澳洲Australia property How much cash could you raise quickly for


在澳大利亚 I am in Melbourne. Would like to buy properties interstate. How difficult is that to manage these properties. Any advise. 评论 Do you mean manage to find them or manage as in property manager? 评论 Manage to find a good property manager 评 Hi everyone, After months of searching for my first IP I believe finally have the corage to put in my first offer. I would love some feedback Property: Duplex Asking price: $239,000 I believe it is worth $225,000 to $230,000 My Offer: $218,0


This thread is in response to some experiences I've had in finding great investment opportunities (conducting all necessary due diligence) and raising the funds required to take them up in a short period of time.

I'm wondering how other forumites have their finances structured - on the basis of how much cash you can raise quickly - faster than it takes to refinance a property or secure a property loan - to take advantage of a great investment opportunity that crosses your desk.

So assuming you've done your due diligence & want to invest - how much cash can you raise in a fortnight for a great investment opportunity?

Cheers,

Aceyducey  

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should we exclude funds that could be borrowed?, otherwise I think there will be a lot of 100k responses :)  

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paul_s said:
should we exclude funds that could be borrowed?, otherwise I think there will be a lot of 100k responses :)Click to expand...
Why wouldn't drawing down an LOC be ok? I would use that cash for a good investment.

Thommo  

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paul_s said:
should we exclude funds that could be borrowed?, otherwise I think there will be a lot of 100k responses :)Click to expand...
Faster than refinancing a property yes - I'll bold that bit in my post :)

If you have available credit in an LOC I reckon that's legit - because it's available to you now....ditto redraws, overdrafts, share sales, borrowing from rellies & actually working ;)

Any cash you could legitimitely get your hands on within about 14 days for an investment that fulfils your criteria.

Cheers,

Aceyducey  

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Acey

Why not refinancing? I could certainly refinance in two weeks, and this would be accessing a legitimate source of funds.

After all, money sitting around is not much use to anyone, so significant cash reserves are pretty much a thing of the past.

Even Lines of Credit or funds available for redraw are limited by the historic nature of the original loan amount. If a loan has been in place for more than, say, three years there may be more equity available than currently approved funds.

Refinancing can be a speedy process if people are prepared to take advantage of opportunities. But why do it before you need to?

If, as the Pollster, you will 'allow' refinancing I will cast my vote!!!

Kristine  

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"Refinance" or top up/lock in now ?

Hi Kristine


Many people have a belief that their IP investments may not be worth as much in 3 years time as they are today due to many varying but colluding market forces. so, they are choosing to lock in today's values as a floor.

Additionally, there are some properties that are going to be less desirable as security for a lender in future times. this has already happened with some inner city stock in the capital cities. Again, people may want to lock away a higher LVR that they have access to today, but maybe not tommorow

Ta
rolf  

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Kristine.. said:
Why not refinancing? I could certainly refinance in two weeks, and this would be accessing a legitimate source of funds.Click to expand...
If you can refinance in under two weeks go for it.

Im my experience this is extremely optimistic considering the documentation required, valuations, bank timetables for processing & how long it takes to get money in your account :)

Cheers,

Aceyducey  

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Why not say 48 Hours.

That would preclude refinancing (which for two weeks I reckon you'd have to be chasing pretty hard for it....). Besides, refinancing usually comes down to someone's opinion of worth, and the bank usually thinks less than we do - to cover their own behinds (quite legitimately though I guess)

Lets face it, readily accessible means (to me anyway)

* LOC/Redraw Funds AVAILABLE.
* Shares / Managed Funds cashable
* Cash at bank (What's that ??!!??)
* Rello's / Friends who would lend you at short call (which means they have the $$$)
* Any other method within 48 hours.


That's how I answered.... :D

Cheerio  

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Of course the proof is in the pudding - at the end of the survey I'll offer a great investment for which people will have to get me cash in under two weeks :D

Cheers,

Aceyducey  

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Hi All

My thoughts are that the point of Acey's post is to understand how much cash people have readily available to take up opportunities should they present themselves in a reasonable period of time.

From my point of view I am currently in the process of refinancing with the CBA at the moment as I am settling on a new property in late May. I first met with the bank on 29th March and despite my best endevours to get this moving quickly along, the refinance has still not been finalised. After you take into account new valuations being conducted, processing with LMI, submitting new documents for substantiation, signing docs, this is a long labourious process. I still do not have from the bank a letter saying finance has been approved and 5 weeks have elapsed. I anticipate this process being finalised in 2 weeks now, so 7 weeks all up.

For anyone hoping to refinance who has not been through the process before, I would personally recommend allowing 8 weeks (i have allowed 12 weeks before I needed the money to be on the safe side). If between you and your bank you can get it done in 2 weeks like Kristine can do, then that is absolutely great, and you have nothing to worry about, but I have not personally found this to be the case. Also, I am not exactly the type of client that CBA wants to let go of, so I am not sure why they are not responding quicker, probably because LMI is involved.

I would also recommend that people revalue there portfolio regurarly to recognise and lock in the values of their properties and get their limits approved as soon as there is market evidence to suggest a higher valuation can be justified. The reason why is so that you can use this capital when and if you need it. The only reason I would see not to, is if you have servicability issues and dont want to be assessed at a higher servicability level as the banks will assess you against the fully drawn down amount or people are not disciplined enough to only use the VLOC for new investment opportunities and not doodads.

Kristines question "why do it (refinance) before you need to?" My thoughts are is Acey's post is exactly why. So that you have readily available a source of capital that is quickly available to you in the event that the right opportunity presents itself.

