Unable to get finance, any ideas?

Hi everyone,

i have been a vivid reader for a few months now and id like to say I love this forum.

I would like some advice on my current situation which is not all that crash hot at all (which i am trying to do the best in a bad situation)
I was interesting to get into the property market, a possible buy, rennovate the kitchen/yard type approach or buy in 2011 and hold type approach as I believe it MAY be a good time to buy, eg buy at 10-20% below market (btw im in melbourne)

CONS
Have a paid credit default of $2500
Currently have a $8800 unpaid Melb Uni default on my credit record that I am disputing through the courts,
no assets whatsoever (no home)
no job due to the recent selling of my 2 business (and probably wont get one for the next 12 months)

PROS
not much
$550k cash
$100k shares
no loans, no personal debts, credit cards (but with no balance)
$6k car, no finance
have parents equity and their modest serviceability to help me out if finance is an issue
im fairly young 26
im single, no kids, no wife, no expensive hobbies

I understand that the Cons out weigh the Pros but would like any ideas/pointers in the right direction

Sidenote: i am prepared to be flamed (seriously)

Where did you get the cash?

buy soemthing with less than 50% of your capital, reno and see how you go.
If it works, repeat. If it dont, move in, or rent it and hold for a while.

You wont be getting a loan anytime soon by the way. the credit defaults are enough, but not having an income makes it impossible with the new NCCP laws.

Hi CaptainObvious,

Welcome!

Do you have any skills/trades that you can offer to someone who may have the capital to start a project but not necessarily the time?

Can you pool your resources with other investors?

Can you pay off the credit cards now?


Best of luck

How much more than $550k are you thinking of purchasing something for?
Not too many 26 year olds have $550k cash (from your business sales I take it) at hand, don't be too sad.

Gools

500k cash eh?

You could just pay cash for the house obviously. Otherwise I'd be login on to Commsec and waiting til you get that job before looking at property.

$550K cash! man you are loaded! at 6% thats $33K pa in interest. then add rental income. surely banks will lend on that alone.

There are still a few NoDoc lenders that will lend 50% to 70% with minimal supporting info e.g. no financials, BAS, unpaid defaults OK etc.

Not that I recommend it but they are still around. You need to borrow in a company name as loans to companies are not regulated under the NCCP.

The Sniffer said:

Not that I recommend it but they are still around. You need to borrow in a company name as loans to companies are not regulated under the NCCP.

Click to expand...

And this is how we are likely to do all future investing because of those new rules ...

I wouldn't lend you money,why would anyone else,

Look at all the people who win the lotto and have nothing in 12 months,

They end up owing $550K,I know people like you,(Personally)

Someone dies in the family,you sell their house and you get a win,you stop work(If you were even working before),spend big,go down hard,waiting for the other aunt to die.

You my friend are destined to have nothing,try getting a job,

Painter WTF? That's preet poor man

What were the businesses in? What skills do you have? plenty of developments you can do with that kind of money.

tobe said:

buy soemthing with less than 50% of your capital, reno and see how you go.
If it works, repeat. If it dont, move in, or rent it and hold for a while.

You wont be getting a loan anytime soon by the way. the credit defaults are enough, but not having an income makes it impossible with the new NCCP laws.

Click to expand...

fair enough......yes thats a strategy that might be applicable for me!

mary&mat said:

Hi CaptainObvious,

Welcome!

Do you have any skills/trades that you can offer to someone who may have the capital to start a project but not necessarily the time?

Can you pool your resources with other investors?

Can you pay off the credit cards now?


Best of luck

Click to expand...

Thank you, much appreciated

yes, I am fairly handy, have painted a few houses for friends, have a girlfriend who has rennovated before, hell she apparently put a 2nd story on a single floor building before I met her!

credit cards are all paid off as well!!

Gools said:

How much more than $550k are you thinking of purchasing something for?
Not too many 26 year olds have $550k cash (from your business sales I take it) at hand, don't be too sad.

