Hi everyone,
I am new on the forum. Perhaps my question has already been covered.
Looking at a scenario where I have equity but no serviceability or capacity to satisfy the Bank. While a friend has got good
cash-flow to satisfy the Bank but has got no equity or deposit to contribute to the purchase of a property. As the investment property is Cash-flow positive, so no money will be spend out of the friend's pocket. How do we workout property ownership? or split the proceeds from the investment?
If it's cash flow positive why is serviceability as problem? If it's putting money in your pocket every week the bank shouldn't have a problem.
Or is it only positive on paper? And admittedly the banks usually only count 70% of the rent.
You would have to work out what's fair with the other person. If you are putting up the cash and they are contributing only good will, maybe do an unequal split 80/20? You need to take into account your cash contribution and the fact that you are losing interest that you would have if it remained in the bank. BUT the other person needs something. Even if they have part ownership and get the CG but you get the cash each week? Tricky!!
Thanks Catalyst, you have given me some food for thought. Much appreciated!
Have you considered offering a long settlement period? If the property has been on the market for a while im sure they'll be happy to have a longer settlement, you may be able to solely save in time or both save some money for a deposit? Hope this helps
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
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