Join Australia's most dynamic and respected property investment community

MB's - hypothetical

Discussion in 'Commercial Property' started by Bayview, 22nd Dec, 2015.

  1. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    2,716
    Location:
    Mornington Peninsula
    Question for the learned MB's of this forum;

    Purchase price of a Comm piece of r/e - $1.6m.

    In today's lending environment, what is going to be the likely maximum of lend on it?
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,773
    Location:
    Perth WA
  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,100
    Location:
    Melbourne, Nationwide
    Might be possible to squeeze up to 80%, but you'll probably have to resign yourself to 70%.
     
  4. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    2,716
    Location:
    Mornington Peninsula
    Thanks guys.
     
  5. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker

    Joined:
    18th Jun, 2015
    Posts:
    641
    Location:
    Sydney
  6. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    2,716
    Location:
    Mornington Peninsula
    Thanks for that Shahin.

    I crunched the numbers based on the loan amount I'd need, and I'm about $400k short with my part of the funds required, so it's a non-starter for me.

    It's a mechanical workshop and service station - the servo part is leased to United, and the workshop part was owned and operated by the Vendor for several decades.

    He has closed the business down and retired, but it was running well into the $1.5mill+ range per year...couldn't sell it, so closed down...bit of a story behind this, but the bottomline is a terrific business has disappeared, and would not take a lot to resurrect it for basically the cost of the machinery and equipment...

    The purchase price of $1.6m included all the machinery and equipment in the workshop, plus the property itself. If the workshop was rented, it would return $50k per year, plus the $66k per year from United.

    MY idea was to possibly start up the workshop again, as an add-on to my existing workshop, or lease it to another mechanic to run and have no headaches but a lot less income as a result.
     
  7. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    75% isn't that hard for a good security.

    Being a petrol station is definitely not going to help, that'll reduce the LVR and some lenders will just flat out refuse to lend against them.