asset rich, cash poor

[tonyd]

A dilemma faced by a client of a friend...

You inherit a rundown $1.5M home in a prime city suburb with river and city views, and move in. You are retired, with no super and little savings to renovate. You have tried to sell the property but there were no takers at what you consider to be a fair price. The rates invoice will hurt when it arrives.

What would you do?

(Not a lot of information I know.
I'm not sure whether it would be attractive to tenants or not.)

cheers, Tony

 

[Jas]

sell at market.


if there are no takers, they are asking too much.

Jas

 

[geoffw]

I'm not sure whether it would be attractive to tenants or not.)

A pity- in the circumstances, that's probably the most important information of all.

If it's run down as you say, I'd suggest getting a loan agaisnt the value of the property to do it up- and let it out once improved (even better if he can get a loan which capitalises until he can let it out, so that his personal cashflow is not hurt in the short term).

Doing that should even make it a lot more marketable.

 

[Baloo]

You have tried to sell the property but there were no takers at what you consider to be a fair price.

I'd suggest being more realistic about the fair price. If the market won't meet your expectations, then your expectations are too high.

 

[Andrew]

Just don't pay the rates notices. You can pay all the unpaid rates when you do eventually
sell, or your estate can at which point it won't make much difference anymore.

The council isn't going to come along and kick your friend out.

andy

 

[michaelg]

Hi,

Depends on what they want to do with the money?

Do they want to stay there (in its current state) or cash up and live elsewhere?

If cash up - offer vendor finance at high market price, i.e. instead of negotiating on price, negotiate the terms.

If they like they view, offer a life lease with a reverse mortgage to get lifestyle and cashflow.

Need to think about what they want.

Regards
Michael

 

[XBenX]

The council isn't going to come along and kick your friend out.

andy

They can/will and have done it in the past. But as long as the time frame is short it shouldnt occur.

If they just want income why not a reverse mortgage or annuity as MG has suggested.

 

[HHH]

find a partner with the funds to do the reno, and work out a split on the profits of the renovated property.

 

[tonyd]

Thanks for your suggestions guys.

I'll print out this thread and pass on the ideas.

cheers, Tony

 

[geoffw]

How about something a little different.

Maybe a forumite would be willing to inject some capital for some reno, in return for a small percentage of the improived value?

I'll put up my hand

 

[HHH]

hey! good idea.......

 

[D.T.]

Hi,

Annuity would be the best option, I'd say...

-Regards

Dave

 

[qaz]

Hi,

Annuity would be the best option, I'd say...

-Regards

Dave

Yes, cashbond strategy is a good one in that case.

 

[Mr. Fabulous]

Wow, I'm surprised it took so long for someone to suggest using a cashbond! The first thing I thought about when reading this was Steve's story about his pensioner client using a cashbond to not only keep her home but to also buy two IP's. Why even suggest selling it if there is a option for him to look at which will allow him/her to keep it?
tonyd, my suggestion to you is to get your friend to contact Steve via his website at www.navra.com.au, I'm sure that Steve will be able to help with at least a few ideas for them to look at.

 

[geronimo]

Went to Steve's workshop yesterday in Brisbane.

Thoroughy enjoyed the day, thanks Steve, and I can highly recommend it to anyone else thinking of going.

Brendon
-------------------------------------------
Acute Mortgage Reductions
www.acutemr.com.au
[email protected]

 

[Kennethkohsg]

Wow, I'm surprised it took so long for someone to suggest using a cashbond! The first thing I thought about when reading this was Steve's story about his pensioner client using a cashbond to not only keep her home but to also buy two IP's. Why even suggest selling it if there is a option for him to look at which will allow him/her to keep it?
tonyd, my suggestion to you is to get your friend to contact Steve via his website at www.navra.com.au, I'm sure that Steve will be able to help with at least a few ideas for them to look at.

***************************************

Dear TonyD

Mark is right. I've just attended Steve Navra's Seminar yesterday.

Steve is probably able to help your friend to turn his asset into perpetual income streams through the use of cashbond and use them to create more wealth through further property investment. I've no doubt about that after hearing what Steve has spoken yesterday.

Regards,
Kennethkohsg

 

[geoffw]

What would a cashbond give you that a straight equity loan will not?

It's run down, and it sounds as if he does not want to live there- an equity loan for as long as it takes to renovate should achieve what he wants- a sale and some real money to live off.

 

[sbe]

Why the cashbond - because it solves the no income part of the equation......

I'd agree, get a loan using a cashbon strategy, reno and then consider your options.

 

[tonyd]

Hi guys,

Some great ideas based on very little information up front. I got some more details about my friend's client which clarifies the situation a bit.

He is doing some renovations, but will only be able to afford to live in the place for 12 months. And it sounds like the wife would like to continue to stay there too.

cheers, Tony