Hi All
A question about financing wraps compared with normal IPs.
Say you buy an IP and put a tenant in and it is +CSH then you should find it fairly easy to secure another loan from the banks for your next IP as you are earning more income plus you have whatever equity in the home.
How does it work with wraps? Ok you have more income but you can not use the equity in the home and with most banks you can’t tell them that you are wrapping.
So when you have bought your first wrap, how do you go about securing a loan for the second, third, tenth etc.
Anyone!
Delboy[cap]
Del
I think this is one of the great mysteries of all time for the small time wrapper.
I now it has been raised on the forum many times and answered just as many.
I will interested to see what answers you get to your posts over the next day or 2.
We have the majority of our wrap finance through one of the 4 major Banks and are now dealing directly with their credit dept.
What started out 8 years ago as a few loans to assist our development business has grown and grown into a multi million dollar business.
I think starting out and disclosing that the property is to be wrapped in this day and age is a lot harder than it was.
Cheers Richard
richard at fhog.com.au
http://www.fhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
Originally posted by Qlds007:Del
I think starting out and disclosing that the property is to be wrapped in this day and age is a lot harder than it was.Cheers Richard
Hi Richard,
Just curious – what makes you say this and why?
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Derek
I know as a fact the major Bank that we deal will not allow their local branches or origination team to accept these deals.
Our deals where accepted because the institution concerned wanted to retain our development business and thought they may loose this to a competitor.
I have spoken to many of the other finance brokers on this site and think they would all agree that lenders have shyed away from this type of lending.
Happy to be corrected.
Cheers Richard
richard at fhog.com.au
http://www.fhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
Hi Richard,
I am not a wrapper and I was just curious for my own knowledge and was wondering whether or not the increased difficulty was related to some of the negative (and loud) media hype or just a change in policy or a reflection on changing bank policies or …………
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
I think the hardest time for a wrapper is somewhere from around 3 houses to around 10 or more.
I’ve experienced something very similar to what Richard is describing – I was dealing with a major bank around #5 (retail banking), but they refused to do any more. And yet at #12 the same bank (its business banking section) was keen to meet with me and see if they could lend me money for my business.
It didn’t come to anything (yet – need another tax return) but it was very interesting.
Go figure….Keep smiling
Felicity
Hi Delboy
It used to be easy to get wrap finance, but with recent changes in bank policies (probably due, in part at least, to bad publicity) it has become very difficult.
In theory, having positive cashflow will help your serviceability. But you will still have to come up with deposits for your purchases and you cannot using any of the equity built up in the wrapped properties. Getting large deposits off wrappees helps your position a lot.
Terryw
Discover Home Loans
North Sydney
[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
You must be logged in to reply to this topic. If you don't have an account, you can register here.
