Here is the deal
Block of 5 units (2x2bed 1x1bed) Purchase Price $430K, All units tenanted to large organisation with 28 months remaining on the lease. Annual rent is $52000pa. All units are on the one title.
I am unable to finance this deal myself and would like some assistance and advice. Have thought about strata t the lot and selling individually (2 bed sell for approx $120K, 1 bed $100K). Also thought could do an option to buy, stata title then onsell or sell option….
I have never worked a deal other than normal purchase (20% deposit in own name). Would appreciate some help from fellow investors who are higher up the experience ladder than myself.
You say you are unable to finance the deal yourself but have not said why.
What would the property value up at?, how much can you borrow on the property?, do you have equity in other properties?, have you looked at unsecured finance, or vendor finance or even a partner?
It is difficult to assist without all the information. Firstly I would look at getting a contract on the property with a delayed settlement, this way you won’t get gazzumped.
If you can’t raise the finance after exploring all your options then look at on selling the property before you have to settle.
Cheers
JeffThanks Jeff. I do not have the necessary cash or equity to purchase myself, I believe i could service a loan that is why i am looking for other alternatives. I am not sure about buying it and reselling as a block – not alot of capital growth in its present location but there is a very strong rental market – actually rentals are not done by filling out application forms – done by an auction process on who is willing to pay the most per week to rent it…
Just not sure what approach to use – rather inexperienced at this sort of thing
Scott
Scott, how far have you gone with this?
Have you been to a broker with the figures? Have you spoken with a valuer? Have you asked the vendor to leave some money in at ?% interest?
You need to determine how much you will require as a deposit. I once paid the deposit on a house with a credit card at 28% interest. This was a short term measure until I was able to revalue and refinance.
If the figures stack up you will get the finance, it’s just the interest rates may be a little higher. Otherwise look for a partner (50% of something is better than 100% of nothing)
There are some mortgage brokers who are active on this forum, perhaps you should make contact with one of them.
Best of luck
Jeff
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