Guys I’m going to start doing small renno’s to increase my cashflow but I do find decent buys here and there for positive or neutral property that I would like to buy. If I purchase IP that’s positive I can service the loan and do my renno’s on the side but will the banks see it that way? I don’t want to reduce my borrowing cap for flipping and a development project mid next year.
StefanJpcashflowParticipant@jpcashflowJoin Date: 2007Post Count: 575
It all depends on a few factors and by the way good question.
Setting up your portfolio to meet your goals is essential.
Have you talked to your broker yet about what you want to achieve?Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069
There’s two ways to look at this.
If you’re a PAYG employee they will want to see that your income from salary/rent can support the loan.
If you’re self employed, they will want to see a couple of years financials and rent.
If you don’t qualify for mainstream lending than you might have to investigate other avenues.
ATM my broker is sorting out my loans. I have just over 200k equity in my home and 20k cash. I’ll have 420k for IP to flip with 40k for renno at 80% finance. 20k cash is back up. I am a PAYG employee and earn about 110k. Wife about 41k part time.
Hopefully after a few flips I’ll have sufficient cash flow to go into a joint venture mid next year.
Before I question my broker to see her skill set, do you guys think I can purchase an IP to hold that’s neutral or positive without affecting my borrowing for the first flip?
Thanks Jamie. So if my rent covers the mortgage on that IP then it wont affect my finance for flipping. Is that right?
StefanRichard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,018
It will depend on the lender.
Some lenders will service the external borrowings at the actual rate / repayment whilst others will calculate it using a sensitised rate.
Your Broker will be able to advise you.
Yours in Finance