Finance for a block of flats under one title



From: Elwin Chin

I am interested in purchasing a property in Victoria. This property has a block of flats and they are all under one single title. I have approached some banks and a mortgage broker to obtain finance. The banks only willing to lend up to 70% because of the type of property (multiple dwellings on one title). I am buying this property under my family trust name. And I just spoken to my mortgage broker and he told me that not many financial institutions would lend the money to me if I structure the purchase that way. Is that true?
I would love to hear from anyone out there who has bought the same or similar type of property before. Any tips or traps are welcome.

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Reply: 1
From: Michael G


Buying under a trust isn't a BIG problem, just a lot of hassle, and what's a few weeks or months of running around for a deal that may be there with you for years? Some of us work all year around for a salary, so what's a fraction of that time, for the potential equivelant in capital gain?

Also, your loan to value ration will be an issue. My thought would be to ask the vendor to chip in finance a part of it back to you.

Tell them the market may turn at any time and this is their chance to lock in at a high price, but to do this we need to agree to something soon.

If they finance 20%, you just have to come up with 10%.

Just a thought.

Michael G.
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Reply: 2
From: Rolf Latham

Hi Elwin

Unless its in the never never you can get up to 80 % in regionals if you and your trust are "strong" applicants.

Trusts no prob, just lotsa paper work and some increased costs


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Reply: 3
From: Michael Yardney

I've done just what you are talking about on a number of occasions.
All the units on one title shouldn't be a problem, the banks should lend you 80% if it is in suburban Victoria.
As for a trust that should also be no problems, but you will probably have to guarantee the trust as its director. Again if it is a good property deal that should be no problem for you.
Get separate title for each unit and the value of the complex will go up considerably given you a nice capital gain that you can borrow against (tax free) The separate titles should not be hard to obtain if you go about it correctly.
Michael Yardney
Metropole Properties
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Reply: 3.1
From: Anonymous

Do you have to get the block strata titled to have separate titles?
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