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From: Mike .


Property deposits
From: eaglehawk
Date: 21 Oct 2000
Time: 18:30:13

Does anyone have any suggestions about how to buy property without having a deposit? Are there loans available for getting 100% of the required funds? I heard from somewhere (Henry Kaye?) that insurance bonds could do the trick - any information on that? Any help in this area would be greatly appreciated.
 
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Greg H

Reply: 1
From: Mike .


Re: Property deposits
From: Greg H
Date: 22 Oct 2000
Time: 11:35:38

Stick to buying from developers and make them an offer on two properties or more at 10% below the MARKET price. You will be suprised how many will accept your offer if you buy 2 or more.Then find a bank that will lend you 90% of the valuation price (NOT PURCHASE PRICE) they do exist. There you have 10% deposit built in at no cost.

If it is off the plan, with 12 months or so to completion, by the time it has settled it should be worth more (as long as you buy in a proven growth area), and that will easily cover the rest of your costs.

Write a cheque for .25% of the purchase price, with a note stating you want 5% deposit payable by deposit bond or equivalent, within 21 days of exchange (gives you time to get organised). A cheque is very powerful when making an offer, and 5% is cheaper for you to finance.

I have been using henry kayes theory over the last few weeks........ AND IT WORKS! I have done it on a part time basis as well.

I have just done this on 2 Sydney properties and am about to continue with 4 more in another development........and I DON'T USE ANY EQUITY IN MY OWN HOME WHATSOEVER.

All the best.Hope this helps
 
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Curious Onlooker

Reply: 1.1
From: Mike .


Re: Property deposits Greg 22 Oct 2000
From: Curious Onlooker
Date: 27 Oct 2000
Time: 00:14:02

but for the latter financing, within the 21 day period, in your experience what have the financiers been most attentive towards - projected positive cashflow, and/or projected tax benefits, something else?

Curious ...
 
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Greg H

Reply: 1.1.1
From: Mike .


Re: Property deposits Greg 22 Oct 2000
From: Greg H
Date: 01 Nov 2000
Time: 22:07:28

Equity is their main concern, but your weekly cashflow/affordability has to stand up. Any tax benefits obviously support this.
 
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Curious Onlooker

Reply: 1.1.1.1
From: Mike .


Thank you [nt]
From: Curious Onlooker
Date: 02 Nov 2000
Time: 21:44:27
 
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Dave

Reply: 1.1.1.1.1
From: Mike .


Re: Property deposits
From: dave
Date: 23 Oct 2000
Time: 10:30:00

Greg when is the purchase price paid? Is it when the building is completed or is it when you first agree to purchasing it?
 
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TN

Reply: 1.1.1.1.1.1
From: Mike .


90% of valuation price
From: TN
Date: 23 Oct 2000
Time: 15:59:11

Greg,

You mentioned that there are lenders that lend 90% of valuation price and not purchased price, which one in particular? I have tried several banks but they all say the same thing that is they only lend 90% on which ever is lower. Because I am about to revalue my IP to obtain the equity for a new purchase. I've heard of this method before, but when I tried out with the banks it seems I came to a dead end.
 
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Robert

Reply: 1.1.1.1.1.1.1
From: Mike .


Re: 90% of valuation price
From: Robert
Date: 23 Oct 2000
Time: 23:27:34

AMP Banking told me today they lend according to "valuation" rather than purchase price. I'll find this out in the next few weeks as I negotiate on a property.

Robert
 
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Peter.L

Reply: 1.1.1.1.1.1.1.1
From: Mike .


Re: 90% of valuation price
From: PETER.L
Date: 24 Oct 2000
Time: 10:02:41

Robert I am onto something even better. I will tell the forum members once it is all 100%. Give me your email address.
 
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Robert

Reply: 1.1.1.1.1.1.1.1.1
From: Mike .


Re: 90% of valuation price
From: Robert
Date: 24 Oct 2000
Time: 10:15:04

G'day Peter

My email is [email protected]

Looking forward to hearing from you about your idea.

Robert
 
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Rick

Reply: 1.1.1.1.1.1.1.1.1.1
From: Mike .


