"Peire,Gee Cee I have opened the Bubbly!!!"

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From: Lesley Watson


Dear Peire, Gee Cee and all other members of this forum,
The time has come where I can relate back some experience that may help someone else, and to Thank both Peire and Gee Cee for your valuable information and encouragement. I would have not only lost interest but given up on this venture if it had not been for your advice and support THANK YOU!!!!
My husband and I are now the owners of a set of 6 units our first IP. Purchase price including cost $300,000 100% financed. Rent P.A. $34,000.
Red brick construction very low maintenance.
I made posts back in January, February regard Commercial, Investment and housing Loans. The issue being the main stream banks were refusing to finance our proposed investment as an Investment Housing loan,Investment housing loans were only available for set of 4 units and under.They wanted us to take a commercial loan over 10 year I&P. Not possible.Peire your contact to Kim in NAB was the key to my problem. I contacted Kim and she relayed the same info you gave via this forum. That the NAB COULD finance such a venture as long as the property was zoned Res. My local branch of the NAB was one of the original banks I contacted who gave me the bum steer.Another application was sent through to the NAB with reference to the conversation I had with Kim.
Presto the loan has been approved, even better still under the Investors Choice package. We are now dealing with our local branch of the NAB and may I say he is being more than helpful under the circumstances as he is feeling just a little embarrassed.
This has been a great learning experience for both myself and my husband. We did solve the problem and have indulge in a bottle or two of french bubbly. I just wish I could have shared some with you .
Now all we need to do is start working on the next IP!!!!!!
Cheers Lesley
 
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Reply: 1
From: Pierre .


Fantastic!! I'm glad I could be of assistance.

Now that you've moved into the world of "it can be done, I just need to find out how...", your opportunities will be abundant.

 
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Reply: 2
From: Rolf Latham


Great stuff Lesley

100 % finance (without any other security ?) ! Well done, you will be deluged with with information requests.

With me being second inline, I have many clients I have not been able to help with this type of deal. The residential bit, sometimes yes, but the 100 % incl costs with a big four bank - great !!

Regards

Rolf
 
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Reply: 3
From: Rolf Latham


Lesley

Your case has also proven that the policies of most financial institutions are in fact not hard and fast. They are mostly guidelines which can be bent by the individual assessor.

Once again well done

Rolf
 
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Reply: 4
From: Michael G


Hi there,

I'm sure you're going to be inundated with request for details, so I may I ask if it would be possible to post them to this forum for all to learn from?

You need not reveal the address or suburb, but the figures, ie asking price, sales price, purchase costs/fees, expenses, bank loan, interest rate, terms, problems, solutions, etc would be great.

Michael
 
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Reply: 4.1
From: Lesley Watson


Dear all,
Just to clear up a little confusion. We did have to put up our residence as security. Approx $300,000 + equity in that. As mentioned in previous posts we are self employed with not a very high realized income.Anybody else who is in this position will understand the banks almost want to know what you had for breakfast.
I am hoping to revalue the units in a year or 2 and have our residential property removed from the mortgage.
Some details Purchase price of 6 units on freehold title zoned Residential C. $287,000
Costs approx $13,000 (QLD stamp duty alone $9,000 approx.)I did a lot of the homework with regard to financing before we made an offer. When we did finally begin negotiating the purchase price I thought I had all the cards in place. Not so, we actually had to extend the finance date twice. This really p.... off the vendor, he almost pulled out. The loan is fixed for 5 years interest only at <7% . Could have got 6.5% over 3 years but opted for 5 years instead. Rental income 6x110 PW=660. 660 x 52 = $34,320.
Interest PA = $21,000. approx exp. $7,000
$28,000.
Positive Cash Flow of $6,000 in first year .
I hope this has answered some of the Questions.
I seem to be able to see a few more opportunities in the wind. I wonder if the bank will come up with the funds again. Oh could I be so cheeky.
Cheers Lesley
 
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Reply: 4.1.1
From: Rolf Latham


Very Very Nice deal Lesley.

Why not be cheeky ?

If they wont come to the party, you can always start the cahse again with someone else.

Most lenders will take a secong collateral mortgage.


Rolf
 
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Reply: 4.1.1.1
From: GoAnna !


Rolf,

What do you mean by a second collateral mortgage?

Anna
 
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Reply: 4.1.1.1.1
From: Rolf Latham


Anna

In lesleys case, all the security is with NAB.

If NAB says no to the next loan, there are only two options.


1. Nab provides LOC against excess security, this provides for a deposit and costs whcih can be used for another IP with primary lender for IP being elsewhere.

2. If NAB will not do this because the borrower is outside NABs service criteria, then you allow the primary lender for the IP, say ABC bank to take a second mortgage on the residence where NAB holds the first.

Many lenders will take second mortgages for collateral or deposits if you like. Since the second mortgage is behind "prior ranking debt" in this case the NAB first mortgage, ABC bank will only allow a max of generally 80 % LVR. THis minimises complications with Lenders Mortgage Insurance..

ta

Rolf


Rolf
 
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