Hey, forum folks.
Matt here, son of Les. Long time reader, first time poster... B-)
Advice sought from experienced investors and lateral thinkers alike.
OK, the good news. A property within a stones throw of the CBD, on the market at less than current market value by a motivated vendor - in fact $125K less than what the they originally paid for it.
With more bedrooms than you can poke a stick at, no kitchen and truly out-dated amenities, it has a lot of potential that only a creative mind can see and requires a significant input of TLC. Hence, why it sat for months without an offer… B-)
But, the primary intention for the investment was for it to be a cash cow (a pessimistic $1200/wk in rental yields - a likely $1600/wk), to off-set our other negatively geared, capital growth investments, by offering student accommodation in a market that’s got too many students and not enough places - decent or otherwise - to house them (more than 5 years experience in providing accommodation to students BTW).
Now, the challenge! Despite my bank (NAB) giving many indications (pre-application weeks and even months prior - had been looking a many properties) that this positively geared purchase would be a shoe-in, less than a week before going unconditional (on finance) they’ve come back and told us that they cant do it - unless we go commercial loan (requiring 30% deposit, PLUS other property as security AND a higher rate of interest - I can live with the third one… but the first two, well...).
So, I’m looking for another lender. My two possible sticking points are;
Alternatively, we've got it a great price and there are so many options (some without switching lender)... We can;
But time is of the essence. So any ideas, feedback on alternative lenders, legal loopholes (to avoid going commercial), alternative ideas on what to do with the property or proposals from potential 'partners' are welcome.
I’m out the door to hit-up other brokers and banks. And to explore every possible alternative. I look forward to reading your thoughts - thanks for your time. You’re welcome to call if you like…
Regards,
Matt B-)
0411 505 001
0431 587 958
P.S. If you already have existing property (or looking at getting one) and you would like to significantly improve your rental yield - by renting (fully-furnished) to o/seas students, I'm happy to help... But give me a week or so to work through this current challenge first...
Matt here, son of Les. Long time reader, first time poster... B-)
Advice sought from experienced investors and lateral thinkers alike.
OK, the good news. A property within a stones throw of the CBD, on the market at less than current market value by a motivated vendor - in fact $125K less than what the they originally paid for it.
With more bedrooms than you can poke a stick at, no kitchen and truly out-dated amenities, it has a lot of potential that only a creative mind can see and requires a significant input of TLC. Hence, why it sat for months without an offer… B-)
But, the primary intention for the investment was for it to be a cash cow (a pessimistic $1200/wk in rental yields - a likely $1600/wk), to off-set our other negatively geared, capital growth investments, by offering student accommodation in a market that’s got too many students and not enough places - decent or otherwise - to house them (more than 5 years experience in providing accommodation to students BTW).
Now, the challenge! Despite my bank (NAB) giving many indications (pre-application weeks and even months prior - had been looking a many properties) that this positively geared purchase would be a shoe-in, less than a week before going unconditional (on finance) they’ve come back and told us that they cant do it - unless we go commercial loan (requiring 30% deposit, PLUS other property as security AND a higher rate of interest - I can live with the third one… but the first two, well...).
So, I’m looking for another lender. My two possible sticking points are;
- The property will be held by a Hybrid Trust.
- The property is a 'Multi-Unit' dwelling and has previously operated as a boarding house and can again operate as boarding house - or student accommodation (which is different under Qld and BBC law) - NAB now sees this as 'commercial'... in fact, it even has DA for additional rooms...
Alternatively, we've got it a great price and there are so many options (some without switching lender)... We can;
- renovate and convert back to spacious, 5bdrm, 3bthrm, standard house and make an easy $100K (sell or re-finance), or
- on sell the potential to someone else, with a tidy little mark-up for our efforts to date, or
- go commercial under better terms (different lender) and/or with an investment partner.
- try vendor finance in order to go commercial... etc
But time is of the essence. So any ideas, feedback on alternative lenders, legal loopholes (to avoid going commercial), alternative ideas on what to do with the property or proposals from potential 'partners' are welcome.
I’m out the door to hit-up other brokers and banks. And to explore every possible alternative. I look forward to reading your thoughts - thanks for your time. You’re welcome to call if you like…
Regards,
Matt B-)
0411 505 001
0431 587 958
P.S. If you already have existing property (or looking at getting one) and you would like to significantly improve your rental yield - by renting (fully-furnished) to o/seas students, I'm happy to help... But give me a week or so to work through this current challenge first...
