Looking for finance

From: Michael G


Peoples,

I need a little assistance in sourcing some funds.

I have a deal I'm working on which involves a torrens-title (freehold) single level 2bed/1bath cottage 5 mins drive from Bondi Beach/Sydney, 5min walk to local shops.

The vendor is an elderly gentleman of 72 and has agreed to sell the property to me with full title, for $200k (value of property over $400k) on the condition of a life lease.

Going through normal financial channels have found that the life-lease makes the asset illiquid and thus unfavorable to the lenders. So I ask if there is anyone here who knows a great broker who may be able to assist?

I need either;

A good broker who can tap into some finance that is ok with the life lease.

or

A good solicitor who can write some clauses to the contract which would make everyone happy as I maxed out my current solicitor beyond his abilities. The negotiations are still in progress, so we are able to write additions without a problem.

Please email me if you have any leads.

Regards
Michael
 
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Reply: 1
From: Mike .


Hi Michael,

Are you sure you want to pay interest on debt finance without any rental yield to offset the interest? At normal Sydney yields, you will have foregone $200,000 rent in just over 8 years. Plus the opportunity cost of the interest bill. What's so good about this deal?

Regards, Mike
 
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Reply: 1.1
From: Michael G


Hi,

The leverage of the dormant equity and acquiring an asset at 1/2 price in a growth area.

Have you ever heard someone say, "I wish I bought there 10 years ago..."

Well to me, this is my chance to turn back the clock.

Michael
 
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Reply: 1.1.1
From: Andrew Hawkins


I would not pay over 30% of valuation.
The tax office may not allow interest to be claimed if market rents are not received.How long will he live? How long can he live there? - until death or until unable to? Have you taken maint / rates etc into account?
Andrew
 
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Reply: 1.1.1.1
From: GoAnna !


Hi Michael

I looked at a deal like this in Melbourne a few months ago. A lovely old man had offered his house as security to his son-in-law and the son-in-law divorced the daughter, never paid the loan and ignored the court direction to pay the loan. The bank stepped in and said that he needed to repay the loan or they would take the house. He was offering the house for the value of the loan on the condition that he could stay there for the rest of his life rent free.

I dd my sums and worked out that if he didn't die within 4 years I would be out of pocket. Although in his 80s he looked pretty healthy to me and there was no way I could sit around hoping that he could die so I wished him luck and walked away from the deal. I hope he found some-one who had an idle 250K that they were happy to sit in his property for the next 20 years.

GoAnna !
(aka Anna before she got real)
 
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Reply: 1.1.1.1.1
From: Rasputin .


maybe buy the property for a greater value and use the extra funds to let the guy pay the rent, that way you stil lget the undervalued property and get rental income to please the tax office...
 
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Reply: 1.1.1.1.2
From: Andrew Hawkins


Was this the 2 story behind the old hotel?

Andrew
 
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