I am a new migrant who has recently moved to Melbourne with no employment and credit history in my new beloved country Australia. I must admit at the outset that I am struggling to secure a job because I get told that I lack the local experience (yet I have 17 years with global professional experience in Telecommunication and BSC in Engineering and Executive MBA and I am still in my early 40's).
After 8 weeks of job hunting or rather call it job haunting and having sleepless nights on how to return back to the path of wealth creation & accumulation that I exited when I migrated and left behind a high-paid job, I started to think property. Property investment is of course a solid building block for wealth creation and accumulation. However, my high-spirited idea took a major blow when I was told by my bank that I must have an employment beyond the 3-months probation period before they would consider financing my property investment acquisition.
Back to my question to the forum: Given my above situation, how can I overcome my two immediate obstacles:
– Banks do not consider financing my property if I am not employed. I must also clarify that I have $80,000 cash on hand available for immediate property investment.
– I do not have credit history as I am now to the country. For some reasons, no one wants to know about my credit history in my country of origin in the global connected economy.
I am eager to hear your thoughts, ideas,… This is my real life case study.
Thanks in advance.
djac
Hi djac
Why not look for an I.P in Ararat Stawell or Hasham Victoria,for around 70<80,000 pay cash, find a P.M and start banking the weekly rental. Save the rental income and any saving from your job and you can use the I.P and your savings to finance your next purchase.
Start small with what you have and grow over time…
Good luckFinancing is now so complex and varied in this country (thanks to banking industry deregulation!) that I wouldn't talk directly to a bank for anything other than the most straightforward of situations (and I wouldn't do it even then). Unfortunately there are very few knowledgable staff in branches anymore; the branches are really just processing centres. You need a mortgage broker, and preferably one accustomed to financing challenging deals. I'm not sure, but there may be low or no doc mortgage products that would be suitable for your circumstances.
If that doesn't work out, and you have some equity, you may look at doing a joint venture with somebody local. For example, if you have $50K in the bank, team up with somebody who can borrow $450K but has no deposit, and go halves in a $500K property – you put in the $50K and pay expenses on $200K of the mortgage, they look after $250K of the mortgage.
Hi Trakka,
Teaming up is definitely is an option that I will be exploring… My personal challenge with this option is that I am new and I do not have friends or family to team up with. As for teaming up with other investors & property owners, I'd rather take over existing repayement with the original loan remaining with the current owner/investor , in other words, I need to explore low doc opportunities. Any ideas on how I can go about digging for these low doc opportunities.
Is it acceptable in Australia to place in an ad in the local newspaper soliciting for such opportunities? Any help with the wording will be appreciated.
Regards
Hi Nucopia,
Excuse my ignorance, but I do not understand the jargon. What do you mean by I.P. and P.M?
Regards
djac wrote:I'd rather take over existing repayement with the original loan remaining with the current owner/investorI'm suspecting you're from the USA; unfortunately this kind of arrangement isn't possible in Australia. Actually, not in exactly the way that it's done in the USA, but you may be able to buy via a wrap or lease option.
djac wrote:I need to explore low doc opportunities. Any ideas on how I can go about digging for these low doc opportunities.Make an appointment with, or email, a good mortgage broker. I'd seek one via the means I PM'd you about. Just to clarify, "low doc" refers to a type of loan product that would be in your name, not just to all opportunities that don't require much documentation. As mentioned, buying via a wrap or lease option could be a good option for you.
djac wrote:Is it acceptable in Australia to place in an ad in the local newspaper soliciting for such opportunities? Any help with the wording will be appreciated.I'd post on the forums I told you about, saying you want to buy via a wrap or lease option – there's bound to be some forum member who's wanting to provide a wrap or lease option who may be able to help you.
djac wrote:What do you mean by I.P. and P.M?IP = investment property
PM = property managerGreat source for these and other terms: http://www.somersoft.com/forums/showthread.php?t=9382
Just out of interest DJac,
what made you decide to leave a high-paid job in your own Country and want to emigrate to Aus without some work already lined up?
