All Topics / Finance / 3rd investment prop $ shortfall

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  • Profile photo of neetyneety
    Member
    @neety
    Join Date: 2007
    Post Count: 15
    April 12, 2009 - 5:40 am

    Hi there,

    Any ideas on what to do next.  HI there I put an offer on a 3rd investment property.  Its a small hotel unit on the Gold Coast.  The CBA looked at it with using the other 2 properties as equity etc.  The purchase price is only $159k but after a very lengthy wait from CBA (3 extensions) they said they can only lend $151.  A was also needing about $12k for closing costs, so all up loan of around $171K.  Any ideas on how I can get the extra $20k.?  Bank says I was short by about $6k income.

    The buyer is still very keen to wait and see what I can do next.  I thought of suggesting to him that I rewrite the contract for $139K, use the $12k for closing costs.  And get something written up by solicitor to say I will pay him the balance plus interest
    within the next 6 months.  He says he may do it but will need to think about it.

    In 5 weeks the 1st prop comes off nearly 9% interest so will free up probably about $120pw.Really dont want to miss out on this property,  I have to let solicitor know on Tues what to do or get another xtension.

    Any ideas?

    Neety

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    April 12, 2009 - 6:36 am

    If you are cross collateralising (Not recommended) the securities and using CBA  then you hav every little choice.
     
    Personally I would be having this loan as a standalone loan secured against the property itself and raise the balance of  the purchase price plus costs against the other properties through a line of credit.

    Without knowing all the details it is difficult to give you further advice.

    Richard Taylor | Australia's leading private lender

    Profile photo of neetyneety
    Member
    @neety
    Join Date: 2007
    Post Count: 15
    April 12, 2009 - 7:26 am

    Thanks Richard your very helpful,

    I thought about line of credit but havent done a lot of research on it yet.  The loan is stand alone but secured against other properties.  So would I be wise to go to bank on Tues and ask to reconfigure loan as you've said above.?

    Neety

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    April 12, 2009 - 8:30 am

    If the loan is secured against the other properties then it is still cross collaterilised and that is your problem.

    CBA wont tell you an other option as it is not in their interest to do so and thats why you need to use a separate lender.

    Richard Taylor | Australia's leading private lender

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