All Topics / Finance / WHAT’S THE BANKS PROBLEM???

Viewing 18 posts - 1 through 18 (of 18 total)
  • Profile photo of wealthangelwealthangel
    Member
    @wealthangel
    Join Date: 2006
    Post Count: 12

    Hi guys,
    I just wanted to know if anybody else was or has ever had the same problem that im having at the moment with Banks…..
    The problem or as i would like to call them “challenge” is that i have plently of equity in my portfolio, all of my properties are CF+ but the banks dont seem to want to loan me any more money to further in hance my portfolio.
    I like to buy older homes and renovate them to a certain standard hence increasing the rent so that i do have that CF+ from day one. On my last deal i made $150,000 in 30 days just by doing abit of hard yakka…… that property returns approx $100 per week in CF+ income.
    The banks still dont seem to get it……… do you know of any one or any business other then mainstream banks that investors like me can work with to increase my portfolio?? Im so over the check list that the major banks use to see whether or not you are a high risk borrower…… i hate being stuck in a box.[thumbsdownanim
    Apparently im assett rich and cashflow poor due to my work as a property manager. But HELLO thats why i am doing what i do to make sure that i can have that cashflow……… the banks just simply dont get it. [satan]
    Sorry if i sound a little angry tonight – i guess i just dont like to be held back from the awesome deals that i come across in a daily basis. I know steve would probably say, get an investment partner that is cash rich but time poor. But i like to do most of this on my own, not saying i wouldnt be open to a partnership like that, but there must be finance available to a girl like me??
    PLEASE HELP!!!!!!!!
    [specool]

    Wealth Angel

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Probably just have to try a different lender or 2. If you have equity, you will be able to get finance.

    Terryw
    Discover Home Loans
    Parramatta
    [email protected]
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    Just send me a blank email, with “subscribe” in subject line.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

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

    Terry is right equity is king but in your position equity and cash flow is even better.

    Time to say goodbye Bank and hello independant mortgage broker.

    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 redwingredwing
    Participant
    @redwing
    Join Date: 2003
    Post Count: 2,733

    Here’s some questions for you before we can better answer..

    What is your LVR?

    What is your DSR?

    “Money is a currency, like electricity and it requires momentum to make it Effective”
    Count The Currency With This Online Positive Cashflow Calculator

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

    Hi guys,
    Thanks for your input. My total debt with the bank is approx $653,000 and my equity is approx $350,000. The Bank said they wont loan me any more money to build my portfolio…..
    I also spoke to a couple of mortgage brokers and they were even worse as they said the most anybody would loan me would be $700,000 total debt. Which means i can only borrow a further $47,000 yiphee.
    I had one “young” mortgage broker who tried to explain to me what equity was and that it was my income from my “job” that was letting me down. He didnt consider the cashflow of any of my properties……..
    Can any of you good people recommend somebody – non mainstream who has “some idea” to what we investors need to make a deal come together. Thank you so much for your wonderful information……… i really appreicate it.
    Thanks guys,
    [jerry]

    Wealth Angel

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Looks like your properties are worth about $1,000,000 mil all up.

    If you cannot qualify for a standard loan, depending on locations etc, you could possibly get 80% of this by using a Low/No Doc loan.

    That is about $150,000 extra above what you have now.

    Then you can use this as a deposit on another property – being able to buy another $600,000 worth of property. (this could vary depending in the locations, actual valuations and types of ppty)

    Terryw
    Discover Home Loans
    Parramatta
    [email protected]
    Sign up to my mailing list.
    Just send me a blank email, with “subscribe” in subject line.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

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

    all of my properties are CF+

    Hi WA,

    You haven’t identified where your properties are located and this may be important.

    As i understand it (one of the brokers will correct me if I am wrong) If they are in more distant places a no doc loan may be a little difficult to obtain as some no doc lenders are averse to lending in some more distant parts.

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

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

    Yes location is important but it appears to me that no one has actually considered that the IP’s you are purchasing are generating a rental income.

    At 80% nodoc over $500K the LMI will be expensive so structure is important to ensure that you get value for money.

