How to Finance Property Investment.

[Booboo]

Evening all, fairly new to this forum but find it great for info..

This might have been asked before but unfortunatly I havent found it, so here it is...

We currently have a few investment property's, all have a reasonable amount of equity in them, however we now find that our income will no longer support new loans.
What we would like to do is continue building the portfolio and utilise a line of credit to make up the short fall between the rent return and the holding costs, but we find that the normal loans only look at your income capacity not allowing you to utilise the equity in a line of credit to fund any short fall.
Does any one have any suggestions as to how to over come this funding opsticle.

 

[Bandita]

Evening all, fairly new to this forum but find it great for info..

This might have been asked before but unfortunatly I havent found it, so here it is...

We currently have a few investment property's, all have a reasonable amount of equity in them, however we now find that our income will no longer support new loans.
What we would like to do is continue building the portfolio and utilise a line of credit to make up the short fall between the rent return and the holding costs, but we find that the normal loans only look at your income capacity not allowing you to utilise the equity in a line of credit to fund any short fall.
Does any one have any suggestions as to how to over come this funding opsticle.

Hi Booboo,

Do a search on 'no doc' or 'lo doc' loans - (search the finance threads for sure) - it sounds like what you're looking for, and there will be heaps of info in there to get you started (I'll see if I can find a good link to paste in here for you).

Also, try talking to some of the fanstastic mortgage brokers from this forum, they should be able to help you.

Cheers,
Jen

 

[emu]

Search for ricksters thread titled "Cashbond for dummies"...........a great read

 

[Rolf Latham]

Hiya

There are many a way to get around this problem

Generally,some lenders have much better service models than others so no or lo doc laons may not be required just yet.

Seek the services of an independent mortgage broker and see whats around.

ta
rolf

 

[Mark C]

Booboo,

Do yourself a big favor, learn what you can about low doc etc. Talk to some people who are using it and KEEP AWAY from brokers!

You will get a better deal going direct to a bank, the only thing a broker will help you with is filling in forms, mixing up your folio and delaying everything.

Did I mention the delays.

Mark

 

[grossreal]

hi booboo
I am not with mark as to stay away from brokers but there are alot around that do not understand lending never mind investing.
so you need to talk to a few and get one that can do the job and you are comfortable working with but thats another post.
you can try and I do to term deposit 12 months of interest this instantly gets you over the serviceability wall as the lender has droped there risk and you leave it there in case you can't service the loan.
you drop the loan amount but you get the loan.
you can deal with bank directly but for me thats a no brainer unless you understand finance as no bank has all the best offers so get the loan thats suited to you.and multi brokers will give you this and check there deals the one with the best gets your business.
the serviceability issue is not a major issue and is easy to get over as long as you get the right lender.
and no I won't broker the deal.
my .002

 

[DavidMc]

Do yourself a big favor, learn what you can about low doc etc. Talk to some people who are using it and KEEP AWAY from brokers!

You will get a better deal going direct to a bank, the only thing a broker will help you with is filling in forms, mixing up your folio and delaying everything.

Did I mention the delays.

That's not always the case. Yes, my first two brokers weren't crash hot but a great one (like my current one) saves time and money.

 

[s_t]

Cant agree with this. A broker got me a deal that I wouldn't have had a chance of getting myself!

Booboo,

Do yourself a big favor, learn what you can about low doc etc. Talk to some people who are using it and KEEP AWAY from brokers!

You will get a better deal going direct to a bank, the only thing a broker will help you with is filling in forms, mixing up your folio and delaying everything.

Did I mention the delays.

Mark

 

[Rolf Latham]

Hiya Mark

Brokers, KEEP away from clients that let their folios get into the hands of the brokers

Why are you allowing a broker to mix up your title deeds ???

ta
rolf

 

[Mark C]

Hiya Mark

Why are you allowing a broker to mix up your title deeds ???

Never said that I did.

Rolf you’re a broker and even you state that you’re "confused".

What can I say, it's the nature of the beast.

WANTED REWARD OFFERED
If anyone can find the mythical beast known on this forum as "A good Mortgage Broker" then they should catch him, stuff him and have him mounted as proof that he really exists.

