Thanks, Sash, for your pointers as wellNoice....add to this:
4. Diversify your portfolio not only suburbs in a city but also spread it across the country. Banks look at the risk attached to your portfolio when you get past 10...they don't want you holding all 10 in Mt Duie!
5. Balance the portfolio with yield and capital growth. A couple of years ago I started a thread on a the balanced approach...whilst yield is the petrol in the tank....the capital growth is the nitro which will help you build your portfolio quickly.
6. Be greedy when others are running from a market...and be fearful when others are greedy! Current Sydney investors take note!
7. Once you hit over 10 properties....look at buying newer properties...plan for the day when you get 100k in net income from properties. The depreciation from these will save you a fortune and help build further deposits.
8. Aim to have LOTS of cash in offsets...revalue and put into an offset. This will ensure that you navigate any issues comfortably.
9. Finally there is no reason someone starting today cannot get up to 20-30 properties in 15-20 years in capital cities. Buying on the back of Thargminda..will just give you headaches....
No, wait a minute, a multi million dollar debt portfolio is great.Well, Datto started it
Fkn genius! I reckon we can get some Wall Street bankers to do our dirty work too.No, wait a minute, a multi million dollar debt portfolio is great.
You can package it up, get a ratings agency to stamp it "AAA" on the box and flog it off overseas to some unsuspecting buyer.
In three years time it will classified as junk but YOU will be living the high life anywhere you like. Nothing new here lol.
I suspect you'll find many brokers aren't deliberately keeping this information under wraps - they just don't think this way. It requires the capacity and the willingness to tell you things you may not want to hear, to challenge you, to say no to you even. It requires the capacity to actually advise you and guide you with firm recommendations, rather than just being an order taker. And it certainly requires a willingness to look beyond the majors and the brand name 2nd tiers. ING, Bankwest and the majors (NAB aside) arent going to get you where you want to go when the rubber starts to hit the road with servicing constraints.This thread rocks - this sort of information brokers tend to keep under wraps. Thanks for being so candid.
Thank you remingbi - glad its useful.Hi redom. Fantastic post. Love all ur posts. They r all so informative
As for foundation banks apart from anz, which r the other bigger banks to your knowledge and for the mid tier apart from cba , which others
Do st george and westpac rank as foundation or mid tier
Thanks in advance
I have so much to learn. What are the rules of thumb (or limits) for release of equity?Thank you remingbi - glad its useful.
It terms of 'foundation' lenders, I typically like to go to lenders that treat debts that you hold with them similar/the same as debts you hold with other banks.
So: St George, ANZ, Suncorp.
You'll also need to keep in mind their equity release policies to ensure flexibility is there if you need cash out soon after purchase (e.g renovations, etc).
You can add CBA/Westpac to that list too, or a 'middle tier' lenders (they can easily fit under foundation lender definition too). They both insert buffers to debts that you hold with other lenders, but I typically don't find their buffers as large as the others above.
Most lenders will allow you to release equity up to 80% LVR without hassle.I have so much to learn. What are the rules of thumb (or limits) for release of equity?
See above responses mate.Thanks for that redeem
I just wanted to ask a few more questions. your post has cleared up everything so well that it makes me think of more questions
When i got my home loan on poor i maxed to 80% lvr with nab not knowing any better and used the extra proceeds for deposits on 2 investment properties which i have settled and 10%deposits on 2 off the plan apartments due for completion late 2016
1)So now i have ppor lvr<80% with nab, IP no1 <80% with nab, IP no2 with stgeorge<80% and 2 10% deposits for off the plan apartments not yet settled
As the loan amount is high and i have several properties, going back the other way to a foundation lender and refinancing from nab may not be possible because of lack of serviceability.
I was wondering because i would have taken out equity from the foundation lenders or refinanced later anyway, would it make a big difference if i max out nab now first without using the foundation lenders
If that is the case, and if also the mid tier banks, cba wbc don't allow serviceability either then is it better to max out nab first and then go the other 5 easy lenders or should i share it around.
I was thinking more along the lines of 1-2 more with nab, which brings ip number to 4 and then foliowed by amp till i hit 10 because of their generous servicing and 100% rent use , back to nab and finally macquarie at the end as a long term plan
Of course, this all relies on sufficient deposit and servicibility and other property considerations
Sounds reasonable enough, but best to talk to your broker and map it out with them more specifically. Its hard to get into specifics without knowing more info about your situation. Also just be aware of concentration risk.
2) with the easier lenders e.g. amp nab macquarie as they take actual payments from ofi rather than buffered, is that the same with their own lending
Also would fixing interest rates in todays environment as they are significantly lower than the banks sir, would that increase borrowing power with them
No, they treat their own debt much harsher than OFI debt. Macquarie (and NAB on exception) have a quirky policy that allows them to treat their the same as OFI debt after 6 months. Another reason to keep them up your sleeve.
3) with apra threatening to intervene with the banks, do u think nab, amp macquarie and co ,will start adding a buffer for ofi in the foreseeable 2 yrs
if so, would that mean all the structure will d
Personally I can see some banks tightening up here. I think APRA will work on an approach of tapping individual banks on the shoulder and telling them to get their house in order. The 'actual repayment' lenders carry more risk to interest rate changes, so are more likely to be tapped. But i'm only speculating here. Time will tell I suppose.
4) do these easier last stage lenders calculate interest only or as P&I for ofi and their own lending
5) What regional banks does Adelaides funding line cover
I use mortgage managers to access their 'advantage' funding line. Can also be accessed direct through Adelaide.
6) after how many inv properties do firstmac start calculating rent at 70%
Not too sure actually, they just state it as a policy. Likely to be when rental income > 50/100% of salary
Many thanks and sorry for dragging on
Howdy, good question. Yes it will.Thanks for the post, some great info. in there. Is there any light you can shed regarding credit history checks? I was told that if you continually go to different lenders which run a check against you will actually worsen your score hence affect your ability to borrow more money? Is this the case?