2 of my properties for sale

Hi The Analyst
The deposit was paid to secure the block. On the day of paying the deposit we were issued with the contract which stated that we had 28 days to obtain finance approval from the bank. The finance was approved, however we then had to wait for the Land Titles to be issued, which turned out to be 8 months. (May 2008)
However, due to the market change in that time, we decided to pull out before the titles were issued and before the contract became binding.

Regards PC
I suggest you talk to a legal person. There is a government agency which give 20minute consultation for $20. I still think you could get your money back.
 
Hi The Analyst
The deposit was paid to secure the block. On the day of paying the deposit we were issued with the contract which stated that we had 28 days to obtain finance approval from the bank. The finance was approved, however we then had to wait for the Land Titles to be issued, which turned out to be 8 months. (May 2008)
However, due to the market change in that time, we decided to pull out before the titles were issued and before the contract became binding.

Regards PC
That sounds like an option rather than a deposit ?

I purchased a property in that way and also backed out.
 
re Sparky's valuation, my house in yanchep was bank valued at $600k last november, however i couldn't sell it and i took $499k in January. A bank val doesn't translate into sales, which can be good and bad.

PC - what price was the block? did the block+house not equal a profit?

even selling mine at $499k i cleared well over $100k, probably about $140k. not too bad for slapping a bopg standard 4 x 2 on a block
 
re Sparky's valuation, my house in yanchep was bank valued at $600k last november, however i couldn't sell it and i took $499k in January. A bank val doesn't translate into sales, which can be good and bad.

PC - what price was the block? did the block+house not equal a profit?

even selling mine at $499k i cleared well over $100k, probably about $140k. not too bad for slapping a bopg standard 4 x 2 on a block
Ausprop

The block was $217000 + fees (Cottage block)
 
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Well that's a relief because I have 1 still on the market, 2 more coming on soon, with up to another 4 later in the year.....

Cheers,

The Y-man
Hi Y-man

It might be a good idea to get those other properties out there sooner rather than later according to this article so that you don't get caught out aswell!


Cool buyers dash hopes of rebound

Date: May 4, 2008

Of the 795 properties up for auction, just 60% were sold, making yesterday the worst Saturday to sell a house in Melbourne since mid-2005.

Last weekend the clearance rate was 68% and a year ago it was 84%.

Real Estate Institute of Victoria chief executive Enzo Raimondo said the market was "more balanced" this year than in 2007.

Although vendors were not enjoying the same runaway prices, the market had moved to a more sustainable position.

Successive interest rate rises by both the Reserve Bank and banks acting independently, along with sharemarket volatility and the rising cost of living, have all contributed to the dip in consumer interest.

Recent REIV statistics show median values across Melbourne dropped for the first quarter of the year, which also adversely affected the market and gave buyers little reason to bid up property prices.
 
re Sparky's valuation, my house in yanchep was bank valued at $600k last november, however i couldn't sell it and i took $499k in January. A bank val doesn't translate into sales, which can be good and bad.

PC - what price was the block? did the block+house not equal a profit?

even selling mine at $499k i cleared well over $100k, probably about $140k. not too bad for slapping a bopg standard 4 x 2 on a block
Ausprop,
You said your property was BANK valued $600k. I guess you must have refinanced, otherwise, you would not have wasted money to do so. If you borrowed at 90% - You could have $540k in your pocket (of course loan as well). As you said you could not sell at $499k (maybe $480K). Why do not you try not pay the bankpayment and let the bank to have it. You still have extra $40k in your porcket.
 
Do the words 'full recourse' mean anything to you, Analyst? You're seriously suggesting borrowing on a high valuation and then deliberately defaulting? Given that the bank will tack on all the fees in a foreclosure, probably sell the place at a crap price, and THEN go after the borrower for everything else they have to satisfy the loan?
Alex
 
Do the words 'full recourse' mean anything to you, Analyst? You're seriously suggesting borrowing on a high valuation and then deliberately defaulting? Given that the bank will tack on all the fees in a foreclosure, probably sell the place at a crap price, and THEN go after the borrower for everything else they have to satisfy the loan?
Alex
Well, you could have used Company as an borrowing entity. You could have your trust on it. You could have your wife as the full ownership on your assets.
 
Well, you could have used Company as an borrowing entity. You could have your trust on it. You could have your wife as the full ownership on your assets.
I see. So basically borrow to the max from the bank, stash the proceeds, and when the market turns against you deliberately default, making sure you don't have any other assets for the banks to seize.

And I thought I had no morals.
Alex
 
I see. So basically borrow to the max from the bank, stash the proceeds, and when the market turns against you deliberately default, making sure you don't have any other assets for the banks to seize.

And I thought I had no morals.
Alex
Alexlee,
1. Firstly, I do not believe those BANK vlauations as per said in this thread. Banks are not stupid! For a new house, bank's valuation is LAND + Construction Cost. They will not give you extra 10-20% profit into it.

