250k Cash + Pre approved for 670k loan what to do

[sanj]

lol Thanks all for the replies.

Ive actually made an offer on a property for 890k with a definite sale of 920k with guaranteed rental return of 6000per month for atleast 12 months and it is seeming like a never ending lease.

For me thats my number 1 mission at the moment. If this falls through my hands ill start considering other options however my loan pre approval runs out on saturday so I told them it all needs to happen quickly.

if so ill be borrowing 720k @ 7.25 fixed which is about 4900 a month repayment and I can pay an extra 4100 a month off the principal so around 9k a month can repay

it sounds like it would be a regional deal (900k property rented for 1500/wk) so pls confirm with the bank that your pre-approval would cover this region etc and at what LVR.

i hope it works out for you but i cant help but be a bit nervous. rushed property purchases, especially a first one, can be dangerous if you dont know exactly what you're looking for.

just my opinion of course and there are certainly more experienced investors on this forum who might agree/disagree (just a disclaimer to avoid some of the petty arguments that have been taking place recently on SS)

 

[celsioraus]

The property in question is on the northern beaches of Sydney. I have agreed to a price of 920k and am renegotiating my loan approval for an extra 50k. The house has a 4 bedroom, 3 bedroom and studio all separated
The ongoing bit is because a sports organization is currently renting it for their people to live and have been ongoing for years however if after the lease expires in nov 2011 I believe I could still get the same amount considering it'll be 2012 and rents should rise.

Is there anything else I'm missing? Isn't this a great rental return ?

 

[alexlee]

Would a block of 3 like that be considered standard resi or commercial?

 

[Wunderbar]

When something is too good to be true...

 

[sanj]

The property in question is on the northern beaches of Sydney. I have agreed to a price of 920k and am renegotiating my loan approval for an extra 50k. The house has a 4 bedroom, 3 bedroom and studio all separated
The ongoing bit is because a sports organization is currently renting it for their people to live and have been ongoing for years however if after the lease expires in nov 2011 I believe I could still get the same amount considering it'll be 2012 and rents should rise.

Is there anything else I'm missing? Isn't this a great rental return ?

would you be allowed to rent it to different groups of people if the current tenant moves out? i have no idea re the rules in sydney.

 

[Indifference]

The property in question is on the northern beaches of Sydney. I have agreed to a price of 920k and am renegotiating my loan approval for an extra 50k. The house has a 4 bedroom, 3 bedroom and studio all separated
The ongoing bit is because a sports organization is currently renting it for their people to live and have been ongoing for years however if after the lease expires in nov 2011 I believe I could still get the same amount considering it'll be 2012 and rents should rise.

Is there anything else I'm missing? Isn't this a great rental return ?

At that price, yes the yield is good for resi. I don't know the area, but it looks like a very decent property if you are comfortable with the debt level & have done your DD. Great view...

 

[celsioraus]

It's actually a 7 bedroom house but it looks like it has been built as 2 apartments. From what I know the 4 and 3 bed are council approved but the granny flat is not although it is leased out through a real estate. I hope it all goes well. It has to for atleast 18 months!

 

[alexlee]

It's actually a 7 bedroom house but it looks like it has been built as 2 apartments. From what I know the 4 and 3 bed are council approved but the granny flat is not although it is leased out through a real estate. I hope it all goes well. It has to for atleast 18 months!

The fact that the granny flat is not approved does not worry you?

What if they don't renew the lease? How much could you rent it out for?

How does a 7 bedroom house 'look like' it's been built as 2 apartments? Is there anything else that's not council approved?

 

[celsioraus]

The granny flat is separate to the house do it does not concern me. The house is set up as an upper / lower duplex ATM.

 

[murph14]

The granny flat is separate to the house do it does not concern me. The house is set up as an upper / lower duplex ATM.

