All Topics / Finance / Master Facility (MF)

Is now a good time to buy real estate?
Viewing 16 posts - 1 through 16 (of 16 total)
  • Profile photo of fbd1fbd1
    Member
    @fbd1
    Join Date: 2006
    Post Count: 65

    How does one borrow the deposit fro the MF from the bank to use as cashdown? What do you tell the bank you need the money for? Do I borrow 20%deposit money from MF& then borrow the other 80% from another bank?
    Eg. We own a home 250K with no money owing. How much can that MF give us to use as a deposit? And what do you tell bank what needed for? And is it the same when I borrow against it again? What is the %age you should borrow against the MF?

    I have a deal that is more money than I can raise on my own. How can I get more money? If a property is positive geared & fully tenanted, shouldn’t a broker lend the money in full on the fact that it already runs on a profit? (I think is is 80%)

    Profile photo of brahmsbrahms
    Participant
    @brahms
    Join Date: 2004
    Post Count: 485

    i don’t understand a word of this, but the answer is yes, or no. I think…

    cheers

    brahms
    Purveyor of Fine Finances
    aka Mortgage Broker Brisbane

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    MF = Line of Credit?

    Derek
    [email protected]
    http://www.pis.theinvestorsclub.com.au
    0409 882 958
    Skype – derekjones2113

    Profile photo of brahmsbrahms
    Participant
    @brahms
    Join Date: 2004
    Post Count: 485

    oohh, all i could think of was Mo Fo, My Funder or Male Friend ! oops that could have be a bit of a faux pas!

    well then fdb, if you already have an MF aka LOC then u simply draw down required funds and establish new loan to complete settlement.

    Its a pretty straightforward process, simply engage the services of a proficient mortgage broker to sort it for you.

    cheers

    brahms
    Purveyor of Fine Finances
    aka Mortgage Broker Brisbane

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    I am with Brahms totally lost.

    Richard Taylor
    Residential & Commercial Finance Broker
    **Lodoc Commercial loans from 7.39%**
    Licensed Financial Planner
    Ph: 07 3720 1888
    [email protected]

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of fbd1fbd1
    Member
    @fbd1
    Join Date: 2006
    Post Count: 65

    What I mean is that the master facility has no debt owing. It is valued at 250K. If I want to borrow 20% from that and then 80% from another bank to get the full 100% of IP is that too risky? I believe that we will only get up to 80% of the property value from the main borrower. I don’t have any other funds to put with this so is this how I get the other 20%? Does that make more sense now?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    fbd1

    Are you referring to your PPOR as the Master Facility if so yes that is a sensible way to go. Are you purchasing the IP in Trust?

    Richard Taylor
    Residential & Commercial Finance Broker
    **Lodoc Commercial loans from 7.39%**
    Licensed Financial Planner
    Ph: 07 3720 1888
    [email protected]

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of fbd1fbd1
    Member
    @fbd1
    Join Date: 2006
    Post Count: 65

    Yes I am talking about PPOR as MF and thank you for your response.[blush2]
    And yes I would be buying the IP in company trust.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    No problem
    I think you mean you will be buying the property in Trust with a Corporate Trustee.

    Richard Taylor
    Residential & Commercial Finance Broker
    **Lodoc Commercial loans from 7.39%**
    Licensed Financial Planner
    Ph: 07 3720 1888
    [email protected]

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of Stuart WemyssStuart Wemyss
    Member
    @stuart-wemyss
    Join Date: 2003
    Post Count: 598

    I am probably to blame for the MF terminology. I used it in my article: http://www.prosolution.com.au/articles/structure.pdf

    How does one borrow the deposit fro the MF from the bank to use as cashdown?
    You establish a new loan against a security (property).
    What do you tell the bank you need the money for?
    Future investing to purchase more property.
    Do I borrow 20%deposit money from MF& then borrow the other 80% from another bank?
    You can use another lender if you like. In my opinion it depends on who’s going to give you the best deal.
    Eg. We own a home 250K with no money owing. How much can that MF give us to use as a deposit?
    80% of $250k = $200k. This will give you enough money to purchase $800k of property. Use the MF for 20% plus costs and get a new separate loan for the remaining 80%.
    And what do you tell bank what needed for?
    Once again, future investment purposes.
    And is it the same when I borrow against it again?
    No, just establish one loan for $200k.
    What is the %age you should borrow against the MF?
    80% or whatever you need.

    I have a deal that is more money than I can raise on my own. How can I get more money?
    Rob a bank (althought this is a short term solution). Partner with someone else. Look for a smaller deal.
    If a property is positive geared & fully tenanted, shouldn’t a broker lend the money in full on the fact that it already runs on a profit? (I think is is 80%)
    No, Most lenders only take 80% of rental income and look at loan repayments on a P&I basis at a higher benchmark rate.

    Cheers

    Stu

    Profile photo of ShwingShwing
    Participant
    @shwing
    Join Date: 2005
    Post Count: 219

    Well dissected Stu.
    Like your work.
    Cheers

    Mal

    Getting out of your comfort zone, can help you become comfortable

    Profile photo of crushercrusher
    Participant
    @crusher
    Join Date: 2002
    Post Count: 186

    Hi All,

    It would be worth calling HSBC to find out if they still take 100% of rental income into account. I’m 99% sure that they use to do it.

    Todd Burns
    http://www.freepropertyhelp.com.au

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Heh Stuart

    We were looking at someone to blame for not being able to understand the original post so thanks for sticking your hand up.

    Richard Taylor
    Residential & Commercial Finance Broker
    **Lodoc Commercial loans from 7.39%**
    Licensed Financial Planner
    Ph: 07 3720 1888
    [email protected]

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of fbd1fbd1
    Member
    @fbd1
    Join Date: 2006
    Post Count: 65

    one more question relating to this???
    If I establish a loan of $200K against PPOR, and for example only need $100K for an IP deposit, what will happen to the other 100K that has been approved? do I redraw when it is needed to buy another IP? Or will I have to establish another loan at a later date against the PPOR?

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Hi fbd,

    If you set up your line of credit for $200K and only use $100K then you have at your hands an additional (and easily accessible) $100K. This will remain in the account until drawn.

    In essence your first $100K is deposit for property one and the other $100K is available for another deposit.

    In setting up the initial facility of $200K the bank has established that you have sufficient security and income to service the $200K when fully drawn. They would have charged fees etc based on $200K but will only charge interest on the amount drawn.

    Derek
    [email protected]
    http://www.pis.theinvestorsclub.com.au
    0409 882 958
    Skype – derekjones2113

    Profile photo of wealthangelwealthangel
    Member
    @wealthangel
    Join Date: 2006
    Post Count: 12

    Hi Guys,
    Thats fantastic information – Stu you ledgen……
    I was just looking at different ways of funding another investment and that has helped me out dramatly. Well done. At first i was abit puzzled about the jargin but now its so clear and simple.
    [jerry]

    Wealth Angel

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