Accessing equity from an IP as a deposit for another IP

Hi

I am buying a new IP using the equity from another old IP i already own.

The problem i have is that the bank hasnt yet released the equity from the old IP. (Delayed because the bank person who signed the loan docs didnt date it so now theres some kind of hold up). So i dont quite have enough cash to provide as deposit for the new IP.

What should i do? Has anyone encountered this problem before? Should i hold off on signing the contract for the new IP until the equity is released? I could go back to the real estate agent and maybe workout paying a partial deposit. Thats an option i guess. But i dont want to mess them around with fianances (which is essentially my problem).

Cheers

 

Your loan docs might have to be resigned if the banker didn't date it correctly. So you might be delayed a little longer.

Since the loan is formally approved I dont see the risk of signing the documents, your hurdle is just getting the cash in time yo pay for the deposit.

 

Thanks. That sucks.

I dont have any problems with paying the deposit (i can move some cash around to make it up). But if i pay does that mean say come settlement time the bank will limit the amount they lend to whatever is still owing on the property?

I just dont wont my cash getting tied up on a deposit.

 

Could you get a deposit bond?

It won't impact on the loan amount/s you've been approved for. However - there could be issues with deductibility if you use cash for the deposit rather than the borrowed funds. Chat with your accountant.

Cheers

Jamie

 

negotiate a smaller deposit, explain the situation

You could also borrow from friends or family, or even a spouse potentially and then refinance this loan with your bank loan when you get it.

 

Communicate with vendors through the agent about the delay for the deposit balance. Perhaps a smaller sum initially and the balance in days. And get the broker focussed on sorting the re-signing. Should (famous last words) then happen quickly.

 

Thanks guys! All great advice i never considered.
Actually got the contract and the deposit is due on the date the subject to finance clause expires (in 14 days). So should be all good actually!