NZ 1st homebuyers are ScReWeD...

[JBmurc]

@JBMurc, I think you've answered most of your own questions. Borrow enough to buy, tenant that, architect designs the improvements and extensions, borrow more on that, build it and tenant it, borrow on the equity, pay only interest, rinse and repeat. Thing is, you're not just a property developer/landlord, you have other things going on that banks don't like and won't lend while you do. Don't take it personally, just ask them what you're doing that they don't like, they'll tell you and you can decide to become a property magnate or continue doing what you do without them.

Trading the sharemarket LOL >>> that and I'm no longer in my 20's ... couple kids wife etc ....I have tried to dig into the whole loan capacity issue with different banks .. but the managers are very hard to pin down what I need to do to impress them to increase my lending book ..its always on a case to case basis and depends on the banks book etc ..

SBS 12yrs+ ago I sat down with the main office business manager and he told me if my company could put in three solid years of profits they could use up to 50% on the profitable income into the ability to service debt ...

At present they can use are debt free family home as equity ,,and as I'm now a full time trader(through my company) I'm looking at my fourth year of sizeable profits ... will be interesting to see how the banks are to deal with next year .. I would like to remove our personal home as security for the company loan and have the companies own income take up the loan..

[kiora]

"I would like to remove our personal home as security for the company loan and have the companies own income take up the loan.."

Will always be charged a significantly higher IR without that security

[JBmurc]

"I would like to remove our personal home as security for the company loan and have the companies own income take up the loan.."

Will always be charged a significantly higher IR without that security

Yes will be interesting ... will have a debt free commercial property early next year I will get revalued(maybe use this ? LVR would be 30%) ...plus the companies assets will see LVR less than 20%...

End of the day if we are going to OCR 4-4.5% end of the year thats 7%+ RES rates .... maybe peer to peer loan ? even if its couple percent higher least it can be interest only ... as the bank force me to make my Company loan P&I after 10yrs+ of I.O .... new banking reg BS!

[JBmurc]

Although only a brief article. A young man willing to take some risks has done very well for himself.

https://www.nzherald.co.nz/nz/auckla...JNIOG5ONB24BM/

He started in 2015.

Portfolio current market value 20mill
Debt 9 mill
Gross rental $1million

Overall, Brownlee equates 60 per cent of his success to smart structuring of his finances and mortgages, and 40 per cent to buying the right property.

Makes me look foolish with all my complaining. I remember looking at a property 7 years ago with a 5% gross yield which was well less than 5% net after rates etc and declined to make an offer on that basis. Really regretting that decision now. it would have been significant for me financially. Maybe that is why I am so bitter and angry at the RBNZ.

He is young but I also wonder how he goes if inflation hangs around. Every 1% increase is $90,000 more interest annually.

Does he have an implicit guarantee from central banks or is that an explicit gaurantee now that Japan and the US govts will be bankrupt if interest rates rise. That interest rates will not rise too far and Adrian has prepared the financial system for negative rates if needs be. In fact Adrian was appointed head of the RBNZ in 2017 and young Jonathan has never looked back.

Is that really the central banks job though??

No his DEBT is $11mill Vs $9mill in (reducing) free equality

https://www.interest.co.nz/property/...ce-index-shows ...

he must surely have most of his loans as I.O as looking towards the end of the year if he is rolling over fixed terms he will be looking at much higher rates than last 4yrs+
And his margins would be very tight if paying P&I over 30yrs + hundreds thousands in costs pa holding 51x RES/COM properties...(rates bill alone would have to be well over 100k pa, it states his Property mgmt costs $100k pa , insurance another 80-100k ?)
As it states his present gross income is 1mill pa

[Aaron]

No his DEBT is $11mill Vs $9mill in (reducing) free equality

https://www.interest.co.nz/property/...ce-index-shows ...

I had better be more careful that means $110,000 interest for every 1% rise. It sounds like he travelled far and wide to secure good deals so built up equity quickly.

As far as your lending woes, on this site you come across as a risk taker rather than a conservative investor. I thought your commercial property was in a small town on a high yield, this might frighten banks a bit and then if you tell them you are a fulltime share trader, even if you have a good track record the bank managers would run for the hills, I would imagine. Age also starts to become a problem I guess.

Wait for the property market to get a bit worse, it may be bankers will be falling over themselves to lend money in the future.

[JBmurc]

I had better be more careful that means $110,000 interest for every 1% rise. It sounds like he travelled far and wide to secure good deals so built up equity quickly.

As far as your lending woes, on this site you come across as a risk taker rather than a conservative investor. I thought your commercial property was in a small town on a high yield, this might frighten banks a bit and then if you tell them you are a fulltime share trader, even if you have a good track record the bank managers would run for the hills, I would imagine. Age also starts to become a problem I guess.

Wait for the property market to get a bit worse, it may be bankers will be falling over themselves to lend money in the future.

Yes Commercial property is in a small rural town surrounded by some of NZ's best farming land(Fonterra plant few Kms down the road) ... PGG Wrightson's as tenant ROR till 2033 replacement cost 3x times that of purchase price ... even insurance policy value is double what I paid for it... personal I think its a safer investment than say a HIGH cost - low yield tourism commercial property where I live>>>

Yes for sure the bank would see me as a riskier profile ..but surely the numbers must rule .. over 20x+ loans all paid back never missed a payment , credit rating over 850 ...YOY very profitable trading history recent times going back to 2016 ... RES family home easy cover all lending I'd want to do to 70%-80% LVR .

.I think the banks have boxes they like to put the people into and if you don't fit the boxes of the masses you are different your classed as high risk ...pretty much seen as valueless client and given the same lending as 20yr with 50k income 50k deposit

like a teacher or lawyer, builder, road worker could never go bankrupt ..

[clown]

Hi Guys, I'm a first home buyer and I had a meeting with a MA yesterday.
I've been advised that in order to to get a first home loan, I would need to sell all my shares and use it towards the deposit, this is because the bank won't like it if I didn't disclose my shares.
My shares are for long-term plans, selling them now would probably trigger some tax as well.

Has anyone had to do this? or heard of something like this before?

[stoploss]

Hi Guys, I'm a first home buyer and I had a meeting with a MA yesterday.
I've been advised that in order to to get a first home loan, I would need to sell all my shares and use it towards the deposit, this is because the bank won't like it if I didn't disclose my shares.
My shares are for long-term plans, selling them now would probably trigger some tax as well.

Has anyone had to do this? or heard of something like this before?

I work as a mortgage adviser . This doesn’t sound correct to me . The fact you have some assets you can sell is a good thing .
Do you have a 20 % deposit without the sale of the shares ?
Its possible the MA was trying to save you low equity fees , or a premium on the interest rate by getting your deposit above 20%.

[clown]

I work as a mortgage adviser . This doesn’t sound correct to me . The fact you have some assets you can sell is a good thing .
Do you have a 20 % deposit without the sale of the shares ?
Its possible the MA was trying to save you low equity fees , or a premium on the interest rate by getting your deposit above 20%.

I don't have 20%. Yes, the MA was trying to get us through with a 10% deposit, and Kainga Ora through Westpac.
Said that we're only allowed to have $5k in the bank if we use this method. Everything else needs to go towards the deposit.

[Logen Ninefingers]

‘People who went ‘all-in’ on property are screwed’.

Change the thread title, the ‘Great New Zealand Property Ponzi Scheme’ is heading towards a crash.