2. I do not know it is moral or immoral. Trust and Pty Ltd are set up for the purpose of limiting personal liablities.
 
Analyst I can assure you you're wrong, the NAB lent me 80% of $600k as a refi when it only cost me about $350k to build. as for defaulting, are you nuts? bank finance is my greatest tool. apart from which, the loan was fractioanlly less than 100% of my sales price.. all I achieved was clearing repayment obligations
 
Hi Analyst

It really doesn't matter whether you believe bank valuations or not! The fact is that we are all very dependent on those valuations when we come to re-finance and take out equity to help us to move forward without having to sell, in most instances the bank valuations are conservative at the time they are made. Or do you mean that you think Ausprop is also making up his bank valuation when you say you don't believe the valuations?

Also Ausprop did sell at $499,000 so I don't understand why you think he didn't sell?

Just wondering whether analysing is all you do or whether you actually have any investment properties?
 
Well, you could have used Company as an borrowing entity. You could have your trust on it. You could have your wife as the full ownership on your assets.
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Dear TheAnalyst,

1. Whether you use the Company Structure or a Trust Structure, as its respective Director/Trustee, you can also be sued for the loss by the lending bank.

2. Personally, I will not agree to your suggestion to ask a spouse to take full ownership and then subsequently allowed her to be sued for the loss by the lending bank, is not "un-ethical" and "un-professional" as a property investor.

3. What exactly are you "suggesting" in your a/m posts or/and hoping to achieve, please? Please clarify and elaborate further where neccessary.

4. Thank you.

Cheers,
Kenneth KOH
 
Alexlee,
1. Firstly, I do not believe those BANK vlauations as per said in this thread. Banks are not stupid! For a new house, bank's valuation is LAND + Construction Cost. They will not give you extra 10-20% profit into it.
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Dear TheAnalyst,

1. As far as the construction loan is concerned, I agree with you that the bank valuation is likely to come up as the land price + full construction costs.

2. However, when the house under construction is subsequently completed with all the required house finishings, the bank valuations for such a newly completed house, will normally come out a lot more higher than the basic land price + full house construction costs.

3. Based my own past house development projects' actual experience, the basic land+ house construction costs for one of house constructed = A$206,000, back then in April 2003;- however when the house was subsequently completed in December 2003, its new bank valuation value has managed to come up to A$305,000 subsequently.

4. Perhaps, I can agree with you that the bank valuation for the new completed houses in Perth may not come up as high in today's prevailing negative market sentiments atmosphere and at this stage of the Declining Market Property Cycle Stage at this point in time, as compared to what it has previously been, in my own experience as illustrated above, however, I still believe that it is still a lot higher than its basic land price + house construction costs, provided that the house development was "financially feasible" in the first place. or/and the present Perth housing market has not "crashed" down suddenly.

5. Consequently, I agree more with Ausprop's feedback, than what your views here.

6. For your further comments and discussion, please.

7. Thank you

Cheers,
Kenneth KOH
 
2. I do not know it is moral or immoral. Trust and Pty Ltd are set up for the purpose of limiting personal liablities.
Thats why banks ask for personal guarantees from the directors for loans to Trust and Pty Ltd entities. Even when the big boys borrow theres intercompany & parent guarantees, x-collaterised loans, the whole lot thrown in so their security is water tight. Limited liability when it comes to unsecured creditors but the banks will have you sewn up every time. Retail property lending is very sound. Risk management and credit books are in the best shape for decades amongst the big banks. Its the lending to corporates that the banks can't seem to get right.
 
Analyst I can assure you you're wrong, the NAB lent me 80% of $600k as a refi when it only cost me about $350k to build. as for defaulting, are you nuts? bank finance is my greatest tool. apart from which, the loan was fractioanlly less than 100% of my sales price.. all I achieved was clearing repayment obligations

It was you who said you could not sell at $499k. I was advising a way out because you could not get out. Everyone know what you talk about $350. You bought the land at cheap price. I said bank valuation was purely based on land + construction. When you finish, they would use the land pirce at the finish time. They will not simply add 10-15% profit -- as simple as that.
 
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Dear TheAnalyst,

1. Whether you use the Company Structure or a Trust Structure, as its respective Director/Trustee, you can also be sued for the loss by the lending bank.

2. Personally, I will not agree to your suggestion to ask a spouse to take full ownership and then subsequently allowed her to be sued for the loss by the lending bank, is not "un-ethical" and "un-professional" as a property investor.

3. What exactly are you "suggesting" in your a/m posts or/and hoping to achieve, please? Please clarify and elaborate further where neccessary.

4. Thank you.

Cheers,
Kenneth KOH
Kenneth,

You misunderstood my message. I tried to talk about the asset protection which has been said in a lot of books. It was my mistake on Ausporp's post. He sold his property. I thought he did not.
 
hey Sparky seems to be a whole bunch of properties sold in Yanchep over the last week. your property is now stuck onthe last page of re.com... i reckon get your agent to make it a feature property and push this... buyers are around. I jsut spoke to a good mate who is an agent and their office is selling a property a day with a notiiceable pick up since last weekend.
 
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