Gools

Click to expand...

well, obviously id want to minimise my risk so I guess $350k per property would be a good start, instead of paying $500k, since entry level ones seem safer, however, entry level ones seem to be outside of the blue chip suburbs, so more risk I guess especailly in terms of rental vacancy

The Sniffer said:

There are still a few NoDoc lenders that will lend 50% to 70% with minimal supporting info e.g. no financials, BAS, unpaid defaults OK etc.

Not that I recommend it but they are still around. You need to borrow in a company name as loans to companies are not regulated under the NCCP.

Click to expand...

never knew this technique, borrowing under a company ,sounds very very interesting, however, ill have to research much more now that I am equipped with this knowledge

Pa1nter said:

I wouldn't lend you money,why would anyone else,

Look at all the people who win the lotto and have nothing in 12 months,

They end up owing $550K,I know people like you,(Personally)

Someone dies in the family,you sell their house and you get a win,you stop work(If you were even working before),spend big,go down hard,waiting for the other aunt to die.

You my friend are destined to have nothing,try getting a job,

Click to expand...

do I detect a hint of jealousy???

Ive worked more hours in the last 12 months then you have in the last 2 years of your life, so I didn't get it from inheritance, it was from hard work and risks taken, and it has paid off.

Im taking 12 months off while I work out what my next move is, for a well deserved break

Belu said:

What were the businesses in? What skills do you have? plenty of developments you can do with that kind of money.

Click to expand...

the 1st one was a small recruitment business, that I basically sold for nothing, I actually had to give it away, and the 2nd was a cafe

skills, I have basic handman skills and a girlfriend who is very handy and is currently rennovating her own home which includes, installing a new kitchen, painting, changing carpets, changing the windows etc. etc.

bene313 said:

500k cash eh?

You could just pay cash for the house obviously. Otherwise I'd be login on to Commsec and waiting til you get that job before looking at property.

Click to expand...

By commsec , im assuming you are suggesting to buy shares?? or put into a term deposit?

P.S thanks for your feedback everyone, its greatly appreciated

If you can't get finance and you don't want to drop a large portion or majority of the cash as a deposit, yes, I'd be buying blue chip shares and collecting the fully franked dividends in the meantime.

The Sniffer said:

There are still a few NoDoc lenders that will lend 50% to 70% with minimal supporting info e.g. no financials, BAS, unpaid defaults OK etc.

Not that I recommend it but they are still around. You need to borrow in a company name as loans to companies are not regulated under the NCCP.

Click to expand...

yes............but before folks make assumptions

what rate and fees would u like to carry

These arent in the 7s,

ta
rolf

Rolf Latham said:

yes............but before folks make assumptions

what rate and fees would u like to carry

These arent in the 7s,

ta
rolf

Click to expand...

thanks rolf,

yes I assumed there was a catch

say I bought a $350k property or a $400k property

do these companies have offset accounts, so maybe I can park 100% of the price in offset essentially not paying any interest? but I can withdraw when I need to?

primarily these funds are provided by private investors or syndicates

They take an assessed risk for an expected rtn and in general dont like early repayments..................

Having said that, you may find someone that will do what u need

ta
rolf

fair enough, thanks rolf,

I was trying to compare it to a credit card in my situation, whereas you can essentially use the banks (or in this case private groups) money to borrow

but don't pay any interest. I didn't think they would like that very much but wondered if it was actually possible

eg, I fully pay off my credit card every month without fail so the interest rate , even if it was 800% wouldn't bother me in the slightest!

Rolf Latham said:

primarily these funds are provided by private investors or syndicates

They take an assessed risk for an expected rtn and in general dont like early repayments..................

Having said that, you may find someone that will do what u need

ta
rolf

Click to expand...

Gday rolf

How do I find this type of lender , I've had to pass up many a deal that mobs like this could have gotten through for me ?

I did find one but his rates were around 20% which there was room in the deal for that later but in the meantime it just made the repayments unmanageable.
Something a bit lower though would be workable .

Cheers

use a broker that can find private money deals.

ta
rolf