4 pack, 1 title

Hey guys,

Would love some suggestions on lender/product for the following transaction.

4 units under 1 title.

As is:
PP: $800k
Val: $800k
Current rental $60k

Option to renovate and strata title at a cost of $200k.
End Val: $1.6m
End rental $80k

Will pay costs, I.e. stamps, legal, tfr with cash.

Would like to do the deal without putting in cash or equity if possible.

Any options with staying mainstream?

Or going 2nd tier and then throwing the units mainstream after split.

The upside on the deal is the land being zoned for 8+ units.

Long term is to pay off, demo and go multi level 8+ units.

Cheers!

 

If you don't wanna use cash or equity - how are you going to purchase it? You need a deposit for the initial purchase,
How are you going to pay for the renovations and Strata Title if not with equity or cash?
If end goal is to demo and build 8+ units why bother renovating and strata titles now?
Speak to a Mortgage Broker

 

There's a few lenders that can finance this type of property, but in additional to the purchase costs you will need a 20% deposit or additional security (equity).

Standalone loans for 100% of the purchase price simply don't exist.

 

CBA do this in terms of lenders that accept 4 units on one title.
But you'll need a deposit via cash or equity. All lenders will need this at purchase stage.
Once your done with your work, you can reval'd everything up, you can get your funds back out. Most lenders would do this as it'd be financing individual units - subject to all other lending criteria.

 

Cheers mate, wasn’t aware CBA would do 4.

Will they allow you to keep all 4 on completion with seperate titles?

Should have mentioned that I would prefer to use the end completion valuation to achieve a sub 80 lvr.

If I have to use equity, so be it. Should only take 3 months realistically and I want to retain all units.

 

Separate titles is actually preferable to most lenders, so no issues there.
You would need to buy it as is first, then use the 'as if complete valuation' to fund the construction

 

The CBA (and a few others) will certainly allow you to purchase and hold 4 units on one title.

You won't get any lender to use the 'end value' for the valuation. There's no guarantee that the work will be done (or even if it can be done) to subdivide the property. You could only top up the loan to recover the cash after you've done the subdivision (when the value has actually been realised).

 

Borrowing 80% on an "As If" complete Val is smart if you're confident it will stack up.

There is a few lenders that will do this as residential rather commercial which can save you a few dollars on interest.

But servicing the loan And cashflow is another thing.

Can you maintain the repaymemts during construction without rentsl income ?