Please Can Anyone Help Us??

My husband and I have built 2 Waterfront properties on a Marina in regional SA. We live in 1 property and holiday rent the other.
Both properties are worth 650k each (valued 2 weeks ago) and we owe 507k on each also.
The holiday rental is doing really well, better than we expected, and income earnt in 7 months, since it started, to 30/6/09 was $23390.
Our problem is that since we moved here, we haven't been able to find jobs. And living on $750 per fortnight, with 2 mortages of $2000 each per month has been difficult. The income from the holiday rental will cover itself but we have had to use that money on bills etc. So for May June July we couldn't pay the mortgage but we found a very understanding mortgage collector at the anz and she arranged for the payments to be capitalized.
However, as at today, we are now 2 payments ($8000) behind again and the hardship team have deferred those payments and will also defer the October payment.
This has all happened because we relied on a broker to have revaluations done and access equity as a buffer to see us through. He has let us down and no longer even returns calls.
We have given up hope of obtaining jobs in the time necessary. The chance of getting a 'permanent' job that the banks will consider in the time we have is pretty remote.
We decided, when we first started going backwards, that we would also holiday rent the house we live in and move out and rent ourselves. We have calculated that each house would earn approx. $54000 per year based on past and future bookings. So thats $108000 a year. My husband has just obtained a casual job earning $800 a week and I get $10140 a year FA.
We have applied to the ANZ for $100000 - $30000 to furnish the house to holiday rental standards and the remainder to payout existing debts and the approx $20000 left to act as a buffer.
It was not approved. They say the income is 'projected' not proven and also because we have the missed payments.
Does anyone think they can help us get out of this NOW? Could we get a low doc to get us 90% of the value or $100000 or even just $30000 to furnish the holiday rental so we can start earning money over the peak christmas season? We are forecast to make $12000 just for Dec and Jan for the current holiday rental.
Should we use private funds from somewhere?
My husband and I are just totally convinced that we can get out of this and even make money through rental income and capital gains, that we just so do not want to let the houses go, and lose what we have worked so hard for. Because thats what will happen. The ANZ will only wait for so long.
Or should we just try to get any kind of work just to keep the payments up?
I'm sorry this is so long, but this is almost the last thing I can think of - to get advice from people who know what they are talking about :)
Please feel free to post any comments and opinions about our situation and if any of the brokers on here feel that they can help, please let us know :confused:
 
Whereabouts in SA are you living? Hindmarsh Island? I think you might need to reconsider letting out both properties and move to where the work is. Adelaide. It isnt going to get better anytime soon unfortunately and regional SA has been hardest hit.
 
Hiya

The arrears havent just come about because of the broker letting you down........... I can see how you could interp it that way, but I think the lack of PAYG income possibly has a bit to do with it as well

I dont know the story, but the good thing is that you are sticking to getting a resolution and taking it on.

In regards of a furniture package, first things first.........check to see if your credit file is clear.........

ta
rolf
 
Hi Hopeful1,

Holiday house #1 pretty much pays for itself (according to your post) -so fine let it earn its keep.

Situation now for you:
You are living in #2 worth a $0.5M but you are only earning $50K between you and hubby.:eek: (that's not going to work)

Borrowing any more (even if you found a lender that would) is just going to be digging yourself further into a hole of debt.

Your current strategy is relying on immediate CG to refi cash out of each year. This may not work reliably for you as CG on a year to year basis is not guaranteed. Some years = -ve, some = zero, some = 40%. You do not have a large enough portfolio to do this as a strategy.

You have a few options if you want to keep both houses:
1. Rent out holiday #2 house if it can support itself as #1 does. Pull up stumps move back to the city & get decent jobs. Rent a place until you can afford to buy a PPOR.
2. Earn more money from a job or business NOW where you are or see point 1. above

It is easy for outsiders (like me) to see how to fix things.

You are too emotionally involved in trying to keep houses + lifestyle and are desperately grasping at straws to stay afloat. Your MB can't help - so he's given up. Getting you more cash from debt will not help. You must get more income or reduce your expenses or both.
 
90% lo doc is very hard to finance, let alone with arrears.

Hate to say it, but sell before the decision is no longer yours to make
 
Hi Everyone
All we want to do is holiday rent both properties because they will more than pay for themselves. Each house will make around $54000 per year. Our problem is we need approx. $30000 to set up the one we're in, so that we can holiday rent it. We don't want to stay in this house, we will rent elsewhere.
We have documents from an agent stating that 2nd property will holiday rent as well as 1st.
Spectre - We have used savings and the holiday rental income, Newstart and Family Allowance.
Pushka - We are at Copper Cove Marina Wallaroo. Going to Adelaide is a possibility
Rolf - Credit File is ok. That wasn't a reason ANZ didn't approve. It was because of missed payments and as income is a 'projected' figure.
Propertunity - No.1 IS what we want to do. Each property is worth 650k. We don't want to live off CG. All we want is to hold onto houses and let them pay for themselves. EG Holiday Rental Income $54000 - Mortgage at 5.11% $25907 = $28093 surplus, profit. As you can see they will pay for themselves.
We just need $30000 to set up No.2
Super Sam - 90% would be fantastic but 82% will give us $52000 - that will be enough to do what we want. Why should we sell, when, if we rent it, we can make $28000 per year? On each? If we do something now we will be ok.