Might I suggest if he is caught that he be mounted next to the unicorn.

Cant agree with this. A broker got me a deal that I wouldn't have had a chance of getting myself!

More evidence that he exists! Let me get this right the mythical beast flew in one night, created a deal that although it was through a lending institution available to anyone, he was the only one able to put it all together. Those lending institutions are so crafty the way they make their products so difficult for us mere mortals to navigate.

Next time he visits make sure your ready to catch, stuff and mount. If you need help I would love to give you a hand.

But then what would I know.

Mark

 

[coolie21]

But then what would I know.

Mark

I'm intrigued. What DO you know Mark, have you had a bad experience?
Even if a broker did get you the same deal available to Joe Punter, surely he/she could do it saving you at least some of the hassle and shoe leather? And you don't have to pay them either.

For me my time is more valuable than the brokers (no offence to any brokers out there...)

 

[Mark C]

he/she could do it saving you at least some of the hassle and shoe leather? .

The "Saving Time" bit is just the mating call, its really a bluff there's no follow through as most of them have been neutered at birth. But for some reason they seem to replicate well even without the tackle.

I like the city dwelling beastie better, his mating call is

And you don't have to pay them either

Which is also misleading. As we all know there is no such thing as a free lunch, where do you think the money comes from?

Keep a keen eye out for the "Good" Mortgage Broker, it's his migrating season and you just may catch yourself a specimen.

Mark

 

[AndyB]

Booboo,

Do yourself a big favor, learn what you can about low doc etc. Talk to some people who are using it and KEEP AWAY from brokers!

You will get a better deal going direct to a bank, the only thing a broker will help you with is filling in forms, mixing up your folio and delaying everything.

Did I mention the delays.

Mark

Mark,

You have obviuosly had a bad experience with one or many mortgage brokers and that is a real shame. I can unashamedly say that without Rolf Latham as part of my team I would have never been exposed to the variety of deals that are available if you know where to look and have the experience. I have learnt over the last couple of years that "financial engineering", for the sake of a better term is such an important part of the whole property investment equation.

regards
Andrew

 

[Mark C]

Andrew,

That's a fair comment "financial engineering", and with a tad under $20mil in loans it's also fair to say I have found "financial engineering" is better done by working direct with a lending institution.

I've suffered my fair share of blood sucking beasties over the last couple of years. They aim for parts of the body you can't easily reach, before you know it your down a quart and a half.

I even gave Rolf ago at one of my early deals but unfortunately he was unable to help, I ended up getting the deal done by.... wait for it..... going direct to the lending institution. Surprise Surprise!

But by all means sit back pick up the phone and dial up a good dose of delays and added costs, on a double base of delays. mmmm tasty.

Mark

 

[yadreamin]

Search for ricksters thread titled "Cashbond for dummies"...........a great read

If you do a search on Rixter for his posts on the subject you may have more luck

cheers yadreamin

 

[s_t]

Mate, if you are talking about 20mil in loans, you may be right. However, if you've got, say 300k in loans, the bank isn't going to be quite as keen in direct dealing is it?

I know my broker got me in through the 'custom finance' division of an investment bank (I know because they told me - not him...), which involved a much better deal than I could have achieved personally. I am self employed, for less than two yrs (ie. no proof of income), and he got me full doc interest rates on 97% lend. You think I could have got that personally with a 300k loan?

 

[jackstar]

Pardon my ignorance, but what are lo doc loans?

 

[Mark C]

Rolf,

Thanks for the PM, if you feel as though you need to write lengthy posts to defend your reputation then thats up to you. I'm not going to be drawn in to an argument.

I still stand by my words which I'm sure you will also agree is quite possible that "You can get a better deal by going direct to the lending institution". No matter how much you owe.

Mark

 

[WinstonWolfe]

MarkC, am interested to hear more about your journey.
BTW, wouldn't the old saying apply in your case?....

If you owe the bank 200k and can't make a pmt, you have a problem,
If you owe the bank 20m and can't make a pmt, they have a problem....

Can I presume you have a personal banker who visits you at home, at a time convenient for you?

 

[Rolf Latham]

Hi Mark

You are right................negativity is not worth the time.........have a great life.

ta
Rolf