What would be the best lender for this scenario? Happy to use a broker as well if needed

Hi All. My Purchase Scenario & Numbers below. Can I buy all 3 in my situation? Happy to go lower than 80%LV if that. If I can buy all 3 who would be the best lender who is the most generous serviceability wise for 1yr tax return? Thanks




Bought All untitled land for eventual investment property builds. All subject to finance. However, I'm focused on buying the land first then sorting out the build contracts with my builder after I've settled and have the serviceability in the future. Just focused on the land purchases for now



Purchase Scenario (all of these to the title in March-May 2022).
All are relatively flat residential land zoned for building.
Land 1 - 2100m2 , 3722 postcode, $326k purchase price. Deposited 5% until title and settlement.
Land 2 - 700m2 , 3500 postcode , $159k purchase price. Deposited 5% until title and settlement.
Land 3 - 810m2, 3500 postcode, $174k purchase price. Deposited 5% until title and settlement.



Money in account available toward contribution (on top of the 5% deposits already paid) :
Currently: $200,000 on top of the 5% already deposit in . $140k is in offset. $60k in shares.
I will have obviously more in March 2022. $30-50k+ more at least.

Income:
Sole trader, work in the photography industry
- FY20-21 Income $98k net ordinary pre-tax income Looking for a bank that'll look at 1yr FY20-21 tax return as my FY19-20 tax return is low net income (i think about 49k).


Assets:
- Current PPR $650-720K 4bd 2bth 2 car OO house on 802m2. $375k mortgage, 2.8% OO w/CBA. Happy to refinance/cross-collatarize on this for more contribution $$$ if that helps at all.
- $6,500 car
- $24,000 business equipment

Monthly expenses on top of mortgage:
$1200-1800.



Debts:
Nothing, beside the mortgage.
No credit cards or other debt facility.

Repayment/Credit History:
Perfect , never single late repayment, debt, overdue notice etc.





Thanks all If i cant buy all 3 I will be focused on buying Land 1 & 2. Just looking for the best broker to go with and/or the best bank to go with that can accommodate or has the highest serviceability for me.

 

Morning @Rolf Latham Thanks for your fast reply. My replies to you below in blue.

Cross wont help you
Mouldy oldy
To cross or not

Thank you, bugger, but thought so as well. Article you linked makes complete sense thanks.


Major things I can see

Servicing with vacant land - no neg gearing on serv calcs
A few lenders will take most recent tax rtns including your existing lender
You will need a huge income increase to be able to fund the builds...........might be sitting on the land with no income or gearing for a long while

You're completely right and I'm happy to be sitting on the land and take on that risk until my serviceability is at the point where I can build. Few reasons

1) 21-22 Net taxable income is going to be far higher allowing serviceability for at least 1-2 builds even after the 3 land purchases, in addition the increased money in savings that can be contributed so each build can still be 80% LVR.

Whats the exit strategy ?

1. Sell house one currently in with the ppr exemption and use that money toward land 2 build 2 and live with friends/family during the build of land 2 build 2.

2. Live in land 2 build 2 with my PPR exemption & then build on land 3 & 4 when time comes which would be later in the 2022 or even 2023 year. Happy to hold onto land until then.

3. Sell or rent out Land&build3 & land&build4 when built. Sell land2property2 PPR when time comes to it and I want to do the next build or purchase


ta
rolf
Thanks Rolf. Know my servicing going to be tight for the 3 land so happy to just get the first 2 land and miss out or onsell the 3rd plot of land.

 

Your total non tax deductible debt will be around $1.034m based on your income, DTI is hitting around 10 based on your latest FY which I haven't seen a lender go that high.

 

Thanks @Tony Xia would it help the situation (as I'm still in process of doing FY20-21 tax return with accountant) if i wrote off less one time expenses on my income tax for this year and my net taxable income was around $107k of ordinary abn self employed income net, pre tax? and my contributions for each piece of land were higher than 20%?

 

Really depends on the calculations. You need someone to run the numbers for you to confirm what income you need to obtain those loans.

In additional CBA will drill down on your property expenses via your tax returns and pretty much use ALL expenses noted on their which could also being down your borrowing capacity as you will be holding 4 properties, its a change they made a few months ago.