I hope that explains our situation a little more.
 
Hold on. You just said that rental income was 23k for 7 months, and that's above expectations. So that's 40k a year. Where did the 54k a year come from?
 
90% lo doc is very hard to finance, let alone with arrears.

Hate to say it, but sell before the decision is no longer yours to make

Going to have to agree - sell at least the one you are living in. Rent a small affordable place. Regroup, replan.

This has all happened because we relied on a broker to have revaluations done and access equity as a buffer to see us through.

According to your figures, there is very little equity to access in any case - you are at 80% already of a valuation done 2 weeks ago. How much were you hoping to access (and still managed an INCREASED mortgage)?

It must be a very stressfull time for you - been there done that. We sold half our IP portfolio at (what turned out to be) the bottom of the Melbourne market - but we feel much better having done that, than tried to have survive through it. Not worth it.

The Y-man
 
Hold on. You just said that rental income was 23k for 7 months, and that's above expectations. So that's 40k a year. Where did the 54k a year come from?

You're right Hooray.

And one other thing I can't quite figure - let's say income $40k pa plus $750 per fortnight (according to original post).

That's a total annual income of $59k

Mortgage payment $48k, leaving $11k pa to live on - $966 per month. We've survived on less than that..... (granted it wasn't easy, but wouldn't actually miss any payments)..... admittedly there would be other overheads (rates etc) but the new job should cover?

The Y-man

ps. hang on - later post talks of family allowance - so could be children in the equation - can change picture dramatically....
 
this does not sound good at all.
i agree with the others that have said this will need to be addressed promptly.

the loans will need to be serviced. or you will need to sell because it would appear you are overcommitted. as has been said refinancing would now not be an option.

great if you can rent the 2 out but will the cashflow be there to service the debts?

i think you are probably aware of these options. possibly the sooner you act the better.

certainly try to get employment asap.

awful position to be in but i hope with action you will be able to move on from this nightmare.

regards.
 
Why should we sell, when, if we rent it, we can make $28000 per year?


I hear you .... BUT... things DIDN"T go to plan. You should now be on PLAN B. It could be that taking any action now could be too little, too late.

Having said that, that is purely in light of my own experiences. My feeling is if things don't go according to the plan you have now - it could just get a whole lot worse! You credit rating could be wrecked, you might end up fire-selling both houses - and losing the lot....

It's a double or nothing gamble - keep one and be sure, or risk both for the possibility of having double.... For me, I'd rather keep the one sure bet.

Cheers,

The Y-man
 
Hi Hooray and Y-Man

The nightly rental income will be 40k based on past and future bookings. We have just gained a contract with Uniting Care where they will rent house in off peak, middle of the week periods, which leaves weekends free. A lot of bookings are Fri and Sat nights, so that works out well and is worth $14250 per year. $40000 + $14250 = $54250.
We just want to get out of this house at this stage and let it look after itself. All the novelty of living waterfront having your boat out the front etc isn't much fun with all this financial stress. We just want to rent somewhere and not have to worry and we think we can. Just need someone to get us $30000 from somewhere.
With husbands job, now we can look after ourselves and I've been looking too, so things can get better.
We really don't want to sell. We feel that we'd be throwing money away if we do.
Thanks for you thoughts
 
Y-Man
When you are paying $250 to $280 per night, don't you think you deserve furnishings of quality? Maybe that is why we are making so much money and rental no. 1 is in such high demand....AND we know No.2 would be as successful.
 
Y-Man
When you are paying $250 to $280 per night, don't you think you deserve furnishings of quality? Maybe that is why we are making so much money and rental no. 1 is in such high demand....AND we know No.2 would be as successful.

Fair enough - what is the expected life on the furnishings? (i.e. when is the next batch of $30k required)

Cheers,

The Y-man
 
I'd sell both and start again. How do people get themselves into these situations?

Isn't investing/life supposed to be fun and profitable? I don't get it and i read it so much on here.

Did you not check if there was any work available before the event? Did you allow for all risks/eventualities? If so, What happened?
 
Who knows? 5-10 years and we have insurance for any breakables in the meantime.
Anyway, that is not what I am concerned about now.
I just want to know if anyone knows a way for us to refinance, restructure or just borrow money using the equity in our houses to access $30000 (or more) of the equity.
We are at 78% LVR at the moment. We have 22% equity in our houses to use, how do we get at it?
How much can we get on a low doc?
 
If you are so set on getting another loan and furnishing the place, why not go for one of those places that offers no deposit, no repayments for 12-24 months.

Not that I would do it, your approach is far too risky for my liking, how long have you been going backwards for? Before you decided it was time to move out?
 
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