How to access Equity from a commercial property?

Discussion in 'Loans & Mortgage Brokers' started by Blackbox, 3rd Apr, 2022.

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  1. Blackbox

    Blackbox Member

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    Hi All,
    I have only just begun my Investment journey by closing on a single dwelling in regional NSW, it is currently being renovated - yet to be tenanted.
    I also own a PPOR which has no equity,

    But my first purchase was a commercial space in my rural town, i put it through a renovation and own it freehold, I would estimate the value at $150K - $200K
    What is the best way to access this equity to use as a deposit on future investment residential properties? - I'm not even sure what type of loan product to inquire about,
    From what i can find the amount of equity falls below alot of the minimums in the commercial space
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Which is it? Residential or Commercial?
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    max 60 to 70 % Loan to value ratio for comm in country town, but will depend on a bunch of other things. Not as simple or reliable outcomes as for resi equity pulls.

    And the actual min loan amount may be a challenge as well.

    May be one of those very very rare times where cross collateralisation may be beneficial if there is no other way to access the equity as a stand alone app.

    ta
    rolf
     
    Last edited: 4th Apr, 2022
  4. Beano

    Beano Well-Known Member

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    Do you mean unencumbered when you say freehold?
     
  5. Blackbox

    Blackbox Member

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    My post may seem contradictory but the property in question is a commercial property.

    Its not clear to me what type of loan i should be applying for? Commercial loans look like they are to purchase the building - which i already have, it also doesn't really fit a business loan. Since it is a relatively small amount of money makes it difficult too.

    Yes it is unencumbered
     
  6. Blackbox

    Blackbox Member

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    Bump Bump -
    Can somebody tell me what type of loan product suits what i want to do? (Eg commercial loan? Business loan?)
    Or put my onto a Broker that deals with this type of thing.

    Thanks.
     
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If the security is commercial then a commercial loan