hi there,
i recently came across the cashflowcapital website. they do not only offer cash flow positive IP's but also finance…they offer an unbelievable 3.95%. Well, some conditions apply, like the LVR must be 80%/20% and no LMI has to be paid. It seems not everyone qulifies for that. But still, you could loan the 20% deposit for that from another lender at standard rate and buy the 80% of the property at 3.95% …that would truly be cashflow positive.
My question: is that real or just some hoax ? Has anyone tried their finance ?? It sounds to good to be true …
Thanks
ThomasIf it sounds to good to be true it normally is.
Where do the funds come from. Are big profits built into the property.
Nigel Kibel | Property Know How
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Nigel, where the funds are coming from is exactly what I don't understand either. Maybe you are right…to good to be true. But 3.95% sounds very appealing, doesn't it ?
Thanks
ThomasHi Thonas,
I've encountered this type of loan, and basically what happens is that the lender charges around 4% interest but also capitalises 4% on your loan amount for a specified period which may be 3 or 5 years, meaning that your loan amount is actually increasing, after the specified period runs out, the interest rate then reverts back to around 8% or whatever the rate is for the product. The theory behind the loan is that after 5 years the growth from the property should have exceeded the amount capitalised. It can be useful if you want to get in to the market but still maintain your cashflow.
Cheers
Matt Centrone
Property Investor and Financial Strategist
[email protected]Thanks Matt for you clarification …hhm, I really don't like that in particular. that would eat up a bit of the equity… No, I think I prefer regular loans with a good rate.
Thanks again
Cheers
ThomasYeah, I agree with you mate. I know a couple of people who have used them, but its not my cup of tea.
All the best
Matt Centrone
Property Investor and Financial Strategist
[email protected]There is another recent post on this product with some feedback and also read this
thanks ..great article. exactly what i needed.
yes you can also go to http://www.cashbackhomeloans.com.au they have the same deal and will pay you for getting your loan as well … pretty good I think …
D
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