In a dire situation - Mining town collapse

Discussion in 'Loans & Mortgage Brokers' started by styereye, 29th Jun, 2017.

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  1. TMNT

    TMNT Well-Known Member

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    many a lifetime ago, i too went almost went bankrupt, but I didnt, only because I didnt know much about it,
    it taught me to be a lot more cautious, even though Ive taken huge risks since then

    I see stories like your bransons, trumps, bond, who have been bankrupt before (multiple times) and wonder to myself, maybe you need to be ruthless, play with others money and not be scared of bankruptcy
     
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  2. PandS

    PandS Well-Known Member

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    Bond Go to jail for fraud
    Also bankruptcy law in the US are Very lax compared to the one in Australia, over there they encourage innovator and inventor to have a go and they help you start again if thing don't work out ... not encourage people to get rich quick by flipping properties there is no added value to the economy for speculators.
     
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  3. TMNT

    TMNT Well-Known Member

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    maybe im the only one, but to me thats completely hindsight, I find comparing is like apples and oranges,
    a city apartment in docklands (a nice one) can sell for $1m, compared to a house in teh west, you can get 2

    you can argue both sides that one is good location, the other has land componet,

    im sure there are many examples that comparing two completely different and far apart cities or areas vs price where it doenst make sense
     
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  4. Big Will

    Big Will Well-Known Member

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    A town with a population of about 5,000 having a higher median price then cities with population in the millions or 3.7M for Melbourne or 3.9M for Sydney (all 2011 Census information) this really doesn't add up to why it would make a good investment decision to purchase in Newman.

    The yield in Newman would of likely been positive as well so like they say to good to be true it really is to good to be true.

    The OP took a gamble with hundreds and lost badly, I recently took a gamble at 700k and yes price may drop 50% in a year which is unlikely as prices have been the same way for years but at he same time it probably won't grow by 50% in a year either. It may drop by 10% in a year doubtful but there is a stronger chance of it growing by 10%.

    This place bought has a population of 1.8M which although it is higher than we were orinally going to purchase it does have 1,600m2 which block sizes of 400m2 with no house in same suburb on major roads are selling for $400,000 so pretty much $1,000/m2. So I could calculate the land as 1.6M if I subdivide but we will develop in the future.

    This took 12 months from starting to serious look at buying and a further 10+ years of prior research/education and isn't my first property I have bought and have sold many properties.
     
  5. Marg4000

    Marg4000 Well-Known Member

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    For everyone who lost heaps in mining towns there is a person who made a huge profit. Someone was selling those highly priced properties others were buying.

    I know someone who made a lot of money out of Gladstone. Blind good luck. Transferred there and bought at the right time, transferred out and sold just before the peak. Property more than doubled in 3-4 years.....
    Marg
     
  6. Foxy Moron

    Foxy Moron Well-Known Member

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    Great comment @PandS. We aussies love to elevate ourselves to genius status on an undeserved basis – simply cos we own stuff in a city where people from the world want to come and live for a thousand different reasons.
    Love to see us stop counting money and wonder how we are going to keep out economy strong on the back of our real efforts rather than lazy dollars when the music stops. Otherwise our property investors may start to replicate the recent woes of our rugby and cricket stars Lol.

    On a more serious note I say a big congratulations to the OP for asking for help in dealing with a problem that would mentally sink a lot of people. If more people had this courageous attitude we would see a lot less occurrences of serious depression issues - particularly for drought affected farmers and failed small business owners etc. And I’m loving the genuine positive comments of everyone contributing to this thread. :)
     
  7. WattleIdo

    WattleIdo midas touch

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    Beautiful avatar!
     
  8. Foxy Moron

    Foxy Moron Well-Known Member

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    Cheers Wattle. Yes he's a cracker. The pin-up stallion of the Australian racing industry.
     
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  9. styereye

    styereye Well-Known Member

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    Thanks. I will be heading to see a bankruptcy lawyer very soon. I have spoken to a financial counsellor but she wasn't 100% sure on a few questions I have.

    Everyone here has been a great help, I do really appreciate the time taken to read and reply.
     
  10. styereye

    styereye Well-Known Member

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    I have spoken to the bank Friday and they have told me once the property goes unconditional they will send off to the LMI for approval for the shortfall so they will definitely be making the claim and it will be up to the LMI - QBE to follow up with me which I'm pretty certain they will. I don't know how long this will take. I'm inclined to contact them once settlement goes through - like you say they could leave it 6 - 12 months and it just drags it all out for longer
     
  11. Gockie

    Gockie Life is good ☺️ Premium Member

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    Best of luck @styereye. I wish you the best in atracting a buyer. xxx
     
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  12. styereye

    styereye Well-Known Member

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    Thanks so much :)
     
  13. Terry_w

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

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    What do you mean by settlement here?
     
  14. styereye

    styereye Well-Known Member

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    Once the house is sold and it settles the shortfall will then be payable by myself. That's when I will contact QBE.
     
  15. Terry_w

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

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    You probably can't sell it. The bank won't release the mortgage unless you pay out the loan.

    You would have to negotiate this well in advance, but I can't imagine them allowing it very easily.

    Maybe you just have to abandon the payments, and let them take possession or just put yourself in bankruptcy and then let the trustee in bankruptcy take over.
     
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  16. Vanillascent

    Vanillascent Well-Known Member

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    I actually assisted with an article on Bankruptcy and the "fresh start" it supposedly provides. I did a whole lot of research on what professions it may impact. I highly recommend reading the article below which should discuss some of them. If nothing else it may give you an idea of how you may be impacted going forward. It has a legal focus but I think should be be able to give you some idea.

    Howell, Nicola; Mason, Rosalind --- "Reinforcing Stigma or Delivering a Fresh Start: Bankruptcy and Future Engagement in the Workforce" [2015] UNSWLawJl 58; (2015) 38(4) University of New South Wales Law Journal 1529

    Hope it helps!
     
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  17. Terry_w

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

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    It seems the bank may allow a settlement. see this other thread.
    Update on our Gladstone situation

    i suppose if the bank knows the property is only worht so much it is not like they will be able to sell if for anymore than you can.
     
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  18. highlighter

    highlighter Well-Known Member

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    I wouldn't wait for that if you think bankruptcy is a certainty, it could take years if it happens at all, which could cost you thousands in the meantime, and would also be time you could otherwise spend discharging a bankruptcy.

    If it's going to happen, the sooner it does, the sooner you're in the clear. There are 90 properties on the market in Newman alone, and one has sold in a month, and the median asking price seems to be around $100,000-$200,000. There are three bedders going for as low as $90,000. Even if you wait till it sells, you'll still have a massive shortfall, and it's probably not in your best interests to spend decades paying off a dud asset if you can cover that shortfall.
     
  19. Ted Varrick

    Ted Varrick Well-Known Member

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    Remember @styereye , all these guys do is rent money.

    Maybe you can approach another financial institution and get them to lend you $210k, which you offer to the current guys.

    Remember that:-

    1. Your arrears are not their money, and

    2. It needs to get off their books, and

    3. They probably have some annual leave accrued which is a higher priority, and

    4. They actually don't care that much...

    Offer them half or nothing.

    See how it goes.

    If you thought that bankruptcy was the only option, then what's not to like?

    And, if you really don't like them, after they have accepted, put in another loan application and roll the dice on a refinance of your $210k...
     
  20. styereye

    styereye Well-Known Member

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    So if I do decide to declare bankruptcy (which it is looking like I probably will) do I have to wait until the house sells or can I do it anytime? I.e tomorrow if I wanted to?
     

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