Hey all you bright sparks out there….
I have finally run out of cash for deposits and still have a lot of deals on the table. HOw do I continue to grow if I have run out of the cold hard stuff to move tothe next stage?We have a hand full of Investment properties and all are either Neutrally geared or postive cashflowing with a variety of renters, Wraps, Lease Options and second mortages to achieve the cashflow needed to sustain continued growth.
Our lending capacity gets better each time we do it …
We do have a number of options:
1. Refinance our IP’s and use funds for reinvesting directly into the next few.
2. Sell up our own PPOR to progress
3. Find money partners… have done this twice so far … however have run out of people that want anything to do with property as the flavour of the month is now shares!Any more ideas? I often wonder what Steve and Dave did when they must have hit hte brick wall of finance … and suspect they already had a pool of thier own accountancy clientelle to obtain funding.
The problem with private funding is that the lenders still want to see the source of the deposit and how it came to be. Or they will accept a gifting certificate and lower leverage (down from 95% to 80%).
HELP … if you can…… all I want to do is consistantly plod along and continue to buy , buy buy!!!
have kept up a good momentum lately @ 2 month interval purchases…
Cheers
KiwiWhat about keeping a certain amount in your account. If they want to see deposit (usually don’t these days), then show them this, but you can still borrow money from elsewhere. This may be hard to do if you want to use all your money for deposits, but it will also act as a buffer if things go wrong.
What about increasing the loan on your PPOR instead of selling?
Terryw
Discover Home Loans
Parramatta
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Originally posted by Terryw:What about keeping a certain amount in your account. If they want to see deposit (usually don’t these days), then show them this, but you can still borrow money from elsewhere. This may be hard to do if you want to use all your money for deposits, but it will also act as a buffer if things go wrong.
What about increasing the loan on your PPOR instead of selling?
Terryw
Discover Home Loans
Parramatta
[email protected]
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Just send me a blank email, with “subscribe†in subject line.Terry, Great Idae… I did this a couple of times too (Shhhh… don’t tell the banks)…. they sorrt of never worked out that I have done it and never asked the question…. so I just kept buying … although I ran out of finance source…. so am now in the situation that I do not hav the cash reserves to proceed…. am I missing something else ????
Come on people idease … and great post TERRY… Great to see insight.
Cheers
KiwiHi Kiwi-Fulla
It sounds like it may be time to realise some profits to use for the next purchases. Steve calls it the multiply by division.
The way it works is sell off 1 property that has had some capital gain and use the released equity as deposit to buy 2 or more properties. Repeat process.
If you were to refinance the IP’s this has the potential to make them -ve and refinancing the PPOR would increase yourepayments, and this may not be OK for you.
Mark
“Is this taking us CLOSER to our goal?”
Hi Kiwi,
I have heard people using a personal loan for deposits,though i havent been game to try this yet.Providing you can service this and the higher interest would work on a higher LVR
you could always refinance out if you have increased equity and pay the personal loan back to get a better interest rate after a while.
Cheers
Personal Loans are used for deposits in increasingly common numbers these days. I’ve done three in the last week alone. There is a lender who will do this and that is all they do. There is an artform to it though and you may find it will take a while for it to turn your I.P. in a CF+ Position although this is entirely up to yourself. Otherwise there are always 100% investment loans available?
Some food for thought…
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055The only trouble with personal loans is, they can be harder to get than the home loan! I have seen a few use credit cards for deposits.
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
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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