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  1. #1

    Smile Have I Hit the Glass Ceiling?

    Hi Really keen on helpful tips from investors who have grown their portfolios past a certain level. I have acquired ten properties over the past 5 years, I am around 70% leveraged and all my properties have reasonable cashflow. I have had no probs getting finance in the past and have good relationships with the three banks that I am spread my lending over. My problems have come with property number eleven! I have recently put three deals to the banks through my broker. All have seemed like great deals to me - in reasonable sized New Zealand towns or cities and with yields over 10%. But every time I have been turned down for finance at the last minute, because
    *I am over the "ten property" threshhold which apparently makes me a "business customer" as oppsosed to an "Investor" and puts me in a different category of the banks lending portfolio with different rules (which no-one will actually explain to me!)
    *They say I am "too reliant or "exposed" to rental income" (well excuse me, but isnt that what property investment is built on? Rental income?)

    Have others had this hurdle and how did you get over it? Thanks!

  2. #2
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    Yep the rules change at around ten. Trading to get bigger deposits was how I solved it.
    In the current market JVing is a good solution.

  3. #3

    Default

    Thanks, Dean. Sorry if Im stupid but what do you mean by JVing?

  4. #4
    Join Date
    Jul 2006
    Location
    NZ, for now
    Posts
    572

    Default

    I recall reading about this some months ago (could be a year) here on PT and so I approached our BNZ personal manager about the issue as it was possible that we too could face this.

    she assured me that we could still deal with her without moving to commercial although she would still have to follow the proticols of any loan application.

    Perhaps its a bank by bank thing?
    S.

  5. #5
    Join Date
    Jun 2005
    Location
    Auckland
    Posts
    5,086

    Default

    JVing - Joint Venturing
    DFTBA

  6. #6
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    Do a joint venture with someone who has lots of income or equity, whatever you need. You can even have the partner do the loan/purchase entirely in their name and have a separate agreement registering your interest in the property.

  7. #7
    Join Date
    Apr 2009
    Posts
    1,003

    Default

    Is there room to increase the value of your existing portfolio?


 

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