does my bank manager hate me?

T

tdk22

I'm wondering if anyone here can shed some light on this one.

I had an offer accepted on a block of flats on friday. Price $90.

I have 20% and expenses in cash.

I call the loan manager at the NAB and make an appointment.

He calls me back today to tell me that the NAB have changed their policies and now they are only lending 30% on all investment property loans.

Does anybody know if this is true??

Secondly, This purchase will be made in a compnay name, the company (which this guy has looked after and knows it;s situation) is:


Assets(all real estate):
 
oops...

assets: $470K
liabilities: $278K

equity $192K

80% lend against equity $153K

AMOUNT I NEED TO COMPLET PURCHASE: $72k

I figure I have moer than enough equity to cover a 100% lend.

Is this guy being for real, or is he just trying to make my life difficult.

I did have a minor altication with him several months ago and he miscalcuated the estimated purchase costs on another place I brought, which ment I ha to come up with $6000 in a metter of 48 hours, which I was not to happy with, and let him know about.

Any feedback would be appreciated...
 
tdk

Policy , schmolicy

Well, it's news to me.

I had a lengthy session with Homeside yesterday, and they are still lending strongly on investment properties.

It's more to the point - how many flats and how many security titles?

What type of title - freehold, or company share

Are you buying the whole lot

Can they be subdivided

etc

The main stumbling block could be the type of security

Tsk Tsk there, there

I'm sure the nice bank manager person doesn't hate you

Love & kisses

Kristine
 
Hi Kristine

It is a block of Four units on one title.

I would be purchasing freehold.

Should be OK to subdivide to four in the future, I'm buying for rental returns, (min of $65 per flat per week = $260 per week rent.)

If they turn out OK, I would keep them, If they trn out to be nightmares, I's subdivide as I would get $50K each for them, maybe $45 if the market downturns.

The fac that they are on one title is a bonus for me as there is only one lot of rates, water and insurance, so I'm not to fussed about subdividing yet.

Anyway, do you think he was right in saying they only do 70% lends now?
 
tdk

These flats would not necessarily come under general lending guidelines. Some lenders would view these as 'commercial' and thus limit the LVR to 65% or even 60%

Each lender views multiple tenements with a different eye. Some won't even do duplex, let alone four-plex (for want of a better description).

Also, I would take a guess that at four tenements / one title for $90,000 they are in a 'sparsely populated area', that is a town of fewer than 10,000 population.

This will reduce the LVR further.

I wouldn't be too sure about the rates. The municipality has most probably levied a rate for each tenement, and the water supply company also, even if the flats are not separately metred for water.

Ditto subdividing the building and common property. Fire ratings, access, minimum sizes etc would need to be taken into account.

It is wise to not assume lending LVR from any lender until the actual property which is being offered for security has been found and assessed.

However, I am sure that any of the happy brokers who contribute to the Forum would be pleased to find you a detailed quote for the purchase of this property. You know who we are and we're not leaving town!!

Cheers

Kristine















.
 
tdk,

I think Kristine's right - sounds like they've defined it as a commercial loan.

Talk to a good broker - stop dealing with banks!

Banks are NOT your friends.

Cheers,

Aceyducey
 
Thanks Kristine for your help.

The town has a population of around 35,000 people.

It's sound, as I have invested there before.

The council is very helpful (probably because they are small still) and I doubt I would have subdividing problems.

I've already checked out the council and water rates, and I think they are pretty low.

So, know of any decent brokers??

I live in South East Melbourne
 
Hiya

Sounds like a shoe in for ST George

80 % LVR, up to 4 units one title at standard resi rates is pretty normal.

NAB will often do these at 80 % lr, we have had as many as 7 get through at 80 %

Ta

rolf
 
I've had the same- though it's not because NAB had a problem (it was a normal residential lend for them) but because the LMI people treated it as commercial, and would not let it in over 70%.

I did get the deal though, and without the expected LMI charges- through some x-coll.
 
Hi,

Some of NAB's bankers are absolute idiots.

We came across a total idiot when applying for loans about 20 months ago. After being badly treated we thru a big turn and threatened to take our business elsewhere. Only then did we finally get a good personal banker and get the result we wanted. But we did already have signifcant borrowings with them and fairly high earning capacity.

Hence if you aren't happy with your banker try another one. I have found that at times the problems comes down to the person you are dealing with.

Off course if you deal with Rolf or Kristine then it is unlikely that you will have any problems. It might save a lot of headaches.

Cheers - Gordon
 
In some cases it 35%

I was reading in APM that some banks are going to 65% lvr on loan for smaller apartments apartments under 50sqm.

I know that the valuation they give aren't good for them.
I recently sold a under 50sqm apartment it came out to be $25k more than the bank was willing give me as a valuation.
Then it will only lend me 65% of this lesser valuation.

Stange thing was when the purchaser engaged to do a valuation (by the same person), the valuation was $10K more then they were willing to lend me.

Its a crazy game.

But all said and done I was happy with the choice I made.

Respect, Peace, Out.

OPM-addict
 
I'm finalising talks with St Geo tomorrow 23.3.04 regarding financing my purchase of 4 flats as IP, they told me it was residential and loan would be residential, not commercial, tomorrow will tell if the offer holds up. will post info tomorrow night.
love this website, you really are a great group of very helpful people.
crest133 ;)
 
Rolf Latham said:
Update on NAB, max 3 per title now b4 going over to commercial !
Click to expand...
NAB are making things really hard for investors now. No reval within 12 months, x-coll everything, and now this.

I hope it's not the signal for the other lenders to follow.
 
crest133 said:
Hi all,
St Geo confirmed today will lend me 80% at residential rates on block of 4 flats as IP. can't complain.
cya
crest133 ;)
Click to expand...
Well done Crest.

StG gets added to my goodguys list :D
 
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