Hi all.
This might get a little confusing so bare with me.
Current ip 1000 + sqm corner block which i intend to build on the back.Currently cashflow positive by about $40 pw.
Current costings for project.
Council contributions $ 5,200
Water $ 6,100
Sewer $ 7,600
Sewer junction $ 1000
Sewer encasement $11,000
Town planner + extras $10,000
Demolish and rebuild shed $22,000
New Shed driveway $2000
Total $64,900
This has the land ready to build and the existing property has a new Garage.
Allowance For construction of 4 bed 2 bath double garage property.
Building
sitecosts
Fittings tiles tec
Grass,driveway etc
Total $195,000
Grand total of $259,000 Property should be worth over $345,000 looking at similar properties that have sold nearby.
Now financing. Bank says my borrowing capacity is more than fine. Problem being that they will lend the $195,000 for the building of the property but they will not lend for the costs incurred with the subdivision and garage build as there is not enough equity in the property and they need security. Things will change when it is completed of coarse. Does this sound normal
OK what i intend to do is use the remaining $ 40,000 i have available in a LOC i have secured against my PPOR to pay for the Sub costs and then borrow the remaining $24,900 to build the Garage etc. Total $64,900. Then the bank pays the rest. After completion i have a loan for $195,000 on the new property that is valued at hopefully $345,000.
I now get a LOC for( 80% of $345,000 minus loan of $195,000 equals)$81,000
I know have a new property with a LOC for $ 81,000 that i can repay the small $24,900 and the original $40,000 borrowed although that amount does not matter as it does not matter which lock it is borrowed against.
End product is a new house that cost me a total of around $260,000 achieving a rent of around $340 that after tax should be neutrally geared.Value should be around $345,000 most likely more.I plan to hold long term.
Is anyone still with me
Ok this is all very alien to me but i think it will work. to all those who have tread this path before. Am i heading in the right direction
Cheers
Devo
This might get a little confusing so bare with me.
Current ip 1000 + sqm corner block which i intend to build on the back.Currently cashflow positive by about $40 pw.
Current costings for project.
Council contributions $ 5,200
Water $ 6,100
Sewer $ 7,600
Sewer junction $ 1000
Sewer encasement $11,000
Town planner + extras $10,000
Demolish and rebuild shed $22,000
New Shed driveway $2000
Total $64,900
This has the land ready to build and the existing property has a new Garage.
Allowance For construction of 4 bed 2 bath double garage property.
Building
sitecosts
Fittings tiles tec
Grass,driveway etc
Total $195,000
Grand total of $259,000 Property should be worth over $345,000 looking at similar properties that have sold nearby.
Now financing. Bank says my borrowing capacity is more than fine. Problem being that they will lend the $195,000 for the building of the property but they will not lend for the costs incurred with the subdivision and garage build as there is not enough equity in the property and they need security. Things will change when it is completed of coarse. Does this sound normal
OK what i intend to do is use the remaining $ 40,000 i have available in a LOC i have secured against my PPOR to pay for the Sub costs and then borrow the remaining $24,900 to build the Garage etc. Total $64,900. Then the bank pays the rest. After completion i have a loan for $195,000 on the new property that is valued at hopefully $345,000.
I now get a LOC for( 80% of $345,000 minus loan of $195,000 equals)$81,000
I know have a new property with a LOC for $ 81,000 that i can repay the small $24,900 and the original $40,000 borrowed although that amount does not matter as it does not matter which lock it is borrowed against.
End product is a new house that cost me a total of around $260,000 achieving a rent of around $340 that after tax should be neutrally geared.Value should be around $345,000 most likely more.I plan to hold long term.
Is anyone still with me
Ok this is all very alien to me but i think it will work. to all those who have tread this path before. Am i heading in the right direction
Cheers
Devo