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Company/Trust Construction Loans

Discussion in 'Property Finance' started by Connor, 28th Mar, 2016.

  1. Connor

    Connor Well-Known Member

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    Hey guys,

    Just wondering if any of the brokers on PC have access to RAMS, or would i need to go direct? I've always used brokers in the past as I have found their experience with preparing and presenting the loan apps vital to having things run smoothly.
    RAMS seem to have a good low doc product which i'll most likely need for my latest development.

    My structure is alittle complicated but certainly not unique.

    Self employed since 2008 although current company been operating since 2012.
    Separate company/trust owning this project only 8 months old, although I did get a full doc bank loan to purchase based off my self employment financials.

    Current financials not yet ready and accountant is looking at tax minimisation strategies hence I'm looking at a low doc company/trust construction loan.
     
  2. Blacky

    Blacky Well-Known Member

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    A few questions
    Does the entity you are constructing/developing in do anything or own anything other than this development?
    What size is the development (number of houses/units?).
    Can you service the loan from income (in other entities?).
    Why RAMS?

    Blacky
     
  3. D.T.

    D.T. Adelaide Property Manager Business Member

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    Hey Connor

    @Corey Batt recently set my construction loan up for my recently completed development. The trust that owned the project was brand newly created and wasn't an issue at all.
     
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  4. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    RAMS is an excellent lender but not available on broker panels. You will need to liaise with RMAS directly but make sure you pick a good franchise/broker that knows their niches and policies inside out.

    Why RAMS? Here are some reasons:

    1. They do 4 unit construction on resi terms - they even do 5 unit construction on a case by case basis. This is an incredible niche. No other lender does 5 unit construction and only very few do 4 (most of which are crappy lenders).

    2. They have an excellent lo doc product - accountant's sign off with no other documentation required product LVR is 80% and loan amount is under $750k. If its above $750k then you need 4 BAS Statements.

    3. High LVR loans on owner occupied lending
     
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  5. Elives

    Elives Well-Known Member

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    does LMI apply over 60% for low doc loans?
     
  6. Connor

    Connor Well-Known Member

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    Thanks for the replies guys, yeah I hadn't heard of any brokers dealing with RAMS, and ideally I'd prefer to go through an experienced broker to ensure my application is presented properly first go.
    Unfortunately the days of providing 2 payslips are well and truly gone for me.
     
  7. Connor

    Connor Well-Known Member

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    Hi Blacky

    No all the entity does is hold this particular property. It's a corner block, retain and build behind so I've been receiving rent since purchase and this will continue throughout the build. The rent covers the current loan. But I think I'll need to refinance the entire loan to allow for funds for a build.
    Was looking at RAMS as I think there product would suit, where as current lender doesn't do construction loans for Trusts.
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Brokers can use RAMS by going through the franchise as an intermediary.
     
  9. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Some lenders do lo doc at 80% no LMI including RAMS.

    There are a few people here who use the same franchise @ RAMS - the lady there is excellent.
     
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  10. kr11

    kr11 Well-Known Member

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    How is their servicing calculator at present?
    R they an option for later on in a portfolio
    Many thanks
     
  11. York

    York Finance Broker Business Member

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    I believe @MTR has used RAMS and was quite happy with their low doc product for development. Also I think @sash has used RAMS free recently. Maybe they can comment...:)
     
  12. MTR

    MTR Well-Known Member Premium Member

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    Very happy as an interim measure, but you still need to meet criteria, letter signed off by your accountant, declaration of income by your accountant.
     
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  13. sash

    sash Well-Known Member

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    I use RAMs...they are very quick for approvals but you have to chase for the final paperwork.

    I use full doc loans....have not issues to date doing 90% plus LMI capitalised. Just bought another one in Clontarf and have unconditional now chasing final paperwork.
     
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  14. Connor

    Connor Well-Known Member

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    Ok great!
    Thanks again for all replies, i have no problem having my accountant delclaring my income or providing proof with bank statements.
    It's was mainly the construction and entity structure I was concerned about, and it looks like RAMS should be sufficient.
     
  15. Marty McDonald

    Marty McDonald Mortgage broker

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    I refer some clients to a particular Rams franchise for low docs and more recently investors maxed out through my channels. I've heard they have since tightened servicing so that niche has passed.
     
  16. tobe

    tobe Well-Known Member

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    Rams now do up to 1mil total debt with an accountants letter, 2 years abn and gst reg. Rates are pretty sharp for low doc, one of the few to do fixed low doc rates. No LMI.

    They do up to 70% cashout. Between 70 and 80% they need proof of funds, purchase, build plans etc.

    full doc, 95plus LMI for OO lending, 95 inclusive for investors and construction loans.

    Serviceability calculator is middle of the road, they load other debts like NAB but harsher.
     
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  17. kr11

    kr11 Well-Known Member

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    Their variable rates for low doc are listed as 5.75%
    Does that mean we can negotiate rate at 80%lvr
    Thanks
     
  18. Connor

    Connor Well-Known Member

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    Do you know how long you need to be GST registered before you qualify? I've been GST registered since 2012 but my accountant unregistered me in Aug 2015 and registered me again when I hit 75k threshold recently. This could potentially be a problem.
     
  19. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You can't go saying you are earning over $75k when you are not registered for GST - because you must register when your turn over exceeds $75k.
     
  20. Connor

    Connor Well-Known Member

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    Yeah he registered me again for GST once my turnover hit $75k in January. Between Aug and Dec I was not registered hence was not collecting or claiming GST. This I assume simplified paperwork (for him) but I don't think there was any real benefit for me. Now I'll have to deal with a lender asking why I have only recently registered and claiming an over $75k income. When in fact I had been registered since 2012 and only had that few months break.