My business partner and i want to buy a block of 6 units under a discressionay trust with a corporate trustee, we then plan to sell off 4-5 of the units and own the 1-2 remaining ones close enough to outright.
We need to borrow around 950,000, we have no equity.
I have 40k Deposit, income 75k pa
He has 42k Deposit, income 40k paRent will provide 55k pa.
Servicability doesnt look like a problem however the bank we were using must put as through as buinsess banking customers as there are more than 4 units (company policy).
Can anybody suggest a lender that would loan us the money?
We would also like to borrow money to renovate the units prior to selling, however this can be sourced elsewhere if needed.
Hi Ben
Think you main problem will be the LVR.
Anything over 4 units on the 1 Title is considered as a Commercial deal and therefore cannot be mortgage insured.
This then limits the LVR to 80% or below.
If the 6 units are already strata titled then this is a different matter and certainly there are ways around it.
Other than see if the Vendor will leave some funds in to the deal for say 12 months your only alternative will be to consider private funding which will be more expensive.
Richard Taylor | Australia's leading private lender
ANZ may be able to lend for 6 units on a residential basis, but probably the LVR would not be high enough to assist
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
The 6 units are alraedy strata titled, so what options would I have there?
There is definatly money in this deal an I dont want to miss it due to not be able to secure finance on it.
If they are already strata titled then this would a lot easier.
Why not just finance 3 with one lender and 3 with another.
Would be a fairly straight forward deal.
Richard Taylor | Australia's leading private lender
Good idea richard.
Still need to find lenders who would be happy to take a loan with low deposit. Any suggestions?
You would have to use lenders with separate mortgage insurers. Serviceability may be tight – do you need to purchase all of them in the same entity?
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
Dont have to purcahse all in the same entity, we could do it any way possible however there is the added cost of setting up a new entity. What did you have in mind?
Do you have someone else who could help out by being the director of the new entity? ie someone to help on serviceability?
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
Nobody comes to mind Terry.
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