Best Way Out of a Bad Situation? Guidance please.

[lamborgini]

Thanks Gary, Flatbush is our own home owing 519k and valuation around 600k and we live there. property next door in an auction was being bid for 650k so i dont know why valuer gave us 600k. probably wont use him again. Do you know a good valuer in Flatbush area ? I'l check with our broker if he can suggest something on BNZ side.
As a plan B if nothing works i thought if we could sell our house and if it sells for 650k it gives us app 100k after commission and all. we settle the 41k loss and use the 60k to buy an IP and we go renting.
Flipside is we dont really want to sell our flatbush property bcoz its a capital growth area. unsure but this can potentially be a bad idea.
what are your thoughts.
Thanks !

[PTILoveYou]

Yeah I would try keep the flatbush home.

You could try Don Seagar 021 622 200, but best to get BNZ agreed to the new finance before committing to a valuation.

[speights boy]

lambo; what's the rush ?

You own a home you seem to like, in a growth area.
You have high income, but low equity.
Sit on you hands re buying for a year, and pile your weekly savings into paying down debt.

Hopefully in 12 months time you'll have a lot more equity in order to make a smart IP buying decision.

[lamborgini]

lambo; what's the rush ?

You own a home you seem to like, in a growth area.
You have high income, but low equity.
Sit on you hands re buying for a year, and pile your weekly savings into paying down debt.

Hopefully in 12 months time you'll have a lot more equity in order to make a smart IP buying decision.

you are right but i am too keen to start on IP ladder as quickly as i can because this is something i ahve wanted to do for a while but i wasn't able to because of tokoroa property. not rushing to buy a property but in my mind there is an urgency to make a start.

[lamborgini]

Thanks Gary. Cheers mate !!

[Wayne]

How about you rent out your Flatbush home and rent elsewhere?
Sell the property to your company or trust (whatever structure you decide on) and then claim all the normal tax expenses.

[lamborgini]

Thanks Wayne - you are spot on !! we have decided yesterday to move to a 2 beddie rental by December. hopefully that will save some money and we will put this flatbush house on rent.

other thing you mentioend to sell the house to company or trust - how does that work ?
what expenses can you claim back on this ? if you be kind to explain a little more please.

[Wayne]

other thing you mentioend to sell the house to company or trust - how does that work ?
what expenses can you claim back on this ? if you be kind to explain a little more please.

It may be that, in your circumstances, the interest would be deductible as you are just renting the only house you own. Have a read of this thread - particularly #26

http://www.propertytalk.com/forum/showthread.php?16296-Renting-out-your-own-home-can-one-claim-interest-off-mortgage-as-expense/page3

What a lot of people do is borrow money to build a new house then rent their old house - the money borrowed is for the new house not the old so is not deductible. In this case the restructure by selling the old home to a company and use the money THEY get from the company for the purchase to buy the new home. New home becomes mortgage free and rental has deductions.

In short, in your case, you are probably OK owning and renting out the house but, as always, call your professional.

[lamborgini]

It may be that, in your circumstances, the interest would be deductible as you are just renting the only house you own. Have a read of this thread - particularly #26

http://www.propertytalk.com/forum/showthread.php?16296-Renting-out-your-own-home-can-one-claim-interest-off-mortgage-as-expense/page3

What a lot of people do is borrow money to build a new house then rent their old house - the money borrowed is for the new house not the old so is not deductible. In this case the restructure by selling the old home to a company and use the money THEY get from the company for the purchase to buy the new home. New home becomes mortgage free and rental has deductions.

In short, in your case, you are probably OK owning and renting out the house but, as always, call your professional.

Thanks Wayne, great idea - i'll research into it. cheers mate.

[AMR]

Lamborghini, your weakness seems to be equity rather than cashflow. Moving to a 2 bedroom unit and might help you to save an extra $120 per week but won't help your equity situation (unless you slowly save up the extra $120 per week, but sounds like more trouble than it's worth).

Can you add value to your existing property? I.e cosmetic reno in parts. Or look at getting another valuation done if you think the original one was disappointing.

[lamborgini]

thanks AMR. 3 new properties have come up for sale in our street and i am waiting for them to get sold to get another valuation done. Gary Lin has kindly given a reference a valuer.

Reno done on this property : we bought it brand new but not a lot was done in the exterior of the property.. it was all a weed yard uptill a few months ago. we have made a big deck 32 sqm, made a big retaining wall, concrete one side of the house, flattened the section, topsoil, planters around the house, got brand new grass which is growing beautifully now, a big retaining wall filled with top soil where we are growing veges, etc... A lot has already been done. We did tell this valuer but unfortunately... didn't stack up with him for some reason.

[speights boy]

What about AMR's main point ?
How does renting improve your equity / borrowing ability situation ?

[BigDreamer]

thanks AMR. 3 new properties have come up for sale in our street and i am waiting for them to get sold to get another valuation done. Gary Lin has kindly given a reference a valuer.

Can you do that though?

I thought banks now only accept their own valuers ?

I'm with ANZ and they would only accept a valuation ordered from their own choice of valuers (PropertyIQ) which costs me $490. I didn't think they accept a valuation you obtained from another company.

[lamborgini]

Well, Renting will help if i look at a long term view 1 yr
1 We will save lets say $100 wk - equating to $5200 a year (help to pay down the loss/debt)
2. We will rent out this property and check with the accountant on how we can claim expenses on it (have to check with accountant and need to explore options of selling to trust/company)
3. Equity will probably increase in a year's time as Flatbush is a growing area.
4. We will be moving closer to work and hence will be able to save some more and pay down the loss/debt more.
5. Currently i am paying $300 extra toward debt /loss which will be around $7800 minus interest in that year
6. Make flatbush property interest only if i can but i guess bank would ask for 20% equity so dont think this would not be achievable just yet.

After a year - we would have made a good dent on what i owe to bank from Tokoroa property loss at least.

[lamborgini]

Can you do that though?

I thought banks now only accept their own valuers ?

I'm with ANZ and they would only accept a valuation ordered from their own choice of valuers (PropertyIQ) which costs me $490. I didn't think they accept a valuation you obtained from another company.

You are right..I did pay 490 for my valuation but i will argue this with the bank.
Property IQ valuation gave desktop valuation 623k and valuer gave app. 600k How about that..