Hi Folks,
I only read Steves books recently, but I cant believe how many positive cashflow properties there are, each one with the potential to bring me one step closer to financial independance. We worked out for ourselves that positive cashfow was better than losing money. Steve’s book cemented what we had realised.
The only thing I get stuck on is equity/capital (even though we have 7 properties in just 10 months). I have recently looked at a combined commercial residential building asking price is $300k+, in a thriving regional satelite town that has a current 10.5% return with potential for a 13%+ return with vacancies filled and market rates realised.
It is here I stumble. I have two more purchases underway, and the bank believe I am too highly geared (even though my properties return in excess of 16%) So I am frustrated. I cant grow my portfolio until I increase value or save cash. Does anyone have any suggestions on how I might close the deal mentioned above? I dont have enough information to do it as it stands.
I dont know how to “bird dog” properties, and as we are a fairly insular family, I lack a network.
I am considering asking the vendor to take a five year vendor finance loan for 100k to reduce my LVR to about 60% to make the deal more palatable to the bank, but dont know how to approach this. Any ideas are welcomed, even the “outside the square ones”.Thanks,
Jenny
Jenny,
If I were you then I will try to find an equity partner to close the deal. To do that you might need to set up a unit trust where both you and the partner as a trustee. You buy the property under the trust structure where the equity partner and you can borrow and close the deal.
Kind regards
Jet Dollars
“The road of some-day lead to the town of nowhere”Thanks. Is there a central point that you are aware of to source a money/equity partner?
Jenny
Start with family and friends (likeminded ones!) and then if worst comes to worst, I’m sure someone in this forum would consider it!
Who took my MONEY[?]
I would be happy to hear from anyone interested.
Where are all those people who are looking for a +CF deal?
Maybe they are all sleeping? Maybe since its a commercial property people are apprehensive?
Who took my MONEY[?]
It is only partly commercial.
6 tenanted residential units
and three shop fronts, two of these are tenanted.Maybe people need more information!
Who took my MONEY[?]
What like the sort of info they would require to do the deal and not involve me at all?
If anyone wants more info, they can contact me. I am happy to provide info, but I dont want to increase my competition in buying the property!.
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