finance brick wall

PPOR= 750000 debt $0
IP 1 value= 450000 debt 310000 rent 320
IP 2 value=460000 debt 405000 rent 385
IP 3 value=460000 debt 295000 rent 250
loc value=235000
loc debt= 170000

Having problems getting money.I am on $85000 my wife is on maternity leave.
I am using equity in the loc to fund the shortfall.As my eqiuty grows and it will, the question is::::-

how do yo obtain finance when you dont satisfy the banks criteria.?

If you were to fund our lifestyle through the increasing equity. how do you structure to be able to get access to ongoing equity growth.

does anyone have a solution
 
how do yo obtain finance when you dont satisfy the banks criteria.?

Have you thought about getting a cash flow positive property or two to balance up your portfolio. What what I have learnt banks tend to put the brakes if in their mind anymore negative geared properties will be a potential risk to them if they lend you more money. Through + cash flow properties even though capital growth may not grow as quickly at least it allows you to borrow again to increase your asset base.
 
Very sorry but you can't be serious.:confused:

You would like to borrow money, and believe banks should lend you cash because you own four properties and their value is going up?

There was a story on news.com.au where customers were 'using their houses like credit cards' and it seems appropriate here.

Stated - $0 against PPOR, what is the Loc secured against

Whats the purpose?
Living beyond your means? (Line of credit)
Increasing interest rates...

Need to read the Uniform consumer credit code. True, most of your borrowings seem to be for investment purpose but the UCCC will come into effect by years end. Can't service, can't borrow.
 
Hiya

Cant really advise much on the data provided, however there is another purchase or 2 or some equity draw there if all the debt is for deductible purposes and u dont have any kids or other commitments not shown here.



ta'rolf
 
Finance brick wall.

All debt is Tax deduct.

All IPs crossed but in process of uncrossing,will have Loc secured against PPOR.

If I was to balance out the portfolio and buy cash pos , how do I do this considering the banks mightnt lead on current situation.
 
Think going forward will depend on the end lvr on your PPOR.

Another reason why you dont X collateralise your loans along the way.
 
I think your issue is serviceability and possiblly you may have X-collateralised with one bank.

Your rents and salary are about 135k....based on a rule of thumb 40% of gross calculation you are going to be maxed on serviceability anyway.

Don't like your chances....unless you go lo-doc...even then it maybe a stretch.

PPOR= 750000 debt $0
IP 1 value= 450000 debt 310000 rent 320
IP 2 value=460000 debt 405000 rent 385
IP 3 value=460000 debt 295000 rent 250
loc value=235000
loc debt= 170000

Having problems getting money.I am on $85000 my wife is on maternity leave.
I am using equity in the loc to fund the shortfall.As my eqiuty grows and it will, the question is::::-

how do yo obtain finance when you dont satisfy the banks criteria.?

If you were to fund our lifestyle through the increasing equity. how do you structure to be able to get access to ongoing equity growth.

does anyone have a solution
 
in a nut shell i have learnt.
1, if i have 1 mill in equity, and no income , i can borrow zero.
2, if i have no equity , and earn 1 mill a year i can borrow what ever i want.

no income = you don'tmeet their lending criteria. so when borrowing apply for the loans , so it looks like you do earn income , as best you can that is....
 
You've hit the standard wall that you hit when you buy CF-ve. It's not a strategy that keeps working for more and more properties. It works only until you run out of income to deduct tax from. It also only works while equity goes up.

Even if you bought one or more properties, you are still stuck. Best way out is make a CF+ve your next purchase and renovate the existing properties to improve returns and equity.

Cheers
Pulse
 
What about using a cashbond to produce a higher income for yourself? That was what Steve Navra advised someone on here a couple of years ago in a similar situation.
 
Spot on.....that is why I very rarely see people who own 600k properties go onto purchase more properties. The CG approach rather than the balanced CF/CG approach does not let you continue to acquire more properties.:(

You've hit the standard wall that you hit when you buy CF-ve. It's not a strategy that keeps working for more and more properties. It works only until you run out of income to deduct tax from. It also only works while equity goes up.

Even if you bought one or more properties, you are still stuck. Best way out is make a CF+ve your next purchase and renovate the existing properties to improve returns and equity.

Cheers
Pulse
 
You really need to have a broker with access to a wide range of lenders servicing calculators come and have a chat.

While you have a strong equity position, equity is only part of the equation. It's of great value if you have the income to access it, but its of no real value if you have reached your borrowing capacity. You may have reached your capacity, but its best to have someone crunch the numbers for you so you know exactly where you stand.

FYI, some lenders assess gross rental income x 80%, some use 75%, one or two use 100%. Some allow for negative gearing, some do not. This is why cash flow positive properties tend to allow you to grow your portfolio moreso than neg geared properties, although the trade of is normally capital gain ( but not always) But thats the balance that you'll need to decide for yourself. Each additional neg geared property is soaking up income, so only you can decide what sort of portfolio you want to build. When your wife returns to work your position will probably be far stronger, so maybe its just a matter of waiting until then to revisit your options...

You'd also need to provide information on any other liabilities such as credit card limits, personal loans, dependent children etc, before anyone could give you an accurate answer.

As far as using equity to fund lifestyle, you'll find that taking "cash out" has become stricter. Its still possible, but the days of being able to use a LOC to take large amounts to do with as you please are over since the GFC. These days, for amounts approaching 100K and over at LVR's above 75-80%, most lenders will want to see evidence of what the funds will be used for and may want to control the funds.
 
~~scatches head~~ :confused:

I may have missed it but has anyone asked when does wife go back to work and her income? May that assist with servicability?

Forgive me if I have missed something but it's well past my bedtime. Damn this IPL cricket (wife out so I finally get to watch a bit :))
 
I am in a similar situation , I have more than enough equity and my LVR are at 53 percent , the properties have been rented out and are in prime locations with expected growth in capital to be around 14 percent , yet according to the banks I can not afford the repayments , Yet I constantly read in property magazines of people who are able to borrow massive money on less income to buy poorly located property , I just don't get it
 
Yet I constantly read in property magazines of people who are able to borrow massive money on less income to buy poorly located property , I just don't get it

Probably high yield. Some people choose these ones as it allows them to buy more and more because the positive cashflow actually assists their servicability.
 
I am in a similar situation , I have more than enough equity and my LVR are at 53 percent , the properties have been rented out and are in prime locations with expected growth in capital to be around 14 percent , yet according to the banks I can not afford the repayments , Yet I constantly read in property magazines of people who are able to borrow massive money on less income to buy poorly located property , I just don't get it

There may be more to this than is obvious.

banks arent created equal, nor are brokers.

You may find that be doing things slightly differently, you may get vastly different results.

ta
rolf
 
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