First post. I have learnt so much from this forum (thanks) but have heaps of questions. I am not new to property, have 1 comm (retail) and a few resi IPs. Looking at another comm and am trying to figure out what is the best way to fund it. The comm I have is owned outright but I know the banks like to use resi as security for comm purchases. Am I better off setting up finance on the existing comm to cover approx 30% + buying costs and borrow 70% on the new comm so they are stand alone or given the current climate borrow the lot on the new purchase and X it with my existing comm. My plan is to run it over 10 years P&I
Best way to leverage Commercial?
- Thread starter Papps
- Start date
Hiya P
Welcome
Subject to the usual caveats, it should to be too hard for you to be able to buy another place using the equity in the existing
ta
rolf
Welcome
Subject to the usual caveats, it should to be too hard for you to be able to buy another place using the equity in the existing
ta
rolf
Welcome Pappas,
It seems you have an unencumbered commercial property and a few residential properties.
What I would do is get a LOC on the existing commercial property and use that to fund the purchase of the new commercial property you want to buy.
I would make them two separate loans so that you don't have to get any of your properties cross securitised - the bane of many a property investor. Banks don't really care about resi or commercial security (your 'personal' banker might tell you different!), they just like to X-Cross as many securities as they can, so if you default they have many options. Go for separate loans.
Let me know if you want me to get you some commercial loan info (LVRs, etc) and loan structuring. Just PM me.
It seems you have an unencumbered commercial property and a few residential properties.
What I would do is get a LOC on the existing commercial property and use that to fund the purchase of the new commercial property you want to buy.
I would make them two separate loans so that you don't have to get any of your properties cross securitised - the bane of many a property investor. Banks don't really care about resi or commercial security (your 'personal' banker might tell you different!), they just like to X-Cross as many securities as they can, so if you default they have many options. Go for separate loans.
Let me know if you want me to get you some commercial loan info (LVRs, etc) and loan structuring. Just PM me.
If you had the equity in ur resi props wouldnt you use that before comms for the better IR/conditions?
Yep, LVR - 60% invest portfolio, 32% with PPOR. My strategy is to use comm for cashflow hence want to run this this sep from the resi. Income from the comm prop's will pay down all borrowings over 10 years, thereby providing passive income. Whilst I appreciate doing this attracts a higher IR it is easier to use the unencumbered comm to support the new comm than to use it to support resi in the future. The resi side is in strong growth areas with lower yield and I will continue to add to this as well with the resi equity and when ready sell down to get rid of all debt (more passive income) then think about slowing down a touch.
hi Papps
have a read or search sitloti and you can do it both ways.
in this market look at comm and use the income into resi
you can do it either ways and try not to use the same lender if possible
because even thou they are not the same loan they are in the same basket and the wolf(the bank) will try to eat what in his basket even if not crossed
and yes he can because if he goes for one you auto default on the others so that the way he bites you.
so try to keep you loans in different banks baskets bit hard to nick one from another lender.
have a read or search sitloti and you can do it both ways.
in this market look at comm and use the income into resi
you can do it either ways and try not to use the same lender if possible
because even thou they are not the same loan they are in the same basket and the wolf(the bank) will try to eat what in his basket even if not crossed
and yes he can because if he goes for one you auto default on the others so that the way he bites you.
so try to keep you loans in different banks baskets bit hard to nick one from another lender.
hi GR
Had a look for sitloti, not sure what it relates to. Thanks for the ideas. I have been using the comm to help fund resi but feel the climate in becoming strong for comm so want to strenghten that side but will need to use the equity in the unencumbered comm to do it.
Could one of the MB's let me know which one of the big 4 have good comm lending product, currently with CBA
Appreciate the help
Had a look for sitloti, not sure what it relates to. Thanks for the ideas. I have been using the comm to help fund resi but feel the climate in becoming strong for comm so want to strenghten that side but will need to use the equity in the unencumbered comm to do it.
Could one of the MB's let me know which one of the big 4 have good comm lending product, currently with CBA
Appreciate the help
hi frdsmth9
not sure what gold and silver have to do with buying comm unless you are buying the gold giving to a vendor refinancing and taking back the gold and yes that works need alot of gold thou.
you buy gold and silver to answer that question with a skr or safe keeping receipt
to answer the post
yes it is a good time to buy comm but you have to very picky
all the banks and even alot of the second teirs will use the equity from another property.
and no it does not have to be unencumbent it can have loans on it they can just use the available equity
they do like to tie together but don't have to
and I would not be asking a MB I would be asking a comm MB they are very different and you can get a MB that takes you for the ride and no breaks.if you know what I mean
not sure what gold and silver have to do with buying comm unless you are buying the gold giving to a vendor refinancing and taking back the gold and yes that works need alot of gold thou.
you buy gold and silver to answer that question with a skr or safe keeping receipt
to answer the post
yes it is a good time to buy comm but you have to very picky
all the banks and even alot of the second teirs will use the equity from another property.
and no it does not have to be unencumbent it can have loans on it they can just use the available equity
they do like to tie together but don't have to
and I would not be asking a MB I would be asking a comm MB they are very different and you can get a MB that takes you for the ride and no breaks.if you know what I mean
