I'll try to keep this short, but its a bit complicated…
We (as a couple) are looking to buy a rural property, 100 acres, no improvements, WA.
Purchase price $550K.
55% of the property is under lease (blue gums) returning a measly $5K pa.We intend to use almost all of the remaining land to set a horticultural business, and ideally would like to be able to lease 40% of the land to the business (or company, but thats a whole other financing question). Zoning is appropriate for intended use. Unsure of lease value for remainder of property, but for the purpose of the exercise assume a further $5K pa.
Within a 2 year time frame plan to build, and occupy a basic house on the property (in the remaining 5% of area) Owner build a possibility as both of us in civils/construction industry and feel it is well within our skills! All materials, site works, subcontracts etc QS'd at well under $100K.
I currently have an IP, loan amount $190K, estimate value at $460K.
Tenanted at $475 pw (fully furnished) – nets $18,800 pa after strata/rates/agent fees.We currently pay $200 pw rent in a shared house.
Have a further $90K in savings, but would like to put this toward the infrastructure/building budget blowouts/improvements on the property down the track and not tie it up in deposits in any way.
My income: $100K
Partners income: $80KNo debts other than IP loan.
Any ideas on how the hell to structure something like this?
Including $100K for building, in 12 months time.Thanks muchly in advance,
Jo
Jo
What is the property zoning and where is it located in WA.
The use, size and 101 other issues will scare most lenders off especially in the current climate but not necessarilty ut of the question.
Richard Taylor | Australia's leading private lender
Hi Jo
The only way you have any hope of doing this deal is going directly to the NAB rural section, if you really have your heart set on doing what you say here, then they are possibly your only hope that will look at you.
They will want to use the equity in the IP toake over the loan and cross the two properties to keep the land loan down under the 60% LVR or lower.
with a 100 acres tell the bank you are going to use it as a hobby farm and dont mention anything to with owner builder,and you will have a chance at getting it throughI know this because I have some friends who have just completed doing just this and this the way they told me they had to do it,
Hope this helps
Cheers
Sorry i disagree i think there are a few other lenders who would look at the deal with the right information.
Richard Taylor | Australia's leading private lender
Fine in that case I will leave it in your very capable hands and hope you can help him out
Cheers
All in hands thanks.
Richard Taylor | Australia's leading private lender
Thanks all,
It is zoned intensive agriculture.
(it is actually advertised as balance rural with every agent, but I called the shire to check the zoning, and they told me it is intensive agriculture…recently changed from balance rural)It is in the Donnybrook Balingup shire – orchard/hobby farm country.
By the way current IP loan is with CBA. Had previously looked into a simliar property, slightly larger but with a house, at $750K, broker put in a call to CBA, who approved in principal, and they had no problem with just treating that as a homeloan. (Partner was not wroking at the time so that idea got put on hold)
Not sure how everything changes when theres no house though, it can hardly be a homeloan!?
It is so hard to find information on rural loans too I find.
We are that keen on it that if it was required we would sell the IP, but would really like to avoid doing that.
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