Here are my details:
Home equity of around $340k (bank valuation) plus (owe approx $335k on 4yrs fixed @ 6.74%).
Equity of 40k /owe 105k on an IP (a 1/3 share) that returns $150 per week. Not sure if I can access this equity as all owners are guarrantors for each other.
Combined income of $170k. Cash of arounf 20k.
Here are my plans:
In the process of purchasing an IP for $310k + costs (Returns $225 per week). It is a subdividable block in Brisbane that I would like to develop for a further cost of around $180k+ with an eventual return of approx $650/week in total. Hopefully will create $100k equity.
I intend to buy into a business syndicate for $250k that will return 8-10% per annum.
I would like to continue to purchase IP's as my finances allow with an aim of borrowing against equity in IP's rather than my own home. I would like to know how to avoid paying LMI and at the same time use a minimum of cash.
Is all this achievable? Any ideas on a suitable strategy would be appreciated.
ThanksIf you are looking at avoiding LMI then you will probably need to keep the LVR to less than 80% and without actual figures it is hard know whether the available equity refers to 100% borrowing or 80%.
If we assume your valuation is $775K on your PPOR then 80% of this figure would be $620K less your existing loan of $335K giving available borrowing of $285,000. If you take out an 80% loan on the IP then 20% would be $62,000 plus acqusition costs.
Assuming this leaves you with $200K minus the costs of developing it at $180K this will not leave you with much money left.
You could always look to refinance once the development has taken place and this will reimburse your cash funds.
However dependant on what the work to be done is will take time and would mean a delay in investing in the sydnicate.
All of course revolves around one thing and that is serviceability. Without this you wont be go forward at all without some nodoc / lodoc style of loan.
With more information a specific answer cannot be given.
Richard Taylor | Australia's leading private lender
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