Hi all,
Does anyone know of a lender that will consider a block of 6 units on the one title and lend at residential rates?
Most of the big banks consider this a commercial transaction and offer inflated rates. The units are in metro South Australia.
Could you also advise what the max LVR is and rate?Thanks heaps
Wont get more than 75-80% lvr and will depend on a couple of things.
Yes it may be done at resi rates if everything else stacks up.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Richard,
I know it can be done, but who will do it? Everyone i am talking to is talking commercial rates. Bankwest will do a very reasonable commercial rate, however all other lenders are offering over 8%.
Should be down to around Standard variable rate circa 7.5%.
I am doing a block of 9 units on the 1 Title here in Brisbane and the indicative rate on a resi deal is 7.6%.
Client has a few properties and good serviceability hence the rate.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
ttcb75 wrote:Thanks Richard,I know it can be done, but who will do it? Everyone i am talking to is talking commercial rates. Bankwest will do a very reasonable commercial rate, however all other lenders are offering over 8%.
For a deal this “unique ” ( well according to the big 4 banks anyway) -i would suggest you speak to Richard if you want a resi rate + a deal that works for you …
Even if we named the lender;
1. You will not have access the senior credit managers who approves these deal- but instead you will get someone from a call center who have never ever heard of a block of units lol
2. The bank knows you have no idea what to expect + have no past dealing with them…so they can charge you more if they want….and you would still think it’s a good deal compared to a commercial loan.
3. The person taking over your file may not deal with block of units on a regular basis –Just one note: valuation on these properties are normally the biggest issue and can take up to 2 weeks in some instance.
+ MAX LVR is 80%Give Richard a call and you won’t need to worry or look back.
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Thanks guys, I am still trying to negotiate a deal, so I will keep you posted.
What are the chances of reasonable rates on a block of 8 one bedder townhouses/villas in a rural location? I see some potential to convert to two bedders down the track?
Scott No Mates wrote:What are the chances of reasonable rates on a block of 8 one bedder townhouses/villas in a rural location? I see some potential to convert to two bedders down the track?1 bed + Rural….expect to be commercial….
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
I have a site good for 5×2 bed units, plans are drawn up for 1 x duplex and 1 triplex has in the design would it be easier to go for two separate loans or keep it as a single loan? Would this work as they are on the one title, Its also in a rural area.
Hi Wade
If it is a 5 x 2 and you are constructing them that is different.
Most lenders will treat that as a Comm deal.
You wont have the option of going for 2 loans as you have single Title.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I am considering developing 5 units on a single title. All are three bedders with 2 car garages in a suburban location. I have been advised that big 4 banks will only consider 3 or 3+ unit development as commercial and consider rates at approx 11%.
This does not seem reasonable to me as the property will be secured anyway.This is also my first project and we have little assets to back it up so technically I would be relying on a very detailed and thorough forecast with independent valutions to support this forecast of likely profitability. What are your thoughts on this? What method do you guys think I should consider.
We have a block of 7 units with ANZ on a residential rate (currently 6.36%). Got it by switching all our properties and loans from Westpac who wouldn’t budge but the normal rule is anything of 4 or more will be classed as commercial whether it’s residential or not. Try using the power of negotiation if you have other investments or home loans and don’t forget to negotiate the rate discount. We get 1% at this stage.
I’d be very careful with Bankwest as I know of a development that went bad after Bankwest called in the loan for no good reason and have sent the developers to the wall. Latest word is they are not alone and a class action has begun with a Senate Enquiry about to happen over what they have been doing!!! These people are well known to us and the deal was not only sound but not far off completion with a profit of substance.
AALLII wrote:I am considering developing 5 units on a single title. All are three bedders with 2 car garages in a suburban location. I have been advised that big 4 banks will only consider 3 or 3+ unit development as commercial and consider rates at approx 11%.
This does not seem reasonable to me as the property will be secured anyway.This is also my first project and we have little assets to back it up so technically I would be relying on a very detailed and thorough forecast with independent valutions to support this forecast of likely profitability. What are your thoughts on this? What method do you guys think I should consider.
Dont know about the 11% part…
Bu buying a block of 5 and BUILDING a block of 5 are considered as 2 kettle of fish! and are priced accordingly. But def not 11% with the big 4 unless you have a very weak proposition ie unstable income, first investment etc…
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Hi InvestorMick
Are you willing to share what LVR you have for ANZ to be getting residential? We have 8 on separate strata titles with ANZ and they are at commercial – bundled in with several other properties. They are currently doing our review and I'm thinking I need to be reviewing them as well.
Cheers,
TraceyTracey,
They give us 70% on the block of units and 80% on all of our other properties. We deal with a Business Banker in Business Banking and she’s great. Threats to walk are always helpful I find!!!
mick can you tell me more about bank west i’m currently thinking about bringing a few properties across to them for a better rate.
Hi Tito
What sorts of properties are you looking at refinancing?
Bank West are competitive when it comes to multi unit blocks unless residential security is offered.
Resi product is ok but they are a pain to deal with credit wise.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
single resi and some commercial units i was cornerned about them calling in any future loans i have on developments as you described earlier
This is very helpful
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