Create $100k from $11k to build Granny Flat

[maadha]

Hi all, just running a refinancing scenario (Well a theoretical one anyway) and looking for some input\critique on the theories.

It follows on from this post here: http://www.somersoft.com/forums/showthread.php?t=73811

1. 
   Purchase price = $447'000 (3 months ago)
   Current LVR = 91.5% (LMI capitalised)
   
   
2. Renovations\Repair
   Paint: $1k
   Carpet: $950
   Blinds: $950
   Laundry to 2nd Bath\Laundry: 4k
   Kitchen: 3k
   Front fence repair: 1k
   Side fence repair: 1k
   Total: $11'900
   
   
3. Revaluation (6 months after purchase)
   Look to get re-valued at Purchase price + (Reno cost *2)$447'000 + ($11'900 *2)
   ∴reval = $470′ 800
   LVR after reval ≈ 86.8%
   
   
4. Renovation Loan (approx. 7 to 8 months after purchase)
   Start value = $470'800
   Build cost = $100k
   Note: Look for finance option that will allow us to use the estimated value on completion of the renovation @ 90%LVR
   
   Target End value = $570'800
   Maximum LVR 90%: ($570'800/10) *9 = $513'720
   Amount available to borrow: $513'720 - $409'000 (original loan)
   ∴ Funds available to finance Granny Flat
   $104'720

The main questions I have are:
Is this roughly how things are calculated and;
Do these renovation loans that take into end value even exist with an LVR of 90%.

Also, what are your opinions on the rush from first home owners getting in before the stamp duty concession is changed. Will it increase the value of existing properties in that FHOG price range?

Thanks

 

[Rolf Latham]

Hiya

One thing may be the on completion value and 90 % lvr

Not many lenders will do that for you on reno or add on build loans

ta
rolf