Has anyone been able to secure overseas loans,e.g.
Japanese 2%_to 4% interest rates???
thank you Dave…
Dave,
Not so easy if you are in Oz…. As to the banks it’s seen as an “overseas” investment, on many occassions they will only lend 65-70%.
You also have to contend with FOREX risk. at the moment, this is in your favour, but, if the Aussie drops suddenly, you will be faced with a margin call, and be asked to top up the loan……
Best way is to advertise for private lenders in A$. There are quite a few around overseas ( Aussie expats…. )
Cheers
Scott
Didn’t a few farmers go broke in the early 90’s getting overseas loans thru Westpac?? after the Oz $ went south
Spider
pay now play laterTo expand on pelican’s post – as a general rule, overseas borrowing commitments should be met out of income in the same currency. So if your mortgage payments are in Japanese yen, and your rental income is in Aussie dollars, then you’ve got a mismatch which exposes you to exchange rate risk.
The big companies mitigate this risk by entering into some form of hedging arrangement (usually with or through a bank) to “swap” their income stream into Japanese yen, or their mortgage obligations into Aussie dollars. It’s a sophisticated form of insurance, and there’ll obviously be a premium. But at least you’ve capped your risk. Unfortunately, this product is unlikely to be available to you unless you’re working off a few million dollars in cashflow.
Think this is silly? You only have to dig up stories of all those poor sods back in the eighties who borrowed low interest money from Lichtenstein and other fashionably exotic places, and literally lost their homes (or came close to it) when the exchange rates turned against them in a big way.
Cheers
Elysium-MDIY Residential Property Settlements in WA – the book coming soon! When I can get my act together…
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