See this thread for what you might face:
http://www.somersoft.com/forums/showthread.php?t=60734

 

[jaycee]

Because dad is "pressuring" the original poster, not "suggesting" or "advising." Huge difference. Who pressures a third party to chose a particular investment? If the OP had said "financial planner" rather than "dad," everyone would be saying to run a mile!

Sounds like you know the people better than I do or you can udnerstand a hell of a lot more than I can from a forum post about people.

I did not realise the person was being pressured by his dad.

All I read was his dad was making a suggestion (which maybe he has experience in, cause I don't remember reading that he has not) and suggesting it's a good suggestion, and the son is unsure and wants to qualify it by epxloring further options and increasing his udnerstanding.

Why write somerone off , especially your father & then take for gospel what a bunch of anonymous posters on a fourm ?

 

[celsioraus]

Well i dont know how this side tracked into family matters lol but what I was saying about the granny flat not approved is ok because I would just live there myself and rent the main house out so there is no reason to need to have it approved.

The main house is legal and generates enough cf to pay off the mortgage.

 

[alexlee]

Well i dont know how this side tracked into family matters lol but what I was saying about the granny flat not approved is ok because I would just live there myself and rent the main house out so there is no reason to need to have it approved.

The main house is legal and generates enough cf to pay off the mortgage.

You're aware that the council can force the demolition of an unapproved dwelling?

 

[celsioraus]

I will check into it and perhaps ensure it is run through coincil before moving forward

 

[sanj]

havent you already put in an offer? how will you check this before moving forward if your offer is accepted?

 

[Jacque]

Hi again Celsi

Please ensure your solicitor reviews the contract on your behalf and you check with town planning at the local council re: building approvals for this property BEFORE you sign anything or hand over your 0.25% I get the feeling from your initial posts that you're rushing here, and buying real estate (especially for a first timer) shouldn't be rushed. It's a very significant financial commitment. Best of luck.

 

[celsioraus]

I have an offer accepted yes however as there is no cooling off, I will be doing my checks and inspections done prior and hopefully it hasnt sold by the time im done.

I did view this property a month ago however it was looking like it would exceed 1m which was out of my range however now its down to an acceptable price I want to go ahead with it.

Tomorrow I plan to find out about council approvals also will check with my solicitor when he calls

 

[sanj]

I have an offer accepted yes however as there is no cooling off, I will be doing my checks and inspections done prior and hopefully it hasnt sold by the time im done.

I did view this property a month ago however it was looking like it would exceed 1m which was out of my range however now its down to an acceptable price I want to go ahead with it.

Tomorrow I plan to find out about council approvals also will check with my solicitor when he calls

im a bit confused here, you say your offer has been accepted but then you say hopefully it hasnt sold by the time youre done with your inspections. which one is it? alternatively, what is your offer subject to?

 

[deejay]

Sounds like you know the people better than I do or you can udnerstand a hell of a lot more than I can from a forum post about people.

I did not realise the person was being pressured by his dad.

All I read was his dad was making a suggestion (which maybe he has experience in, cause I don't remember reading that he has not) and suggesting it's a good suggestion, and the son is unsure and wants to qualify it by epxloring further options and increasing his udnerstanding.

Why write somerone off , especially your father & then take for gospel what a bunch of anonymous posters on a fourm ?

I'm not sure what you consider to be such a stretch here. The chain of discussion went:

ianvestor:
Why are you feeling pressure?...Who has 'trained' you to want an 850k house, and how are they doing financially?

censioraus:
My dad is pressuring me to buy a house for 800k...

Pretty clear chain of discussion here. Someone asks the OP why they feel pressured, OP says dad is pressuring him/her to buy a specific house.

Really not interested in rehashing this. I worked off the OP's quote, not interpretation as you've repeatedly implied. End of story.

 

[cadence]

hey cels, $900k doesnt get you much in the north these days in terms of a stand-alone house. given all the potentially separable accommodations and the granny flat, the yield is decent and is currently tenanted to a relatively reliable organisation, it sounds like a great investment to me.