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Discussion in 'Introductions' started by GThomo, 1st Jun, 2018.

  1. GThomo

    GThomo New Member

    Joined:
    1st Jun, 2018
    Posts:
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    Location:
    Brisbane
    Hi All,

    Gary here, new to the forum. There seems to be plenty of members and plenty of experience here, looking forward to sharing with you.

    I have a few investment properties, aiming to continue to grow. I am sure everyone is having the same issues with banks as I am at the moment. I am not on massive income. Personal debt is low, investment debt is high.

    Anyone got any good workarounds with lenders at the moment who are so tight with investment lending?

    GT
     
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  2. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    3rd Nov, 2013
    Posts:
    703
    Location:
    QLD
    welcome to InvestChat ,

    i am very much in the 'low debt camp ' this isn't trouble with that banks yet , when i bought my first property back in the mid 1970s the interest rate for a sub-prime loan was 17.5% ( they justified that on the basis of 'no credit history ' , not a bad credit history )

    i am not all that bitter as i watch that same empire now fight off bankruptcy ( in the global finance world ) nothing like a bit of karma , i say ( who would have thought a global lender would unravel in a world of low interest rates and 'easy finance ' )

    but sadly the only new thing in the Royal Commission is the bank lending practices are being aired in public .. they have been doing this crap for decades .

    you will have trouble with the banks when personal savings start to plummet ( banking relies on depositor trust ) , .. your bank manager doesn't lend you HIS money ( or even the bank's money ) he lends money under his custody left by depositor's . ... if there is nothing in the savings or term deposits to lend ...
     
  3. Hodor

    Hodor Well-Known Member

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    hodor
    Hi GT,

    Have you cancelled/lowered credit card limits? Banks assess CC's as maxed for serviceability.

    Planning with a good mortgage broker who is familiar with working with investors is important if you are looking to maximise your borrowing capacity. Selection of initial lenders, saving the more generous ones for later, is important.

    How much servicing are you away from getting another one over the line? Is your LVR all good?
     
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  4. GThomo

    GThomo New Member

    Joined:
    1st Jun, 2018
    Posts:
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    Location:
    Brisbane
    Thanks Hodor,

    That looks like our next step. LVR is solid, broker is saying it is all about the servicing, you know income vs debt.

    Right now they are saying, sit tight, keep reducing debt.

    I am just not a "sit tight" guy.

    GT
     
  5. twisted strategies

    twisted strategies Well-Known Member

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    3rd Nov, 2013
    Posts:
    703
    Location:
    QLD
    the market ( stock AND property markets ) feasts on impatient investors

    take care

    if not reducing your debt load .. how about stock-piling a little extra cash ( for a purchase a little further on )
     
  6. Hodor

    Hodor Well-Known Member

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    Location:
    hodor
    I find it a little backwards that people have to reduce debt to borrow more. It sounds like you plan (for right or wrong) rapid expansion and then move on to the next stage once an asset base is built. Why borrow to pay back and borrow again!? Not many options however, the only two sides of the equation are debt and income. So you have to balance it out somehow.

    We stopped after a few IPs and are focused on shares currently as the partner didn't want more debt. There are pros and cons to either. We didn't need to deal with serviceability to a large extent luckily.
     
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