FlowerMember@flowerJoin Date: 2013Post Count: 2
I have a company and did not trade for long time and I am self employed. I want to start running the business again and want to buy properties and receive rent for the main source of business income. As I am self employed and I know that it is not easy to get finance and the business did not run for many years. What I think is I want to buy a property and paid it off by cash then I can use the title of the property to apply for loan. It is feasible?wilko1Participant@wilko1Join Date: 2010Post Count: 510
If you are buying the property outright in cash. Why do you need a loan?
If you have been self employed for 2 years there should be no problem getting a loan.
some banks will also accept 1 year self employedFlowerMember@flowerJoin Date: 2013Post Count: 2
I want to buy more properties and need more money for doing so. just like Steve’s book said that for just putting 10% deposit to keep buying property.Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,018
Flower sorry but i have to say i believe you are doing it the wrong way round.
You would be better off using your cash reserves up your sleeve and try and gear on each new IP.
Without knowing all of the details it is difficult to comment as to what documents you would need in order to obtain a finance approval but limited documents are still around in variety of models.
Yours in Financekong71286Participant@kong71286Join Date: 2009Post Count: 261
It depends on what property you are looking at buying.
Residential properties usually require you to be able to service the loan, and thus will place more emphasis on your income and expenses. Some things to note:
- If the entity you are purchasing it is not making sufficient income, you may be able to go as guarantor
- Some lenders will consider rent as income, but only to a certain extent E.g. 80%
- Buying a property outright and then refinancing it to buy other properties will incur financing costs and reduce cashflow, and will not necessarily increase your chances of having a loan approved in comparison to having cash as deposit
With commercial properties, more emphasis is placed on the the income and expenses of the property itself, rather than the individual purchasing it, but in general you need a much higher deposit i.e. 20-30% and interest rates can be higher
- If you had $300,000 in Cash, you could use this as a 20% deposit to buy a $1.5m apartment complex, provided it had good cashflow, and you had the supporting financial documents