said before, going guarantor on the company loans gets marked on our credit file every time.
Any ideas?Keep smiling
FelicityAndrewkimmber2, putting much of your hard earned money into PPOR also not a clever idea especially if you want to own keeps of IPs.
Take it easy. You don’t want to see yourself in lot of trouble servicing current commitments.
Ta, Paul
Felicity
yes you have to be careful as most low doc loans are actually mortgage insured-even if they are under 80% LVR. I lot of people think they can jsut increase their income ebcause they don’t ahve to provide proof. BUT if you go to the ING bank and say you earn $30,000 pa, and then later on go to Integris for a low doc loan and say you are actually earning $60,000 the mortgage insurer may already have your details, and query why your income suddenly doubled.
Here are some low doc lenders that don’t mortgage insure:
ING-up to 76% LVR
Adelaide Bank-up to 76% LVR
Suncorp – Up to 80% LVR
HSBC – 70% LVR
ANZ -65% lvr
St George – 65%Now these lenders are not going to lend to you forever, some have maximum exposure levels per client. But if you switch and swap between lenders, you can go very far. And as long as you can come up with the deposits, you can go on forever if you are prepared to pay the price in high interest rates. There are small private lenders that don’t do craa checks, some don’t even have application forms, they just go on the security value alone. Rates start at about 8% and go up to 16% (highest heard of so far).
And then there is short term cavaet lending, rates around 8% per month.
Sorry Andrew, bit of a side track here.
Terryw
[email protected]Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry
Thanks for your reply, this may well be the problem.
Funny part is, my income really has grown enormously, thanks to wrapping! hehehe
Mind you, I’m still getting the “exposure” line too from one lender, the size of my mortgage repayment each month makes them nervous, regardless of how much income I can show to cover it. Not sure why that is.Keep smiling
Felicity
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