How can I do this?

Hi All,
I have an opportunity to get a block of land at a cheap price off my parents down in the gippsland lakes area for 20K. I would like to buy the block and relocate a house down there. I have been offered a house relocated and set up on foundations for 35K. I currently rent in Melbourne and am quite happy doing this but would like to arrange finance for the above. It would be my first property and would only be a holiday property. What is the best way I can go about this. I would say the project all up would cost around 75 -80K as an estimate and the property would be valued at around 150K.
 
Check with the local council - often you have to lodge a hefty bond to ensure the house is completed to requirements in a reasonable time frame.
Marg
 
Talk to local house relocators in that area and ask if they have any mortage brokers they can recommend who may view a removal house more favourably.

Normally the bank will not like to look at the house for finance until it is on the block and services are connected first.

If you are buying from family and buying well under market value you may be able to have the block revalued and use the equity to fund the removal house or do you have another asset (PPOR) that you can borrow the equity against until the house is finished.

Marg4000 has mentioned that you will need a bond with council. Is it possible to have the payment for the block seeing as it is family the payment is being made to used as the deposit to council? You should be able to have a portion of the bond returned as soon as the house is on stumps and the house tied down (it will vary but should be close to 50 % of the bond) council will then want the house to be finished to their requirements before the balanced is returned.

When the house has been signed off by council if your forecast valuation is correct you should be able to return the balance of the bond to family (that is if they are in the position to let you use it) and deposit back or release any extra securities or funds taken from another asset.

Cheers, Fourex.
 
Thanks for the replys, So i take it there is no way I can claim my First home buyers benefits in order to undertake the project? I could come up with around 20K to finance this and would also be able to borrow money if need be from parents.
My real thought was to do this project and have it valued and then use the equity to buy property in Melbourne. If I only owe 50K on something valued at 150K Then I would be instantly be able to use this?
 
You can get the grant, but you can only apply after the house has a certificate of occupancy, which is going to be after you have financed it. You may be able to finance it with the equity your olds are effectively giving you in the meantime. You need to find out what the terms of the relocatable house are. In terms of using equity down the track, its possible, depending on the postcode restrictions and your income etc etc.
 
Hi All,
I have an opportunity to get a block of land at a cheap price off my parents down in the gippsland lakes area for 20K. I would like to buy the block and relocate a house down there. I have been offered a house relocated and set up on foundations for 35K. I currently rent in Melbourne and am quite happy doing this but would like to arrange finance for the above. It would be my first property and would only be a holiday property. What is the best way I can go about this. I would say the project all up would cost around 75 -80K as an estimate and the property would be valued at around 150K.

Hi sedan

This type of deal is not uncommon but for a first property, with no other assets, would be an 'end value' deal - not able to finance until completed.

In other words, you would have to finance the block & house yourself, and once the house is finished and you have a Certificate of Occupancy from the Council and all the usual Warranty Insurances from your Builder, then it would be relatively easy to finance and thus pay back other people

However:

Be aware that most lenders will not refinance private loans eg loans from parents or other non-registered lenders.

If you are PAYG you should still be able to get sufficient funds to pay yourself back all expenses and then continue with a standard mortgage loan

The FHOG has obligations of residence. Unless you can honestly say that you will be occupying the property as your Principal Place of Residence within and for the required periods of time then you may not be eligible for the FHOG grants and incentives.

Good luck!

Gippsland is a beautiful place

Regards
Kristine
 
Thanks guys, might have to do this a bit later on as there is no rush. Maybe just purchase block first and build later.
Cheers Chris
 
Look into transportable/relocatable houses later.

You'll find that after all the moving and patching up costs they aren't much different in price to a secondhand house anyway, and you get a brand new house with all the modern conveniences rather than an older style house with all the dated inconveniences. Modern transportables are really nice. Relocating an old house seems to be more the thing for owner builders, people with cash up their sleeves, and people with the time and know-how to do the post-move fixing themselves.
 
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