Hi All,
First, thank you all for your patience with me. I know I've been asking many questions but as soon as I've completed my first deal I'll share my experience. I'm currently at the stage of getting a loan pre-approval (mortgage broker).
So, after a successful wrap completion I'd like to repeat the procedure (duh!
).How would the bank look at my serviceability? I heard that many banks do not grasp/look positively on wraps. How true is that?
Because to my understanding as a successful wrap brings me cashflow, my serviceability should improve and not decline.
What is the proper argumentation to get more money to continue to invest?
Are there banks that are more open to wraps and acknowledge them as income?
Thanks again,
Emil
Emil
I think this should be directed at your mortgage broker.
Presumably he is familar with wrapping and the concept of instalment finance.
Unless you do it for a living like one of my companies i dont think many lenders will take wrap income into consideration. I am aware of a couple of lenders but that is about it.
Richard Taylor | Australia's leading private lender
Thanks Richard, I'll ask him. I just thought I'd do that in due time i.e. let's get the first deal done first (he's currently looking for the right loan for that).
So what if I founded a company for "wrapping business" that acts as a trustee in which the wraps are kept. Would the lenders look upon this constellation "more favorably"?
Cheers,
EmilRegretfully no you would probably would cause yourself more problems.
Richard Taylor | Australia's leading private lender
So it's the size (of the portfolio) that matters most?
I guess what I'm asking is at which point the bank turns around and starts asking you if you want to borrow some more…Cheers,
EmilI don't know of any lender that will lend for wraps (installment contracts). Some have previously threatened to cancel the accreditation of any broker that is involved in submitting deals for wrappers.
So ask your broker will she/he be disclosing this info.
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
Terry,
I am aware of a couple however really are only interested if it is considered as a business and there is some element of volume.Richard Taylor | Australia's leading private lender
Hey Guys,I asked my MB. He won't be disclosing the fact that we're doing a wrap. In fact he said "If you know any bank that would lend for wraps, let me know". So as far as the banks are concerned, I'm going to rent out the property. That is a pity because I'll reach sericeability limits. I hope to have enough deposit then to do low docs. I guess that's the way to go.
Cheers,EmilHi Emilov,
Have you ever thought of doing a JV. That is bring in someone who has the money and you put the deal together. You see you do that on his/ hers financials so there is no limit to the number of these you can do.
Or the second thing you might want to consider is get the seller to finance you for a period of 2-5 years and then you can refinance them out….Hope that helped.
Happy Days,Beck
Hi Beck,
Both ideas sound interesting. Could I trouble you to explain some more? (or alternatively point me to a reliable source of information)Thanks,
Emil
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