Time estimate re : the LOE option was at least until the end of the year to untangle my knotted X-coll mess with the Bank, and then maybe something thereafter....
All those years of xcolling coming back to haunt you Daz.
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Time estimate re : the LOE option was at least until the end of the year to untangle my knotted X-coll mess with the Bank, and then maybe something thereafter....
In my unlearned and untested opinion, being bigger and tangled up is far preferable to having everything completely squared away and in nice little discrete silos, but being significantly smaller.....than otherwise we would have been.
On a serious note....had the MB come around last night....not good news apparently.
Time estimate re : the LOE option was at least until the end of the year to untangle my knotted X-coll mess with the Bank, and then maybe something thereafter....with a hell of a lot of resistance from the other Banks. Still no guarantee supposedly. In the meantime, the advice was, whatever you do, don't leave paid work.
So timing wise, there's the book right out the window.
Either all of the LOE setup is true, and I've got a long road to hoe before I can pull back a wee bit, or that was a crock, the MB gets the flick and it's onto someone who can actually get this thing happening.
Why can't people move quickly....i.e. weeks rather than years ??
I am not planning to LOE but have $500K plus sitting there just in case.........
On a serious note....had the MB come around last night....not good news apparently.
Time estimate re : the LOE option was at least until the end of the year to untangle my knotted X-coll mess with the Bank, and then maybe something thereafter....with a hell of a lot of resistance from the other Banks. Still no guarantee supposedly. In the meantime, the advice was, whatever you do, don't leave paid work.
So timing wise, there's the book right out the window.
Either all of the LOE setup is true, and I've got a long road to hoe before I can pull back a wee bit, or that was a crock, the MB gets the flick and it's onto someone who can actually get this thing happening.
Why can't people move quickly....i.e. weeks rather than years ??
Thanks for the update! I think everyones waiting in anticipation for the right result, none more than yourself.
I'm not sure I understand why it should take all that long either? Are you going to get a second opinion?
the bank will hopefully agree to proceed
Well I'm just not sure about that evand.
Your suggestion of dealing with a "shiny bum" high up in the Bank is exactly what I have been doing for the last 14 years with them. Trouble is, the excellent Banker who I transacted all of our business with got promoted elsewhere.
The clown who replaced him, has been nothing but a brick wall for normal dealings. I didn't even want to bring up the LOE question, cos I knew he'd laugh. Anyway, against my better judgement, I've already done as you've suggested and approached him.....and as expected, he just laughed and said "you've got to be kidding me, of course not." I took that as a no.
I'm sure you've been down this path many times before and I'm sure you're a full bottle on the process....although some of your questions and statements in that last post are a tad askew, given my understanding of the process thus far, so maybe you're not quite flanged up on the subject like you imply.
Apologises if my post came across as dramatic. I'm simply trying to work through a process that I have not done before and am very unclear on. If you have some specific, recent and relevant information on the processes involved that you can share it would be appreciated, not only by myself but also anyone else reading this thread. I wish it was ho-hum. I wouldn't have posted on the subject if I knew all the ins-and-outs and it was simple.
I look forward to any detailed input you could provide.
Most impressive Dazzling - Congratulations.
I'm not in your league of investment success, but could comfortably quit work for a decade or two and live off equity if I had to.
1. I don't learn much off property books anymore, but I'm sure I'd learn off yours. 1 guaranteed customer here!
2. Why does the bank need to know you intend to live off equity? I run at about 50% LVRs and my LOCs are always "for investment purposes". They have never questioned or asked to look at these investments, even when I capitalise interest. After all your life is your greatest investment and we all know the banks have very safe and substantial security backing any LOC you ask for, regardless of purpose. I have assets secured across 3 banks, I'm always honest on my "47 questions" and this seems to have a positive effect of them trying harder to please me. (They know I could borrow at one of the others at the drop of a hat).
3. Because my LVRs are so comfortable, the last loan I got for a property I told them that they have more than enough of my security and I didn't want a mortgage on this property. No worries they said. So I now have a spare title to go and see another bank with. Like an earlier post stated - banks should be absolutely bending over backwards for you just for the privilege of holding a mortgage over your assets and it really isn't up to them what you intend to do with the money. Can't believe your CBA guy even contemplated saying no!
Congrats again - it takes some courage to leave what you know and actually enjoy the fruits of your labour. Many never make the decision until its too late.
Mark
Afterall at your stage of net wealth, your goal should be more asset & income preservation rather than profit maximisation.
Could the major stumbling block be the $ size of your portfolio rather than the LVR ratios.
Personally if i was in your situation i would be looking at creating a diversified income stream rather than just SOLEY LOE option. Afterall at your stage of net wealth, your goal should be more asset & income preservation rather than profit maximisation.
For example you could allocate a portion of your property portfolio to a LOE strategy, dont tell the bank that you are doing this and just set up the facility.
Then allocate another portion of your property portfolio to being a living off the rent, dispose of some of the properties cop the CGT and get the debt situation right down on this section of the property portfolio (and transfer the assets into a seperate trust, again incuring CGT).
This will also give you some flexibility in the future. For example you have calculated that you need 0.25% asset appreciation to be comfortable living off equity. Under this strategy you could go for say 2% asset appreciation for LOE purposes on the LOE portion of the portfolio, and use the rental component of the portfolio under the trust to create a cash buffer. (there are tax consequences of this).