Re: Property deposits
From: Rick
Date: 21 Oct 2000
Time: 22:47:37

If you have equity in other assets, ie property, shares, etc, you can use that equity as security in borrowing up to 110% of the property value your interested in. I prefer to borrow up to 105/6% of my IP's to cover the transfer & legal costs in the purchasing...This way I'm not dipping into my own pocket to secure and control my long term IP.

Hope this helps you out.
 
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Eddym

Reply: 1.1.1.1.1.1.1.1.1.1.1
From: Mike .


Re: Property deposits
From: eddym
Date: 22 Oct 2000
Time: 09:36:49

I agree with Rick. I use either 1.05 or 1.06 and that is ample. Good luck!
 
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Owen

Reply: 1.1.1.1.1.1.1.1.1.1.1.1
From: Mike .


Re: 105-116% finance
From: Owen
Date: 23 Oct 2000
Time: 10:27:30

Hi Eddym and Rick,

Are you guys buying positive or negative geared IP's with this finance?

I bought my first IP with 106% finance and it is pretty heavily negatively geared. There is no way with that much finance it could be otherwise. I regret that now and my other IP is earning me an income as will all my future ones.

The goal of a nothing down, positive income, self secured IP is an elusive one.

Owen
 
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Rick

Reply: 1.1.1.1.1.1.1.1.1.1.1.1.1
From: Mike .


Re: 105-116% finance
From: Rick
Date: 23 Oct 2000
Time: 11:54:28

Owen, With 106% finance Im buying negative geared IP with +ve cashflow ( sometimes called cashflow neutral )... Basically Im controlling the property while the tenant & tax man pay its way to Capital Growth. There are 3 main points that are crucial to achieving this:

1/ Obtaining or negotiating the properties at a good price,
2/ Obtaining Rental income slightly above others in the area through the little extras the IP contains (ie A/C Alarm etc)
3/ getting all your entitled tax deductions ..To achieve this the use of a Quantity Surveyor is mandatory..

Hope this helps you out..... Rick
 
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Owen

Reply: 1.1.1.1.1.1.1.1.1.1.1.1.1.1
From: Mike .


Re: 105-116% finance
From: Owen
Date: 24 Oct 2000
Time: 09:12:39

Unfortunately I bought in an old building so no depreciation for me. I have been tossing up whether to get a quantity surveyor in to see if anything is left to claim but it's basically unrenovated except for paint and carpet before we bought it. The cost involved in a survey I think would outweigh the savings.

BTW, do you know of a good surveyor in Sydney you could recommend? I've had quotes of $700-$770 + GST for a 1 BR apartment. Bit over the top I think.
 
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Eddym

Reply: 1.1.1.1.1.1.1.1.1.1.1.1.1.1.1
From: Mike .


Re: 105-116% finance
From: eddym
Date: 24 Oct 2000
Time: 18:38:47

hi Owen, email me on [email protected] and I will reply with name and contact details tomorrow. I use a firm that is in both Newcastle (charge 350) and also in Sydney (around 500). they are currently doing one for me that should be ready tomorrow..for my 2nd IP.
 
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TN

Reply: 1.1.1.1.1.1.1.1.1.1.1.1.1.1.1.1
From: Mike .


Re: 105-116% finance
From: TN
Date: 23 Oct 2000
Time: 16:05:30

Rick,

You mentioned that you usually obtained 105-116% finance, can you do with other assets (like shares, etc..) or not? How do you obtain a 105/6% finance without any asset?
 
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DuncanM

Reply: 1.1.1.1.1.1.1.1.1.1.1.1.1.1.1.1.1
From: Mike .


List of NSW Quantity Surveyors..
From: DuncanM
Date: 24 Oct 2000
Time: 09:54:09

I cant recommend one, but here's a list of email addresses, perhaps fire off a request for a quote to the lot and see what you get back.. the list is taken from the web site for the Australian Institute of Quantity Surveyors..

http://www.aiqs.com.au

[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
w&[email protected]
[email protected]



Hope it helps. Duncan.

Residential Property Record Keeping Software.

http://www.otter-software.com.au
 
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