how much cash equity needed for a 1.9million pruchase?

Have came across a property that is returning 200k+ gross

asking price is 1.9million

package deal consisting of four dwellings each having two units.

Each unit has three bedrooms, bathroom, open plan kitchen, dining and lounge.

simple question is how much cash/equity would you need to purchase something like this as it is four seperate dwellings would it be possible on 10% plus purchasing costs?
 
hi james
sorry to say you are looking at about 30%
are they finished or part complete
they are resi but most will throw it into the comm sector so then it 70% lvr at best some will go to 85% but you have to know them and be a good client(and even thats not some thing most like)
you can get a couple of people to buy two units and then they will go a lot higher 90% is a big ask
you need to look around the 650 mark to make it happen.
now there are other ways to do it but they are not for a board and they are not answering the question you have asked what the equity or cash(they are different) not how do I buy this with very little money down
they are very different.
because to answer taht I need to knwo how much is this vendor hurting.
I had a meet with a legal eagle the other day. and he has a very interesting way of saying the type of buyers out there.
and it all comes down to how much hurting they have and how much of a hurry they want to sell
against how much you want the property for what ever reason.
these are the main driving forces for sales
and price is only a part of that so if you want to buy and you wat to pay this price then 650k is my best guess is it the best option
not by a long shot but I don't nor would I suggest retail buying
 
Have came across a property that is returning 200k+ gross

asking price is 1.9million

I don't want to burst your bubble, but do you realise that the yeild is not that special. It is only just above 5% and that is the gross figure. After you deduct all your expenses (and don't forget Land Tax) you will be heavily neg geared.
 
I don't want to burst your bubble, but do you realise that the yeild is not that special. It is only just above 5% and that is the gross figure. After you deduct all your expenses (and don't forget Land Tax) you will be heavily neg geared.

no land tax in qld

how did you work out 5% gross

the actual gross is 228800

I would also self manage as it is in a town I frequent often

I am unsure you come up with 5% gross? please explain

when the gross before expenses which is what I thought what gross was not net rental income would actually be 12% on the 1.9mill asking price.
Anyway not interested in commecrial loan for something like this thanks for that gross thought that might be the case but you never know unless you ask.
 
Nice yield. :) Don't know where it is..........don't care..........don't share (yet) ;)

Agree with GR, likely a comm LVR and hopefully resi rates.

If they are strata'd, could you not go with different lenders to diversify the "whole lender risk" to the one asset?

If you can pull this off then the LVR's should rise and you'll need less cash in to fund the deal. I am unsure (check with some of the brokers here) if going with different lenders, for such a strategy they look thru this and all give you a lower LVR anyway. If they are all inone line/title, then you will not be able to do what I am suggesting.

Also would depend upon how regional or rural the town/city is that you are looking at. Some lenders will drop the LVR under a ceratin population threshold.

Sounds like a nice deal James. Good luck with it.
 
Looks like a decent deal with a good yield (~10.5% @ $200k pa).
Unless of course its in a one horse town in the boondocks somewhere.

Which gets me thinking. Wouldn't it be nice if RE.com.au added the capability to search for properties by yield. I'm sure it wouldn't be hard to set up.
 
Just a quick back of the envelope calculation based on asking price.

If you round 1.9 mil up to 2 mil, then 10% of that would give you $200k, THEN HALVE THAT, as there are 52 weeks in a year not 100 and it will give you just over 5%, probably around 6% without me getting out the calculator.

thanks for that think I get it.
 
If you are serious about this property, you should ask for verification of the rental income OR ask a PM for the going rent for this type of property.

Our first large property purchase, the vendor stated rental income "based" on full occupancy.When we went for a mortgage, our intended lender required the vendors last 3 years of tax returns. Her income had steadily declined.

This bank decided not to fund this property, as there must be something wrong with it !!!

We went to a different lender.
 
Looks like a decent deal with a good yield (~10.5% @ $200k pa).
Unless of course its in a one horse town in the boondocks somewhere.

Which gets me thinking. Wouldn't it be nice if RE.com.au added the capability to search for properties by yield. I'm sure it wouldn't be hard to set up.

we can only hope have found a lot of agents don't bother posting rental yields even in towns that are usually bought in for the returns and they scratch there head when the other agent sells the property in a few days/weeks they have been trying to sell for months by simply taking the time to telling you the yield wouldnt say one horse town about 8000 people
has had had a woolworths there for 20+ years
with a city less then an hour away and another city 2hours away.
 
Hiya JW

If they are on separate titles AND you can get them onto separate contracts AND your serviceabiity is ok, AND you have genuine savings of 5 %, and the place is an an ok postcode youd have a show.
ta
rolf
 
Hiya JW

If they are on separate titles AND you can get them onto separate contracts AND your serviceabiity is ok, AND you have genuine savings of 5 %, and the place is an an ok postcode youd have a show.
ta
rolf

Thanks Rolf,

Ringing the agent in the morning to get some more details

savings arent great have a bit but mostly have a fair bit of equity.
 
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