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How to create "No Money Down" on this deal.

Discussion in 'Innovative Techniques' started by Melbpositivegeared, 29th Feb, 2016.

  1. Melbpositivegeared

    Melbpositivegeared Well-Known Member

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    Hi guys,

    I have come across 8 units. They have already been strata titled. I am able to get a discount of 20% for buying them in bulk.

    Each unit is worth $200K and the whole deal comes to $1,600,000 if purchased separately.

    I can get them for $1,300,000 if I buy them all together. Provided I have them valued separately they still stack up to $1,600,000. (Confirmed by valuation I've had done)

    The banks however, will not lend based on valuation if it is higher than purchase price. So in the banks eyes this is only worth $1,300,000.

    Is there any bank that will see the valuation instead of purchase price? Does anyone have any ideas on how I could use the equity already in the deal in place of needing a cash deposit? (I'm quite aware I need stamps and closing costs etc)
     
    Kate Moloney likes this.
  2. pinkboy

    pinkboy Well-Known Member Premium Member

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    You're probably going to get the same answers by the same people as a couple of weeks ago when you asked an almost identical scenario.

    Refer back to those advices.

    pinkboy
     
    ej89, No Probs, CU@THETOP and 5 others like this.
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Go for a private lender andbthen refinance after settlement. Unlikely they will value up higher though.
     
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  4. D.T.

    D.T. Adelaide Property Manager Business Member

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    Will you be my private lender terry?
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    No. But richard taylor ofnthe forum might - where the deal fits
     
  6. teetotal

    teetotal Well-Known Member

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    Refer to this thread
    No money down - Buying at 80% of valuation
     
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  7. jaybean

    jaybean Well-Known Member

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    Yeah haven't you created two other threads with almost the same question?
     
  8. Truly Exotic

    Truly Exotic Well-Known Member

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    In my experience the contract price is pretty much 99% of the time the new market price unless there are extreme circumstance
     
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  9. tobe

    tobe Well-Known Member

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    @Melbpositivegeared try a new thread named, "finders fee wanted for positive cashflow deal". You might be able to make a little money out of this deal selling it to another forum member.

    I cant see how you can make the deal work with your current circumstances, and it seems most of the others commenting on these posts think the same. Best of luck.
     
    pinkboy likes this.
  10. Melbpositivegeared

    Melbpositivegeared Well-Known Member

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    Thanks Tobe.
    This particular one ok holding on to and will do with a JV partner of I can't seek finance (I've managed to get it on similar deals- the rules are a fair bit tighter now though!). Keen to look at that thread however for others I come across
     
  11. Melbpositivegeared

    Melbpositivegeared Well-Known Member

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    What defines extreme corcumstamces? I've had it work 6 months ago on a 2 year settlement...

    Just trying to figure out if there's any way I can keep it myself before splitting profits with a money partner
     
  12. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    If the settlement is more than 12 months away they may lend based on valuation.
     
  13. Truly Exotic

    Truly Exotic Well-Known Member

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    A few examples

    Family transfer so they put a high price to avoid stamp duty
    Divorce sale so price could be really high or low
    Mental illness
    Some conspiracy
     
  14. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    How does this work?
     
  15. Truly Exotic

    Truly Exotic Well-Known Member

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    Oops typo.
     
  16. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Even a low price would not save duty as it would be assessed at market value.
     
  17. MoneyMan

    MoneyMan Active Member

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    Hey Terry, Does there have to be a certain dollar figure for the property ie: over $1M?

    And would this only be for private vendors?
     
  18. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    No. Most of the majors have this property - which is mainly used for off the plan property. So get some advice before entering into a contract.
     
  19. Aaron Sice

    Aaron Sice Well-Known Member

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    I don't understand.

    Market value is the last price paid for comparable product.

    You are setting your own market value.

    If you were buying 8 dwellings on one title at 70% of the value of 8 dwellings on separate titles then you could have a case...for value add (hence the discount).

    Otherwise you shoot yourself in the foot.
     
    Terry_w likes this.