Advanced Finance Tricks

[McJet]

Hi Everybody, just wondering who can assist. Looking at purchasing a property for $178k using our revolving credit facility. We have had a valuation done for present value plus done up value (haven't got results yet).

Anyway what we are looking at doing getting finance for the deal using done up valuation the day after the settlement using our revolving credit, meantime using access to do cosmetic improvements.

Also, what other strategies are you guys using that we can all learn from??? Cheers

[Josko]

So if I read you correctly you will purchase the property using the Revolving Credit facility that is the whole 178k. If you do this nothing to stop you applying for finance using the Valuation based on do up value.

The only thing you could have done, if you can find a willing vendor, is negotiate access to the property prior to settlement so you could complete renovations to be ready for rent on settlement, this will reduce holding costs.

Is this a Buy & Hold property?

[McJet]

Yes this is a buy and hold and yes we have access as per my original post. Might be a silly question, but do we need to have the cosmetics completed before we can use the valuation????

[cube]

Hi McJet,

If you are financing the initial purchase using your RC, then getting the property refinanced once the renovations are complete using a new valuation should not be a problem.

There are some lenders who will use the 'After Renovation Valuation' as the basis of lending, but it is quite a specialised area.

I suggest you contact Tina at www.ehomelink.co.nz for more advice if this is the path down which you wish to travel.

Good Luck

cube

[Josko]

Yes this is a buy and hold and yes we have access as per my original post. Might be a silly question, but do we need to have the cosmetics completed before we can use the valuation????

If the valuation clearly states that it is after renovations then the bank will ask have the renovations been done, the not so advanced trick will be whether to lie or not, the technique on the other hand is to complete the renovations and apply for finance after that, use a broker as Cube suggested.

[Fritz]

McJet,

if you are paying cash (out of your RC) for it and the doing the reno, just go to a bank/broker and show them the after reno valuation and they will give you a new mortgage on that basis. If your current bank/broker cannot arrange that find a new one.

Fritz.

[Monkeyboy]

Get a loan against the purchase price using your RC as your deposit. You can purchase an investment with as little as only 5% Deposit and borrow 80-95% at a cheaper than floating rate, depending on situation. Then after reno has been completed get a top up.