You have done really well with that wage & kids. Nice work!
Need to borrow $1 MIL
- Thread starter james55
- Start date
You have done really well with that wage & kids. Nice work!
These questions are the good brokers brokers bread and butter
How about acquisition costs?
Then the $100k Granny Flat costs?
I will need to borrow the acquisition costs too. For the granny flat, I will probably have to settle for a garage/shed conversion which will cost about $30-$50k only so I think I can manage that. If I can get funding from siblings then I'll go for a new build.
Yes I've been contemplating that. It would also assist with my land tax bill too. But then I'd have to pay capital gains tax which is a bummer
Yes but usually the pull back will come with increased rates and will make it harder for me to borrow. So my logic is to buy now before interest rates go up.
Yes I've got one kid in childcare but she will be starting school next year so that will free up about $250 per a week. Our house, school, childcare and work places are 5 mins drive each so from next yr there will be no more childcare fees
Thanks Devank. I have learnt everything from this forum. When we started out 5 yrs ago. We were only on $40k each and found it hard even to borrow $300k for our first investment.
Now, we talking!
I would be VERY interested to read more about James55's investment journey.
So the bank has knocked us back on our request to purchase our first PPOR. The amount we want to borrow is approx $1m. The branch lender would only lend us about $700k-$800k. This is not enough to buy a decent house in our area. Working in a bank, I have never had to go to a broker but I think I'll put it out there and see if you brainy brokers can help me out
We currently have 4 investment properties. I estimate the total values to be $2.47m and total debt is $1.8m. Rental income from the properties totals $2980 p/w. We are currently building a granny flat on one of the properties and I have included the estimated final value and income in my figures above.
Me and the wife are PAYG on only $62K each
We are currently renting a place paying $685 p/w comfortably so we figure if we buy a place for $1m and throw a granny flat at the back for $100k which could rent out for $500 p/w we could actually save money living in our own home.
I have heard low-doc loans would be a great option reading some of the other threads here. I'm ok with paying a higher interest/fees initially until I can refinance it to a full doc loan.
Any suggestions appreciated
Edit : I forgot to add, we have 2 kids under 7
^ With 4 IP....you dont need to go down the low doc path....you can stick with your cheap discounted full doc still- just need to go a a "investment" friendly bank that are more "generous" for investors, even if this is your PPOR purchase.
Cheers
If your current bank is happy to lend $700- 800 ( presuming it's one of the big 4) than you can def get close to $1m with a high serviceability investment friendly bank.
Also given your income is low and your total rental income is more than double of your PAYG + mix with the amount you want to borrow, you will need a 20% deposit as your file is rental reliant.
Cheers
Also given your income is low and your total rental income is more than double of your PAYG + mix with the amount you want to borrow, you will need a 20% deposit as your file is rental reliant.
Cheers
As long as you know what you're doing I don't have an issue with it....just checking. I'd recommend some fixed rate security on a big chunck of the loans secured by property you def wont be selling.
Hi Mumbai, as you can see its pretty much all debt. It's not really any great achievement. If Sydney grows another 30% or so then I'd have something to talk about
Hi Mumbai, as you can see its pretty much all debt. It's not really any great achievement. If Sydney grows another 30% or so then I'd have something to talk about
James, i think it is v.impressive!! Reading about success stories is one of the best things about these forums!!
To achieve that with 2 kids and on that income is pretty great. Kudos to you!
Havent been through the entire thread - but if all your loans are with one bank, it could explain why your hitting a servicing wall.
Generally banks assess debt held with them quite conservatively (they apply a larger buffer compared to debt held with other institutions).
Therefore swapping lenders could easily increase your borrowing power significantly. E.g. if you have next to $2m worth of debt held by a bank that applies a 2% buffer, they assess your repayments as $40,000 higher per year (or $3330 p/m) than you actually pay. So you may feel as though you can afford it, but your existing lender may not see it that way.
Other lenders may not apply that buffer and take your actual repayment. This means that swapping banks may add to your servicing by an equivalent amount (an addition of $3333 p/m in income!). That can lead to a big difference in the amount you can borrow!
There's a bit more complexity to it than i've suggested, but the point holds that swapping lenders is a very important part of a structured investment finance plan to allow you to borrow more.
Generally banks assess debt held with them quite conservatively (they apply a larger buffer compared to debt held with other institutions).
Therefore swapping lenders could easily increase your borrowing power significantly. E.g. if you have next to $2m worth of debt held by a bank that applies a 2% buffer, they assess your repayments as $40,000 higher per year (or $3330 p/m) than you actually pay. So you may feel as though you can afford it, but your existing lender may not see it that way.
Other lenders may not apply that buffer and take your actual repayment. This means that swapping banks may add to your servicing by an equivalent amount (an addition of $3333 p/m in income!). That can lead to a big difference in the amount you can borrow!
There's a bit more complexity to it than i've suggested, but the point holds that swapping lenders is a very important part of a structured investment finance plan to allow you to borrow more.
Agree with Marty - fixing some of your loans could be an effective risk management tool with the size of your growing portfolio.
Hey James, regarding your PPR and Granny flat idea, you might want to have a read of this if you haven't already.
http://www.bantacs.com.au/QandA/index.php?xq=435
Here's the thread: http://somersoft.com/forums/showthread.php?p=1109375
http://www.bantacs.com.au/QandA/index.php?xq=435
Here's the thread: http://somersoft.com/forums/showthread.php?p=1109375
Yes I have fixed about $600k at 6.04 about 3 yrs ago on the day before fixed rates went up. Little did I know that was the last time the fixed rates went up. Next month it started dropping. But yeh I will definitely fix it for 5 yrs before it goes up again. Working in a bank we get a bit of inside info when rate rises are announced and can lock in current rates before they go up
Yeh I have a big risk appetite. Worst that can happen is I go back to square one and start again
Yes I have fixed about $600k at 6.04 about 3 yrs ago on the day before fixed rates went up. Little did I know that was the last time the fixed rates went up. Next month it started dropping. But yeh I will definitely fix it for 5 yrs before it goes up again. Working in a bank we get a bit of inside info when rate rises are announced and can lock in current rates before they go up
Haha feel free to share any such insights for the SS community James.
Haha feel free to share any such insights for the SS community James.
I'm not in lending but I'm pretty sure brokers get notified a day before the increase is effective?
The whole bank gets an email notification. I just walk down to my mate who puts it in for me but it could also be done at a branch.
