NZ Over the ditch 10pc + NET YEILDS

I have found @Beano only to happy to provide further information and answer questions in PM. He even gave me his personal mobile number if I wished to discuss further.

I have no doubt he is the investor he says he is. Further I don't see what someone would gain from lying though I'm sure a few keyboard warriors have from time to time.

 

Same Nice guy and no BS
I have the trolls on ignore, not interested whatsoever, do the same.

I prefer to Learn from successful people like Beano who are happy to share

MTR

 

Awesome post. As your PPOR is also encumbered, do you mind sharing what LVR they are prepared to go to with this type of facility. I imagine up to about 65%??

 

Hi chindonly

On this one i borrowed 100% of purchase price. Bank allows a 70% LVR so i needed to provide an additional $316k of security which they got from holding the title to my PPOR.

For ease of example lets say the PPOR is worth $2M on the bank Val and i own it outright, i can use 70% of that figure as security on commercial purchases allowing me to borrow 100% of purchase price for new acquisitions. Its cross-securitised, cross-collaterised basically the bank has me trussed up like a chook. At various seminars i have been to they say don't do it, as there is risk but i have a good business and other unencumbered assets that can be cashed up in an emergency so feel comfortable i could ride out most disasters.

hope that answer helps

 

Thats great to hear from a third party - I am sure we would all be happy to learn from Beano

 

Did you consider using a line of credit fot the 30%+? It may have cost a few extra $ intetest in the short term but lowers the risk substantially (if through a second bank).

 

Hi SNM

Yes it's possible and I have used a "line of credit" type account against the PPOR but gets messy when using the one LOC for multiple investments ... If you get a new account for each separate use would work best I think, and if the bank would allow it

 

It's a CBA product Market Rate Loan. Made up of 3 components from memory(I'm in the states and no access to my paperwork)
BBSY about 1.77% (resets every 3 months based current rate)
Interest rate about 2.2%
Liquidity fee .1%
And then a quarterly roll over fee of $150

 

How do commercial loans work? Am I correct you don't need to service the debt its about the deal stacking up cash flow covering debt and the lease ????

 

Yes, as long as there's at least 12 months left on lease and you have a sizable deposit. @Corey Batt is best to talk to in this space.

 

You always have to service the debt otherwise it continues to grow ie capitalisation of costs and interest. As @Whiteman is using a 90 day BBY @ a low interest rate + risk he pays the interest upfront IIRC. So if he buys a $1m bill, he pays about $10,000 (assuming he's paying 4% pa on a 3 month rollover).

 

There's a number of options - full and low docs which are the same calculation methods as residential products etc. The good thing with commercial is there are some very relaxed low doc product + lease doc products which look solely at the security for servicing - which for the most part is very simple with commercial property at 65-75% LVR. I wrote about the different types and expanded on lease docs a while ago here: Lease Doc Commercial - Or How I learned to love Lease doc to continue investing

 

Actually I did read that some time ago now, I will go through again.
Thanks

 

Hey Man,
Interesting read, how has this performed?