Hi Guy’s,
I am wanting to buy,renovate and sell some residential properties with the view to making some additional income. I did this quite successfully a few years ago and would typically have them back on the market within 60 days. At the moment I have about $500,000 cash on hand but my serviceability is almost non-existant due to a failed business venture. I have a good credit rating with no defaults or judgements and was wondering if you could point me in the direction of either a private money lender of other lender who is not to worried about the serviceability as the loan would only be short term with a low lvr.
Looking forward to your replies.
Hi Charlie
Nodoc loans on a non coded basis are certainly alive and well and whilst even on first mortgage the rates are not cheap (I own and run a private lending business so can talk with some element of authority lol) we have a number of clients who come back repeatedly.
For longer term deals most traditional lenders are going to require some form income evidence whether it be from BAS / Accountants Declaration or Business Bank statements.
Let us know if you need any further information.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
The problem you will face is the legal requirement for a lender to make sure any loan to you is not unsuitable. This means they have to consider your ability to repay the loan without undue hardship. Therefore low doc loans are not so low any more. However if you will be purchasing using a company, whether in its own right or as trustee, then this legislation will not apply and it will be easier to get finance. However don’t use a company for this reason only as there are many legal and tax aspects to consider.
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
Hi Richard,
Can you give me a rough indication of the rates I could expect to pay and the required lvr? as well as the term?
Hi Terry,
I would be looking to purchase using a company, what would the requirements be to qualify and what lvr could you do? Also what rate of interest could I expect?
Depending on the security location and lvr starting at 1% per month + 1% -2% application fee.
Newly formed companies are fine.
Maximum 65% – 70% lvr.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
@qlds007 would be interested in learning more about your private lending options Richard. Have sent you a PM and an email.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Hi Terry,
I would be looking to purchase using a company, what would the requirements be to qualify and what lvr could you do? Also what rate of interest could I expect?Consider the structure of the company when setting up – parties such as who should be the director and shareholders how the constitution should be structured and also tax considerations, land tax, depreciation and franking credits etc.
Once the company is set up it can apply for the loan with the director(s) giving personal guarantees. Same LVRs, rates etc as persons with most banks.
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
Hi Charlie,
With $500k cash and low serviceability, going through private lenders with a no doc or low doc business loan makes sense for short-term property flips. As Richard mentioned, expect rates around 1% per month plus fees, and LVRs usually max out around 65–70%.
Using a company structure can help bypass some serviceability hurdles, but definitely consider the legal and tax side before setting that up—Terry’s advice there is spot on.
The key is having a solid exit plan since these loans can be costly if you hold beyond the term. If your 60-day turnaround is consistent, this could be a good fit.
Definitely shop around and talk to lenders who specialize in asset-based short-term loans to get the best deal.
Good luck with your next project!
Knotegroup | Knote Group
https://www.knote.com.au/For short-term reno-and-flip projects, you might consider short-term private or bridging lenders; many prioritise equity/LVR over serviceability.
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