Heading to Bankruptcy :O(

You are posting just fine Cazza.

Heres a few ideas:

Advertise the 2br unit in Homebush for
“$530,000 WITH SPECIAL 4% FINANCE (for first year).” Just get agent to whack a 4% financing bit in the ad. Make sure it stands out.

The buyer will still get his normal financing from bank which would be about 7.5% at the moment.
He may borrow 80% LVR which would be a loan of $424,000.
Interest Repayments of $611 approx per week.BUT>>>> because you are offering that the buyer will only be paying 4% in the first year, his repayments will drop to $326 approx per week.!!!! You will sell this QUICK!!

All it will cost you is 3.5% of $424000 = $14840. So you are effectively getting $515,160 for unit..
Simply pay this money into an account at settlement and instruct the buyer to have his loan draw partly out of this for each repayment for 1 year. You just write one cheque which comes from the money you were paid anyway.

ALTERNATIVELY,–

Advertise some of your properties with “No deposit needed”.. And then when a buyer comes to you, that is short on deposit. Simply get a property lawyer to write up a contract whereby the buyer pays you the deposit over a period of time (whatever you are comfortable with and can negotiate).

So one way will get you buyers who want to save $300 bucks a week.

The other way will get you buyers who haven’t quite got a deposit.

Whack these into your advertising. Make sure they REALLY stand out.

GO GO GO

Lifexperience

Hello Cazza

Good to see you posting. It gives us a chance to support and encourage you.

Have you spoken to your bank manager yet and was he helpful with a business plan? I’m sure many of us would be interested if you are willing to share this.

It’s not up to your real estate agent to say what they think of LifeX s’ suggestions. It’s up to you to tell them what you want. You could even ask him to put a heading in saying something like

“Forget interest rate rises for a year”

Anything to make your property more attractive to the buyer than all the others on the market in the area.

Your worst case senario would be that the buyer borrows 106% of the purchase price ($561,800) and that interest rates immediatly went up by 1% …. highly improbable … but even in this senario the interst for the year would cost you $25,281 which is well within the $30,000 that you are willing to drop the price by. Naturally if the buyer gets a better interest than 7.5% your share will be smaller than 3.5%.

After working out about how much interest you would be up for, I would put this into an offset account against your private home loan and instruct your bank to transfer the difference in interest to the buyers loan account each fortnight/month for 12 months. This way your saving yourself some non tax deductible debt at the same time.

The interst you pay on the buyers behalf should be tax deductible for you. Check with your accountant on this.

Yes, after a year the purchaser would just pay the full interest themselves. Naturally this needs to be correctly stated in the sales contract so you need to speak to your lawyer to get this right.

Are your advertisments on realestate.com. Are your agents being active enough on your behalf or have they given up.

Rooting for you [thumbsupanim]

Elka

Hello LifeX

How would that work if interest rates went up before the year was up.?

Cheers [smiling]
Elka

hi Elkham,

You specify that you will discount by 3.5% at the current int. rates.

If the rates go up, you’re still discounting by 3.5%.

So your amount is not affected.[]

Lifexperience