Unit blocks?

From: J Parker


Hi all! Thought I'd pick the brains of those of you who have purchased whole blocks of units recently. Besides the obvious things to look out for (ie: building structure, rental returns, location) what else should I be aware of? How important are council zonings? Any advice appreciated,
Cheers, Jacque :)
 
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Sim

Administrator
Reply: 1
From: Sim' Hampel


Hi Jacque,

Think you may have a problem with your forward/back buttons perhaps ?

You can delete your own posts if you need to.

Top right hand corner of the post, second in from the end is the "Delete" link.

 
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Reply: 1.1
From: J Parker


Thanks Sim! Unlike most of you IT heads I am not the world's best computer literate person, but I am learning..
Cheers, Jacque :)
 
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Sim

Administrator
Reply: 1.1.1
From: Sim' Hampel


Just so long as you are always learning, you will always do well !

 
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Reply: 2
From: Rolf Latham


Hi Jax

Finance is one of the bigger bugbears.

Lower LVRs (66 to max 80) and some lenders just plain dont want em

Ta

Rolf
 
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Reply: 2.1
From: Dale Gatherum-Goss


Hi

I also understand that many of the banks treat a block of units or flats as a commercial loan and not a residential loan. As such, and as I think Rolf was implying, the costs, interest rates and terms may be different to the normal IP loans.

Good luck

Dale
 
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W

WebBoard

Guest
Reply: 2.1.1
From: Tony Vippond


Hi Jacque
I have actually purchased entire blocks of units and the main issue is the finance, a traditional lender will want to treat it is as a commercial deal if it is greater than four units and they will only lend 60-70%. However if the price is in excess of $2M you may be able to approach tetrabanc commercial. They will lend at a 90% LVR, as a non recourse loan, but there are costs associated with the facility so it may or may not suit. They are based in Melb contact Ph 03 94194633,

:)Tony.
Ps they will do the same deal for construction or developments.
 
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Reply: 2.1.1.1
From: Wendy Bergsma


Hi Jacque, hope your going to count your best property buddy in on this one?? I don't want to miss out!! Great site by the way!
Wendy
 
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Reply: 2.1.1.1.1
From: J Parker


Thanks guys for the advice so far- I really do learn a lot from this site!

Rolf, if I stuck to a block of four or less, would it be easier to get a 90% LVR? As Tony pointed out, it seems more than four is when they treat it differently?

My dear buddy, Wendy- at last you got onto this terrific forum (told you it was good!)- learn all you can. There's some amazing people here!

Cheers, Jacque :)
 
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Reply: 2.1.1.1.1.1
From: Michael Croft


I have received 100% plus costs finance on a block of 4. Paid full asking and took a 6 month settlement, renoed them and created the body corp/strata titles, finance at the end of six months was 70% of new valuation which was purchase price plus all costs.

This was another 'no money down deal' (shoot! starting to sound like HK or John Burley). 'Sweat equity' got around all the problems of LVRs and serviceability went up as a bonus. It did cost a deposit bond up front.

I am about to do this again in Randwick on 8 art deco units. It helps to find a vendor who absolutely must have 'their' price, they are more likely to take a long settlement and grant unrestricted access. This is not for beginners as there are substantial risks involved, so seek professional advice first!

Michael Croft
 
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Reply: 2.1.1.1.1.1.1
From: Robert Forward


So Michael that was you that purchased that block of 8 Art Deco's in Randwick.

Good on you, they are in a good area.

Cheers
Robert

The Sydney "Freestylers" Group Leader.
 
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Reply: 2.1.1.1.1.1.1.1
From: J Parker


So Michael did you do the renos during the settlement period? I have heard of people doing this but didn't know that it was possible. What if something happened to tradesmen (talking legal liability etc here) whilst they were working on the building, owned by the vendor still, but employed by you? Hope I am making sense here!
Cheers, Jacque :)
 
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Reply: 2.1.1.1.1.1.1.1.1
From: Michael Croft


Robert, I bought the block with a friend and will be teaching him the process. Hopefully he will do all the leg work and I'll benefit from his sweat equity ;-)

Jacqueline, I do most of my renos prior to settlement (doesn't always work with owner occupier vendors). Talk to your insurance broker too, I have a workers comp and public liability policy that covers this situation with Royal Sun Alliance. As a builder I used to have subbies do work on clients buildings all the time and had a nominal workers comp policy in case they were deemed employees. Any worker you let on site should produce his/her current insurances which adds more protection. As I said; beware the traps for young players.

Michael Croft
 
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Reply: 2.1.1.1.1.1.1.1.1.1
From: Robert Forward


Nice one, very nice one.

Keep up the good work and the great posts too.

Cheers
Robert

The Sydney "Freestylers" Group Leader.
 
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Reply: 2.1.1.1.1.1.1.1.1.1.1
From: J Parker


Thanks Michael- hope the Randwick ones go well- nice area, with good strong rental history.
Cheers, Jacque :)
 
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