I have a newly formed SMSF and want to borrow to purchase a commercial property at approx 40%LVR. ( Value $350k, already have $200k deposit)
Commonwealth bank wants me to pay $3300 to see their financial advisor before I can even apply for their super product, called SuperGear. I don't mind paying good money for good advice but not when I already know what I want.
What should I do? Has anyone had experience buying commercial property with super?
Any recommendations on who to borrow with?Most major banks will go up to 70% LVR for SMSFs. Expect highish fees though.
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
Hi House Call,
NAB appear to be the most popular as a lot of the others, especially for enquiries made via 'branch land' put it in the too hard basket. I understand St'George also are OK. Bear in mind whoever you go with it is a lot more involved than buying a house – or in fact any property as an individual. You will indeed need to allow anything between $2500 and $3500 depending on what you have set up to date. Not sure if you are aware, but it involves legal fees, establishing another trust (usually called a security trust or bare trust) tripartite agreement paperwork, and you will need a corporate trustee for the bare trust, meaning you will need to establish a Pty LTd company as well. So you can appreciate there are a few costs. However I suspect the CBA line is code for 'not sure we know what we're doing and the financial planner is busy so we hope this will put you off'……..seems to work for them the majority of the time!!!!!
All the best with your purchase though. I'm sure some of the other guys/girls will have some suggestions too. 60% shoudl be fine, so with the LVR you are proposing as long as the rental income and current (not proposed or speculative) super contributions cover the repayments etc it should be a walk in the park.Cheers
House Call wrote:I have a newly formed SMSF and want to borrow to purchase a commercial property at approx 40%LVR. ( Value $350k, already have $200k deposit)Commonwealth bank wants me to pay $3300 to see their financial advisor before I can even apply for their super product, called SuperGear. I don't mind paying good money for good advice but not when I already know what I want.
What should I do? Has anyone had experience buying commercial property with super?
Any recommendations on who to borrow with?Up to 60% LVR with a commercial lender in the SMSF field is not an issue– however most banks with commercial SMSF will need you to see a financial planner before they will approve your loan, no matter how low your LVR is.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Shape wrote:Up to 60% LVR with a commercial lender in the SMSF field is not an issue– however most banks with commercial SMSF will need you to see a financial planner before they will approve your loan, no matter how low your LVR is. Regards MichaelWhy do they want me to see a financial planner? That is the part I object to when my proposal is very simple.
Actually I am happy to jump through whatever hoops the bank wants me to in order to secure a loan, just not happy to be forced to pay $3300 to see the planner when I already have a plan and therefore do not feel seeing a planner has any point to it.
It is probably because they will require you to get financial advice. But this wouldn't be independant financial advice if it is with a CBA planner.
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
Hate to say if it is a newly formed SMSF a lot of lenders will walk away.
We never use CBA for our SMSF loans as their costs and requirements are way out of the market.
Most lenders will require a Financial Planner to sign off that the Investment strategy is understood however you are looking at
$150- $200. Where we are not acting for the client to arrange the loan we charge $150 for the Certificate.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Hate to say if it is a newly formed SMSF a lot of lenders will walk away.We never use CBA for our SMSF loans as their costs and requirements are way out of the market.
Most lenders will require a Financial Planner to sign off that the Investment strategy is understood however you are looking at
$150- $200. Where we are not acting for the client to arrange the loan we charge $150 for the Certificate.Cheers
Yours in Finance
OK so that's a much more reasonable fee to pay. Who would you recommend re the loan, or would you be prepared for me to PM you in regards to this and assist me through your broking business? I can give some more details if so.
Hi HC
Yes feel free to shoot me an email.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
The CBA won't insist on you using their planner, so may be worth your while shopping around to find a cheaper adviser if all you are after is a sign off for the loan to go ahead.
Steve79 wrote:The CBA won't insist on you using their planner, so may be worth your while shopping around to find a cheaper adviser if all you are after is a sign off for the loan to go ahead.The happy sequelae to all this is that I have tweaked things a bit and can do what I was planning to without needing any bank.(or planner) Thanks for your input
House Call,
Great you have found a solution.
If you ever need SMSF funding, one of the leaders that I've turned to for my articles (and most of the media has as well) is i-financial. Ugly website, but a good knowledge source at http://www.ifinancialgroup.com.au.
All the best,
Michael
Hi House Call,
Pretty common product nowadays with most banks and lenders getting a part of it. Best to look around as they are definately out there at that LVR.
AM
Hi House Call,
Great you found a solution – look at others like NAB and Perpetual as these companies will do it 0- still with costs and fees but not with another plan fee.
Regards,
Tim Brosnan
Ridge Accountants & Advisors Pty Ltd
E: [email protected]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