As for the investing scenario, you can do No Doc and Lo Doc loans that will require very minimal financial history to help with the investing process, but you really should speak to one of our MB's on this forum about some possible scenarios.
Failing that, you have a good cash deposit sitting there; it may be wise to stick that into a high-interest online Bank account such as BankWest or ING, until such time as you get some employment and get a work and finance history of at least 6 months.
Hi LA Aussie,
South Africa is not a safe place where you can bring up your children. When applying for jobs back from my country of birth, I was told that I must be in Australia for any prospective employer to seriously consider my application. These 2 factors led me to resign without securing a new employment. Now that I am here, I get told that I do not have local experience and hence my inability to secure employment within the past 8 weeks. It is not all doom. I am still collecting the rental incomes from 4 international properties through my property managers in 2 different countries. But as I said in my opening script, the local banks are not interested in my overseas credit history.
In your answer, you refered to me to BM's. Who is that? What does it stand for? Where can I contact them?
As for the worst scenario, it is defintely high on my agenda to buy properties as soon as I have an employment. But my thinking is that I have some time now while I am still looking to be econonmically active, so why not to use to buy Property Investments.
Regards
djac
MB = mortgage broker
And welcome to Australia
Hi, been there, done that.
Share with you what I did. I plonked all my money down on a house, ran out of money & borrowed from a private lender. 2% more than the banks charged but it's fixed. The risk is the balloon repayment. LVR lower than normal. About 60%.
I was totally confident I could walk back into a high paying job, and did.
MOST IMPORTANTLY, the target property MUST be worth the pain. Please bear in mind that in Australia, we are already in the 10th year of increasing property prices. Are you sure that what you buy will continue going up?
some properties will show good appreciation still so I'm not suggesting that you don't invest just be aware that property can be flat for long periods & transaction costs & yields are low.
Good luck,
KYHi Kum Yin lau
Thanks for sharing your first PI case and thanks for the caveat.
Some clarification questions:
1. I assume that you borrowed from the private lender against the property to the amount of 60% LVR at higher interest rate . Did you borrow Before finding the job or After?
If Before, why could not you finance the property directly with the private lender in the first place?
If After, why did not you approach the main stream banks for lower rate?
2. With hindsight to this deal, what will you differently?
3. Is your private lender 'really' private or open for public financing/borrowing with higher charges? Which one do you recommend?
Regards
djacThanks Trakka for the welcome. Australia is a great country and it is a priviledge to be here.
djacFrom What I understand. To get a low doc loan you must have an ABN (Australian Business Number) For at least 1 year. Oh when you go for the loan you must sign a income declaration. The Tax man is watching low doc's very closely an if you say you've been earning this much on your declaration they will be checking if you have paid tax on that amount. Ok that' s me for now. cya
Thanks phana007, as you might have gathered that I have so many basic questions. Can you list name of companies/brokers that finance low doc loans in Melbourne?
djac just do a http://www.google.com.au with Australia ticked and put – low doc loans or no doc loans into the search box and you will find the information you seek.
djac
How about working for your self to create an income and then going down the nodoc/low doc loan avenue in the future?
Hi – I realise I am resurrecting this thread from a while ago – but if you have not yet found a job consider moving to Perth. We are screaming out for engineers of all disciplines/levels!
Why don't you perhaps look for a sales job. Most pay commission only so, I guess, they usually are willing to give someone a go. If you can find a position somewhere where you can get good strong training, it might lead to something. Many sales jobs don't mind if you are not experience because this means that you haven't picked up any bad habits. There are even sales jobs in the telecommunications industry, from time to time, which is where your experience lies. If you can secure a sales job and start earning some money, things may not seem so grim down the track. Also, you can then get some "local knowledge". Hang in there. I have met with many South Africans who despaired because it was so hard to get work but eventually they did secure work. You will too.
Good luck and welcome!
Jacqueline
You may have to lower the standard of the type of job you are looking for as I have a degree and am the same age and now work in a newsagents part time just to get a job history of some sort for my next employer in the future. I am also learning how to drive a truck at the moment so I can increase my chances of getting a driving job. Basically I have given up on getting a high paid job in Australia with my degree and will make the money from investing instead over the long term.
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