Alternative finance options

Hi guys,

I was recommended to join this forum. I am a newbie to the property investment but very keen to start. I work in real estate (sales) but recently started. I've spoken to a mortgage broker and he told me that in order to get $300K loan I need at least earn $1K a week which I am not at the moment.
I have enough savings for the first deposit and stamp duty but would be interested whether there are other options to get finance before I get to the level of needed salary. I currently work 3 days a week with base salary $800 a fortnight.
Real estate looks very promising but I am at the stage of building my database and do expect to get to the $1K a week in 6 months time. Should I wait or there are options available?

Would appreciate you advice, please take into consideration that I am fairly new to the investment community.

Have a nice day.

Regards,
Nikolai

 

Good on you for trying to get in the game.

I honestly think you're better off focusing on kicking ass at work at the moment. When you're income is a bit higher and more stable you'll be able to buy all the properties you want.

 

Hi Nikolai,

That may not be true depending on your situation - if you're buying an investment you can count the rent in servicing so it would pay to get a second opinion.

Do you get any over time, extra hours etc?

 

I will be offered the full time position after Christmas, It is a matter of getting cash flow for the agency so that is why I cannot do overtime. I thought about other jobs to do, even considered becoming a taxi driver as I have 4 days a week available for this but wasn't sure. I can do a bit of software developing using Python.

 

Probably best to wait until you get the full time job then reassess - bits and pieces of random income won't be easily accepted unfortunately.

That's not to say don't get the extra work though - the additional cash you can save will be helpful regardless

 

@MadRussian you may have to wait until you have the full time job, but it doesn't mean its wasted time. If I were you, I would use this time to read, read and read. Learn as much as you can, Network with other successful investors. Get your team in place, ie brokers, accountant etc so when you are ready to invest you will be in a super position. Just my opinion.

 

Here's a quick overview of where lenders are coming from in terms of your affordability and income...

A part of what lenders consider when determining your living expenses. This is the amount needed to cover things like food, transport, the essentials. About the minimum lenders will accept for a single person is roughly $1100 per month. For most people the actual figure is significantly more.

Then you need to put a roof over your head, even if you rent with a group of friends you're probably looking at at least $700 per month. Many will argue that they live with family members which does reduce the above, but the question is raise about how sustainable is this lifestyle? You can't live under your parents roof forever.

In the lenders mind you need to clear at least $1800 per month (after tax) simply to live. $800 per fortnight is right at the tax free threshold but is only $1733 per month. This simply isn't enough money to clear the minimum costs of living, let alone make mortgage repayments.

Rental income from a proposed purchase is factored into the calculations, but lenders also need to factor in increasing interest rates and holding expenses such as management costs, vacancies and maintenance. As a result even a cash flow positive property can be a drain on your resources from a lenders perspective.

It's great to be interest in property investment, but $800/ft simply isn't enough to get into property if you need to borrow money. More income is needed. In the meantime it's a good opportunity to research and get to understand more about property investment.

 

Thanks a lot guys for your quick and thorough replies. I agree that I must focus more on my main job which means getting as many listings as possible. I work in one of the most wealthiest Sydney suburbs with $2M median sale price so it makes it a bit harder to get a listing especially with so many agents running around.

 

Hi Guys, I am recently changing from an hourly paid wage to a commissioned paid/contract work. It will require an gst registered abn number. Im not going to have my own sole trader business or anything but I am wondering how this will affect my serviceability and getting loans for investment properties. I have heard stories about people getting their own abn and having to wait for tax returns to be able to gain finance etc. I don't want to put myself in that position. Can anyone provide their expertise or experience.

Cheers guys!