Forums / Getting Technical / Finance / Finding deal vs Finding loans

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  • Profile photo of Quang LuuQuang Luu
    Participant
    @quangluu
    Join Date: 2018
    Post Count: 2

    Hi everyone,

    I’m doing Steve’s Apprentice course.

    One thing I have learned is that you need to get a deal before finding a loan.

    The part I’m not sure is that if we don’t seek a loan then how do we know how much we can borrow and hence find a deal that we can afford.

    I really hope someone could help me with this?

    Thanks heaps!
    Quang

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    You should probably speak to a broker about working out your borrowing capacity before you start looking for deals as if you can’t borrow then you are unlikely to able to buy (without getting creative).

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Quang LuuQuang Luu
    Participant
    @quangluu
    Join Date: 2018
    Post Count: 2

    Thanks for your help Terry!

    Profile photo of George PoullosGeorge Poullos
    Participant
    @york-p
    Join Date: 2015
    Post Count: 10

    You should always know what your capacity to borrow is before doing any deals. You don’t actually need to get a ‘loan’ before finding a deal. But, having a broker look over your financial situation will give you a good indication of what kind of capacity you have which will then allow to seek out opportunities within that capacity.

    George Poullos | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Finance Strategist & JP

    Profile photo of StevenSteven
    Participant
    @steven1982
    Join Date: 2017
    Post Count: 175

    I say you should know your borrowing capacity first, so it helps you to realize what kind of deal you can do. eg: if your borrowing capacity is only 400K, then for most part (there are exceptions), there is no point of looking for deals that would require you to get an 800K loan.

    Once this is sorted out,then always find a good deal first (not just find a deal, but a GOOD ENOUGH deal).

    Then find money. Apart from getting a loan, there are other paths…..JV, angel investors, borrowing from family or friends, etc, etc, etc… once you found a good idea, and the deal is good enough to attract people who are able to potentially give you the lending, then everything becomes negotiable.

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