All Topics / Finance / Creative lending/advice for my situation

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of Matt39Matt39
    Member
    @matt39
    Join Date: 2012
    Post Count: 42

    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.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    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 | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    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
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    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 Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of wilko1wilko1
    Participant
    @wilko1
    Join Date: 2010
    Post Count: 510

    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. 

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    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
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Matt39Matt39
    Member
    @matt39
    Join Date: 2012
    Post Count: 42

    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.

    Profile photo of wobblysquarewobblysquare
    Participant
    @wobblysquare
    Join Date: 2010
    Post Count: 95

    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.

    Profile photo of Matt39Matt39
    Member
    @matt39
    Join Date: 2012
    Post Count: 42

    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. 

Viewing 9 posts - 1 through 9 (of 9 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.