Non banks and Investment loans

[brokerman]

As we all know the dear old RBNZ limit banks to 70% standalone on investment property plus most banks apply a 2% ish margin to stressing other lending on a 25 year P&I basis, this makes servicing a real pain.

At last a real alternative to bank lending with the launch of an 80% standalone investment loan at 5.09% fixed for two years and with the stressing of other lending at pretty much what it costs.

Non bank lender funded from overseas so no RBNZ restrictions and lending on a commercial basis, not regulatory.

Happy to chat through any scenario

[Don't believe the Hype]

Hi Brokerman - how do the non bank lenders assess values? Do they use CV or do they expect the owners to stump up for valuations?

As an example:

Homes has the value of one of my properties at $505k which is really quite close to what similar properties in the same area have been selling for (maybe even a little under) while the CV is $345k. The CV is due to be updated this year but till then the bank has said valuations couldn't be used if they're more than 12 months old resulting in a huge cost whenever we wanted to increase borrowings to get everything valued or use CV.

The LVR requirement is not the issue - the cost of valuations is and if non bank lenders are willing to fund valuations or accept different forms of valuations the higher interest rate may be worth considering.

[brokerman]

Registered Valuation only as its the only one worth anything!

[DaveW]

Registered Valuation only as its the only one worth anything!

And there lies one of the tools to growing a portfolio faster than the average investor. Learn how to choose a valuer who will give you the highest value. Non bank lenders are less strict than banks, they take on a bit more risk and they expect to receive a slightly higher interest rate. But you will find you will free up a lot more capital to achieve more, faster. The 1% only extra interest per annum is peanuts in the big scheme of things. You just need to put the extra capital to work.

[JBM]

Very interested... will be in touch once I re-fix current loans .. as I’m interested in a small commercial property my current bank would lend on but at high 2%+ rates

[Beano]

Very interested... will be in touch once I re-fix current loans .. as I’m interested in a small commercial property my current bank would lend on but at high 2%+ rates

Dan Walker here from Colliers in Napier New Zealand. Has got a retail complex for sale with a rental income of approx $750k net per annum, seismic strengthened and over 3000sqm of CBD land. Net Returns 8%-9%. Would you have any interest in something like that? Or is that too small ?

[DaveW]

I would be happy to assist a would be buyer with due diligence for this if anyone is interested.

[Don't believe the Hype]

Registered Valuation only as its the only one worth anything!

Thanks brokerman. This is the same requirement as the banks and the cost I'm looking to avoid. If I have to pay for valuations I may as well go with a bank to get the lower interest rate. I'm not interested in gearing beyond the level they'll fund (ie current LVR limits)

[JBM]

Dan Walker here from Colliers in Napier New Zealand. Has got a retail complex for sale with a rental income of approx $750k net per annum, seismic strengthened and over 3000sqm of CBD land. Net Returns 8%-9%. Would you have any interest in something like that? Or is that too small ?

I wish >> that's way-way out of my league

[Anthonyacat]

I wish >> that's way-way out of my league

Is out of most people's leagues - Beano can just be a bit like that sometimes!

But get 10-35 friends together and surely you can raise the $3.5M deposit to buy the place, no? Reckon I'd be in for a share or two

[DaveW]

Lets see if this is a good deal and then let's see if the average investor can raise the finance.

Please share the following:
Property description
Tenancy schedule
Property operating expenses
Seismic assessment