    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 wealthangelwealthangel
    Member
    @wealthangel
    Join Date: 2006
    Post Count: 12

    Hi guys,
    Thanks so much for all of the information that you have shared. My properties are mostly situated in Coffs Harbour – NSW and Nambucca Heads NSW.
    Both have huge Capital growth rates but i managed to buy them before the boom hit the east coast hence why they are CF+
    Cheers
    [jerry]

    Wealth Angel

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Looks like both locations are eligible for LMI with Low Docs up to $500,000 at 80% LVR.

    Terryw
    Discover Home Loans
    Parramatta
    [email protected]
    Sign up to my mailing list.
    Just send me a blank email, with “subscribe” in subject line.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of warrenwilliamwarrenwilliam
    Member
    @warrenwilliam
    Join Date: 2006
    Post Count: 21

    looks like every mortgage broker on this site is tryin to sweet talk you which is great as long as you get the money your after at the right price.[cigar][cigar]

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

    WW

    If you are referrring to Terry i can assure you he is one of the most respected long standing members on the site and is only there to offer advice.

    Terry certainly gets my vote in Sydney.

    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 MilneStuart Milne
    Member
    @stuart-milne
    Join Date: 2006
    Post Count: 196

    I am laughing reading this one because its a very easily solved problem.

    And I can’t think why you would be needing LMI? Apparently nobody has considered your situation properly. You are fine for equity and cashflow so getting the money for you would be a lot easier than the standard loans I see day in Day out!!

    Best of luck anyway.

    Stuart Milne
    Non-Conforming Specialist
    READY Mortgages
    http://www.readymortgages.com.au
    [email protected]
    Mob: 0404 056 055

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

    Must admit i am chuckling at your answer Stuart.

    I can’t see that anyone who has answered this one has told Wealth there is a problem either.

    Richard Taylor
    Residential & Commercial Finance Broker
    **Lodoc Commercial loans from 7.19%**
    Licensed Financial Planner
    http://www.yourstatefinance.com
    [email protected]
    Ph: 07-3720 1888

    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 MilneStuart Milne
    Member
    @stuart-milne
    Join Date: 2006
    Post Count: 196

    Wealth was the one with the problem Richard

    Stuart Milne
    Non-Conforming Specialist
    READY Mortgages
    http://www.readymortgages.com.au
    [email protected]
    Mob: 0404 056 055

    Profile photo of brad_2brad_2
    Participant
    @brad_2
    Join Date: 2004
    Post Count: 4

    try NO DOC lending as long as you have 70% LVR only need ABN for 1 day. easy! you declare your income and dont have to prove anything. This is major problem with most self employed people i come across. due to everyone trying to reduce tax etc. come back to me with any further questions. Brad

    Profile photo of andrew8andrew8
    Participant
    @andrew8
    Join Date: 2002
    Post Count: 21

    Steve and Dave mention in their seminars (and perhaps in Wealth Guardian) that banks have a maximum amount they want to loan to a person, regardless of their cashflow and asset position.

    The solution is to have properties owned by an entity (or entities), instead of owned by the individual.

    The individual controls the entity(s) (usually best if it is a trust with a corporate trustee) and guarantees the loans to the entity(s). Therefore the loans are conditional liabilities of the individual, not actual liabilities, therefore do not show up on the individual’s ‘balance sheet’.

    When an entity reaches the loan ‘limit’ a bank considers maximum, the individual uses another (perhaps new) entity to own and borrow for the next set of properties.

    Suggest you consult your solicitor/accountant on this suggestion as I am not licenced to give advice.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Andrew, These loans still show up on your CRAA. Since banks require personal guarrantees, these loans will be assessed in your serviceability (if you tell the lender about them) and creating a new entity will not help in this regard – although it may be good practice.

    Terryw
    Discover Home Loans
    Parramatta
    [email protected]
    Sign up to my mailing list.
    Just send me a blank email, with “subscribe” in subject line.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

Viewing 18 posts - 1 through 18 (of 18 total)

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