How to get funding of 2million approved?

Hey guys and gals. I would like to pick your brains abit here

Here is the breakdown

I currently have

Property 1: 3 bedroom House in Truganina, Melb valued at $420,000 with $300,000 owing, Rented out for $1500 per month

Property 2: Untitled land in Rockbank, purchased at $240,000 with $24,000 deposit (10 percent), same blocks now going for $280,000, due to title March 2019

Father

Dad has an investment property he owns outright valued at $500,000 he is willing to put up as guarantor

What I want to do

Get a $2 million dollar loan to be able to

1. Build on Rockbank land for $450,000 (inclusive of land)
2. Refinance Truganina home of $300,000 (to access equity)
2. Purchase established property in Hoppers crossing for 1million (would be rented out for around $450 per week
3. Get $150,000 cash out for another project

Brokers, finance experts, fellow investors.. What do you reckon?

What type of income (accounting for rental income etc) would be needed for this type of loan?

How would guarantor setup work?

Would I neeed any further cash deposit or would equity be enough?

Any input is appreciated

 

Hi and welcome to the forums

You're coming at it a bit wrong - rather than 'get a $2M loan', you'd be better off to go through each thing individually and fund them seperately so they're all standing on their merits. In theory, you could chuck it all in the same pot and borrow $2M, but that's an incredibly messy way to do it.

There's lots of great brokers on the forums here - given there's a few things you hope to achieve, your best bet would be to speak with one directly to make a plan of attack. Without knowing a lot more about your circumstances, it's impossible to tell if it's going to work or not.

 

Are you sure about the 1million purchase in Hoppers Crossing this late in the cycle?

 

You are right,
Would make sense approaching it one by one.
I just wanted to know whether or not the actual idea is feasible, that is, without me putting down cash deposit

 

Absolutely,

With block size of 1500m2 plus

It would make sense to hold and plan what to do with it in future

Where would you consider better for a buy and hold with plan for subdivision?

 

Income wise I’ve mentioned the rental income for my property.

What other income?

If it’s my income then I wouldn’t be able to afford it at this stage. I want to know how much income I would need to have to be able to service

 

My emphasis was on "this late in the cycle". Many consider Melbourne to be peaking, It's in a similar stage to Sydney about 1.5 years ago.

 

Seek specific advice

 

If you have no income personally, it won't be happening - those yields are low, and rents get shaded to 70-80% depending on lender.

 

To service a $2m loan you need at least a NET monthly income of $10K as a minimum plus your monthly living expenses.

 

no income ( salary, wages, bonus.....), minimum chance of getting a loan.

 

I reckon you must be young.

 

When’s the land you have left a deposit on due to title? I’d concentrate on settling that first. I’d suggest getting a build contract and settling both together.
Lending has changed. Start getting it sorted now. You only have two weeks notice once the titles are ready and you don’t want to deal with the stress of a recsission notice.

 

1mil in Hoppers at this stage is too risky even with 1500+sqm. You need to factor in town planning, infrastructure, subdivision, holding costs, etc. It will bring everything up to 1.15-1.2mil. Depending in zoning (GRZ or NGZ) there is minimum garden/pos requirement. Let say you knock down everything to get a vacant land, subdivide into 5 lots 300sqm each. The average cost per lot is $240k. Similar size lots are selling for similar amount of money (or slightly higher) in Tarneit, WV, Point Cook, Werribee. Can you compete? What is the profit? Let say you want to build, can you get finance for a multiple dwellings project (more than 3 it cannot be assessed as residential anymore if I am not wrong). Build cost in existing estate is more expensive in new estates. So in short, I do not see the required profit to make the investment worthwhile.