Need advice on getting 2nd Investment property

Discussion in 'Loans & Mortgage Brokers' started by Seby643, 9th Feb, 2017.

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  1. Seby643

    Seby643 Well-Known Member

    Joined:
    28th Jan, 2017
    Posts:
    80
    Location:
    Melbourne
    Hi guys

    I'm still very new to investing and would like your advice on what I should do here to get a 2nd investment property this year.

    So I bought a block of land in Tarneit in January 2016. Settlement will be happening next month and building shortly after ( 3 bedroom house). My land and building total was $345k. I have an interest only loan of $305k for it though. I have all the funds ready for settlement and construction put away in a seperate account. In another account I have 10k that will be going towards a 2nd property. I've noticed on real estate.com that the median price for a 3 bedroom house in Tarneit is $404k at the moment.

    For my 2nd investment property I was planning on buying an established property for $260k or under. If i was to have the stamp duty and LMI in savings, would I be able to use the equity in my Tarneit property as my 10% deposit (once it is built) to get another interest only loan for the 2nd investment property? (Provided of course prices kept rising)

    Can equity be used this way?

    Also assuming my Tarneit property was valued at $404k once it was built, would it mean i would have access to 80% of $99,000

    $404k - $305k (interest only loan)
    =$99k

    I apologise if my post sounds confusing. Looking forward to getting some straight answers
    Thanks :)
     
  2. dabbler

    dabbler Well-Known Member

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    Yes, you can get a loan secured by any equity, the exact amount will come down to what the lenders valuation comes in at & all of this is provided you can service the loans.

    You need to speak with a broker once your other place is done. You cannot do anything until it is complete.

    As to whether it is a good idea etc, that part is up to you to work out.
     
  3. mikey7

    mikey7 Well-Known Member

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    Location:
    Sydney, Brisbane
    Unfortunately you have got your calculations wrong.

    If you're going off 80%, then the calculation is as follows:

    House Value ($404k) x 80% = $323.2k
    Then
    $323.2k - loan ($305k) = $18.2k equity available.
     
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  4. Seby643

    Seby643 Well-Known Member

    Joined:
    28th Jan, 2017
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    Location:
    Melbourne
    Ok thanks for the info I understand now. Because there is not much equity would it be best for me to just save everything (lmi stampduty, other fees and deposit) even though it will take me till next year to have those funds in my saving?
     
  5. mikey7

    mikey7 Well-Known Member

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    You'd be best off contacting a broker on here once your house is complete. They will be able to help you through it and determine exactly where you stand at the time.
     
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