Borrowing to buy land.

Hello,

I was wondering if someone could help me out.

I am a very small business owner (tradesperson) who in future will be expanding and I thought buying my own small industrial block would be the way to go as I'm in no rush.
As I own no property, am self employed and have a family that is basically dependant on my income, I've read I am practically unloanable (did I just make that word up?), but I guess if I am seen to be worth the risk, I could get the loan for the land .. is this correct?
My question is, if I wanted to spend $100k on a block, could I get it on $50k deposit?
At this stage it would have no buildings etc. on it. Basically just a foot in the market and an expense I wouldn't have to worry about in the future in regards to our business growth.

Can I get a loan? :eek:

Thanks
 
Hi Brooklyn

Sorry dont want appear avasive to your question but there are so many variables and additional information required to enable a sensible answer.

This would include details on the security itself you the borrower and your ability to show that you can service the loan. Your credit history past and present.

Rather than ramble on i think you would better off to talk to a local broker you can give you an indication of whether the deal could be done.

Other consideration would be the loan amount as most lenders who consider industrial land have minimum loan amounts.
 
Hi, and Thanks for that guys.
Yeah I might take your advice and go sit down with a broker. I realise there are alot of variables to cover and it seemed everywhere (on the net) I've looked it changes from one place to the next, just missing out by a particular variable eachtime.
The land I've been looking at is in a high growth area realising strong capital gains for quite a few years so figured that variable may be covered although only studied residential and realise the different zonings are incomparable.
It usually comes down to a servicability issue I guess, so I thought if I met the lender halfway, only I can really lose in the end and they'd take it on.

Just a couple of quick questions in regards to comments.

What is the loan to value 60% ratio? Does this mean I would need 60k or 40k or do other numbers come into effect?

And Qlds007, your comment about lenders who take on these loans ... do normal (subjective I guess) banks such as CBA not take on these types of loans? Not sure I'm too keen on some alleyway deal where my limbs could be in danger. :eek:
 
Promise the lenders i am referring to are a wee bit bigger than the CBA and no back street lender.

If the lender does a 60% LVR on a 100k property you need to find the other 40K.
 
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