Looking for a bit of advice or what my options are at the moment.
I have a block of land that is yet to sell, I currently owe about $132k, it is listed for $165k, agent expects it to sell for that or about $160k (yes I know this is somewhat speculative).
I have about $4000 in the bank.
I am going to Toowoomba to look at property on Friday, also a house has come up for auction there on the 22nd of June which I think could be a steal.
I desperately want to break into the market at the moment, I made a dud move buying the block and want to get a hold of a reno project.
Borrowing power is not a problem but the properties I am looking at range from $200k-$250k ish.
My question: Since I only have a possible $4000 at the moment as a deposit do I have any options for purchasing if I find the ideal property in the next week?
I had banked on my land selling by now which would have given me $20k plus in capital to invest but it now seems I have hit a hurdle.
Can anyone suggest a solution to my dilemma or some creative financing I am yet to hear of? Or am I simply a bit unlucky and just have to wait until this block sells?
Contributing Factors: Currently live in Muswellbrook, fairly sure I don't qualify for FHOG
Any advice/strategies would be appreciated, thank you.
Hi Matt
I am assuming the property will be an IP not a PPOR so given this your lvr will be limited.
Whilst 95% + LMI is doable in Toowoomba (according to QBE, Gemworth won't touch it) you are reliant on the valuation in regards to comparison sales etc etc.
Either way the balance of deposit, stamp duty and acqusition costs will come to a lot more than $4K.
A secured credit card to 20K is also an option and as long as you can show 5% genuine savings / equity then that facility is possible however your timing wont be good given end of financial year end and an Auction in less than a fortnight. Even with 20K credit card you are going to be short when it comes to acqusition costs.
A blended loan is a possibility however the second mortgagee may not want to take your land as collateral.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Toowoomba seems to be a popular area – I have a few clients buying 95% lends there (and Rockville) with similar strategies.
Your biggest problem here is the deposit and the fact that its not genuine savings. The only thing I can think if is a delayed settlement on the new purchase so you have enough time to come up with the deposit.
TheFinanceShop | Elite Property Finance
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You may be able to go into the purchase with another party. It will be virtually impossible with just $4k deposit.
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
I reckon this is one of those situations were being patient pays off. I think it's more prudent to be patient then to be enthusiastic about the next deal.
Wait until your land is at least unconditional under contract. You can know how much you'll be getting back and what you can afford. Don't want to put your 4k down as a deposit and then have your sale for your land fall over, which you were relying on finance for the next deal.
wilko1 wrote:I reckon this is one of those situations were being patient pays off. I think it's more prudent to be patient then to be enthusiastic about the next deal.Wait until your land is at least unconditional under contract. You can know how much you'll be getting back and what you can afford. Don't want to put your 4k down as a deposit and then have your sale for your land fall over, which you were relying on finance for the next deal.
I think that's a prudent approach – and it's not like this will be the last opportunity that will ever pop up.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
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Thanks for the advice guys it has been appreciated. I have a few properties to look at on Friday and I will still go through with doing so. I won't be sourcing any creative lending in the meantime though I will just let nature run it's course regarding my land and see what happens from there.
Once again this forum has proved very helpful to me.
Selling land at the moment is tough (in most places). You should run the numbers on building on your block. The final product will appeal to more, and you can rent it out if need be….assuming there is at least some demand for property where your land is.
Building isn't really an option. In the last 6 months things have changed heaps in Muswellbrook and for what I would spend building I could be negative gearing possibly a couple hundred a week. The vacancy rates have sky rocketed too so getting it rented out is a long shot. Definitely need to sell.
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