Help with first property

Discussion in 'Loans & Mortgage Brokers' started by Johnny2Shoes, 21st Jul, 2017.

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  1. Johnny2Shoes

    Johnny2Shoes New Member

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    Hi everyone. I have a unique situation, I'll explain it first:
    - I inherited some money, about $400K
    - I want to get my foot in the property market
    - I want to buy a place in Brisbane that offers dual living so I live rent-free but also have an income from the property (me living downstairs for instance)
    - For this, a property in a good location (cap. growth) is around $500K+
    - I work several casual and temp jobs (~$800 p/w). I am working on university but it's a few years off til I work full time.

    Questions:
    1) Banks don't seem to want to lend to me (obviously) - what other options can you think of to get me 100-150K for a first IP?
    2) Should I start smaller, like a 300K house in the outskirts, bought outright?
    3) What would you do in my situation?

    If there's any input you have, I want to hear from you! What am I not seeing/thinking of?

    Cheers in advance
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Are you sure the banks won't lend to you? Who did you speak to?
     
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  3. Johnny2Shoes

    Johnny2Shoes New Member

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    I'm currently talking to Aussie (I don't know of their reputation), they apparently have 2 lenders who will look at my first payslip from this temp job I just started, which is about a week away. But it's just a temp job, then I'll be on to the next temp/casual/part time job I can find...
     
  4. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Oh right - I was under the impression you had lots of jobs at the same time. A temp job while at uni will make things difficult if it has a defined end and it's quite close - for eg 3 months. Casual is fine though, after 3 months in the job and part time is perfect.
     
  5. Johnny2Shoes

    Johnny2Shoes New Member

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    I do have 3 jobs;
    1) Casual (5K a year) for 2 years now
    2) Casual (3K a year) for 1 year
    3) Temp ( 2500 a month) 6 weeks to go (small chance of it staying on)

    But good to know about the casual jobs, thanks :)
     
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  6. Corey Batt

    Corey Batt Well-Known Member

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    Income's a bit shaky - it might be worth waiting until you have more stable income and or until you've finished uni. There's no point rushing in and getting yourself into potential financial hardship whilst you're trying to study. There will still be property there for you in the future when you're working after uni.

    Meanwhile you can put your cash funds into the bank/other assets until you're ready.

    I wouldnt bother buying a subpar property in the meantime just to buy something - when you can wait an extremely short period of time of your life and then have a huge swath of options. Buying/selling costs are significant, best to make the right moves in the right time.
     
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  7. Redom

    Redom Mortgage Broker Business Plus Member

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    Overall thoughts:
    - good idea to generate additional income - always a good starting point for young Aussies looking to grow over time.
    - property is a long term investment, not necessary to adjust parameters to asset selection for something you may own for the next decade based on a short timing gap on your income verification.
    - some lenders allow casual employment after 3 months - so it may not be too long before the income can be used. Could be worth sticking to your original target & waiting a couple months.
    - may be worth educating yourself on bank income policy and tweaking your casual jobs around it. E.g. potentially taking a part time contract or working one casual role for 3 months.
     
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  8. Hamish Blair

    Hamish Blair Well-Known Member

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    What about commercial with residential upstairs? Yield on a shop might be enough to service debt?
     
  9. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

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    You have $400k in cash.... therefore another option is to buy something that does not require finance. So something in the low to mid $300ks. Rent it out for a while, and when your income is sufficient to access some borrowings, release some equity and get cracking with IP #2...
     
    Last edited: 23rd Jul, 2017
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  10. Johnny2Shoes

    Johnny2Shoes New Member

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    ^ This is what I've been thinking a lot lately. Seems like an idea. (On top of increasing my income, etc).
     
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  11. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Make sure you get tax advice.

    No point buying something for the sake of buying. 400k will take you further when you can borrow
     
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  12. Corey Batt

    Corey Batt Well-Known Member

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    That's my thoughts. Waiting until they're in a position to make a well selected PPOR purchase when the time comes and then drawing from that low geared property will allow them to have a more effectively structured portfolio, low personal debt which will allow them to borrow more for longer.
     
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