All Topics / The Treasure Chest / Cashflow positive with no money down in Australia

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  • Profile photo of AllanFCAllanFC
    Participant
    @allanfc
    Join Date: 2003
    Post Count: 25
    September 18, 2003 - 12:14 am

    Hi,

    I’m a property investor originally from the US but now based in Sydney. I have just recently bought few properties in Queensland with no money down and at the same time they have $30 positive cashflow every week. My question is in regards to structuring loan to finance my next few cashflow positive properties.

    Being originally from the US, I have managed to use creative financing to buy cashflow positive properties from day one. I have been taught that a good way to build up my property porfolio faster is to concentrate on buying properties with the help of owner financing example, 80% of the purchase price from bank or hardmoney lenders and 20% vendor financing. By using this type of creative financing allows me to buy my next properties without waiting for the other properties that I already have to appreciate before I could use the equity as collateral to fund my next investments.

    Is vendor financing common in Australia? Can I use this type of creative financing here to fund my investments? I have tried asking sellers here in Australia whether they would carry some of the mortgage for me but unfortunately, most or all the people I got in contact with are not familiar with the concept of vendor financing.

    Thanks.

    Kind regards,
    Allan

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781
    September 18, 2003 - 12:38 am

    It is not common here in residential investments. Having said that it is not unusual with farming properties and you may find rural people a little more receptive with the concepts along with their solicitors.

    I guess it is up to your negotiating skills.

    There are 100% lending products but they are a little more expensive and have some fairly rigid rules.

    Best of luck and I would love to hear how you go.

    Cheers,

    Simon Macks
    Mortgage Hunter
    [email protected]
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of AllanFCAllanFC
    Participant
    @allanfc
    Join Date: 2003
    Post Count: 25
    September 18, 2003 - 7:54 am

    Thanks for the advice Simon. I’ll definitely give it a try.

    Actually, one of the deals that I have structured in the US using creative financing involved not just the seller but I got the realtor involved too, i asked her to leave some of her 6% commission on the deal and I’ll pay her 7%interest on her commision and luckily she agreed. I had to use multiple loans ie 4 loans to be exact to close on the deal and at the end it is still positive cashflow, it is only a few dollars positive income every week but hey cash is cash and it only took me 3 days to structure those loans.

    Got any advice on what kind of creative financing strategies I could use here in Australia?

    Thanks.

    Kind regards,
    Allan

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