I mean worst case scenario, if the bank rejects the request, then there is not many avenues left when the clock is ticking and you need the money fast. I would rather be prepared on my terms when the opportunity comes along, rather than at the mercy of the banks.

I guess if people are multi-millionaires and have stacks of income and equity then it would probably be quite quick to get money from the banks, but if people are not in this position, it is probably more difficult.

I would like to see the timeframe reduced from 2 weeks to 48 hours as well for that reason to exclude refinancing. Sitting on a cash pile, I would agree that is not a good idea, but having ready access to capital (cash, equity, credit, overdraft) is fairly important when you need to move quickly.

Kind regards

Corsa  

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I think you may find there are more people than normal sitting on cashpiles. There are investors out there who have sold out some, if not all, their property portfolios on the speculation that the market has peaked and with no forseeable CG in the next couple of years, cash, or stocks/funds are king.

It wouldn't take too long to sell a portion of a Fund/Stock portfolio to raise cash for an opportunity.  

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And that's exactly what I did recently.

Got the ones with equity refinanced and had the equity ready to be called upon.

That way, when I find a good buy (like....say a few weeks ago :rolleyes: ), I can commit with confidence (as I did.... :D ).


So ACEY, what's the deal then ???!!?? :eek:


Updated: Will be busy soon - another reno job !!! And I had sooooo much time on my hands - NOT!  

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Guys,

To save all the speculation, my purpose in putting this thread up is to make people think about how their financial position is structured.

I've spoken with a lot of people with high net worths - some of them have flexible structures which allow them to 'liberate' large amounts of money relatively quickly, some don't.

With the various investment markets in a period of transition I reckon there's going to be a lot of opportunities in the next few years for people with this level of flexibility to take up.

Something to think about :)

Frankly if given a month or two months most people can put their hands on a great deal more funds - but the key is about how much can you put yours hands on quickly to pay that cash over for an investment.

A lot of people have voted at the $100K+ level - I hope they are thinking seriously about this & basing this on their unspent funds in LOCs, offsets, shares and other liquid sources of funds rather than relying on a bank coming through with cash from their equity within two weeks.....

With some investments time is very definitely money! :)

Cheers,

Aceyducey  

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If we can get our hands on this money what will we do with it i have my loc tyed up in shares and now the only way i can gain more funds through the bank would be to sell them , but i am not prepared to do that unless it is the deal of the century.
any ideas on how i can change this situation.

:) Crusty  

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I reckon I know where you are going with this Acey, and I don't think this is the right place for it.
ab  

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astroboy said:
I reckon I know where you are going with this Acey, and I don't think this is the right place for it.
abClick to expand...
Hi All

I am not entirely sure what Astroboy is referring to here, but I personally believe that Acey's poll is a very valid one and one worthy of serious deliberation.

When the right deal comes along, time is precious, and sometimes you have to move fast. Readily available cash is critical when it comes to entering into deals on a timely basis, and I would stongly suggest that everyone think about this question in relation to their own personal situation and question how ready they would be?

Think about it, if you had to come up with cold hard cash whether by withdrawing from an approved credit line or money sitting in the bank how much could you come up with in a day or so if you had to. In my opinion, this would not include equity in ones PPOR or IP's that had not been pre-arranged and available in a LOC, it would just not be available in the timeframe.

Crusty, I emphathise with your position, and have been there before also. You may not be able to do anything about your position now, but eventually you will need to move to the position where you either realise some of your share gains to release some cash or your existing assets grow so you can refinance into a line of credit.

In the meantime, the reality is if a good deal does come along, then you will not be able to participate and you will be sidelined.

Otherwise, if you need access to cash, you may be forced to sell at a time that does not suit you.

The way I see it is by being organised you transfer the control of choice back into your own hands and not in the hand of others.

This is a great post Acey

Kind regards

Corsa  

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I'm with Corsa on this, despite what Acey may or may not be into at the moment, it is a very valid question and one I personally have spent some time thinking about.

There have been several occasions now when I have been able to participate in deals which required a relatively quick decision in a fairly short time frame (some as little as 48 hours) because I had the money available.

To me flexibility is everything - if there's one thing I hate it is being forced into situations where I no longer have control of the decision making process. My investment portfolio is not big enough yet for me to give up control over portions of it for any great length of time (ie by fixing interest rates, by signing long term contracts or by taking on investments where the return timeframe was a long way away). I'd be happy when it is - when I can make big long term bets and still have enough working capital to get into the "small deals" for that quick turn around.

Which is why I'm not buying property at the moment - I don't have the time to research outlying areas trying to find that gem of a property deal which has yet to catch the full force of the current wave - and I'm not willing to buy into a city area which I do know, at or near the top of the cycle on the off-chance that I might get some good returns over the next 12-18 months before my next (very) big investment. Right now my current plans mean that I need to be careful with what control over my money I'm prepared to give away.  

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I know of one guy who sold over $23million of property up to July last year, and put it in bonds. He believes there will be a serious downswing within 18 months. A little pessimistic I think, but he is in his 70s, and very experienced. He'll start pulling it out of Swiss bonds and buying broadacres in SE Qld when the economy looks like recovering.

As for me, I could raise $150k cash by Friday. 2/3 is my Commsec trade fund. I have been waiting for the property market to soften significantly so i can buy, but stocks are providing enough volatility to turn me off property maybe til the end of the year. Trading drawbacks though are that CGs are realized this FY.  

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thefirstbruce said:
I know of one guy who sold over $23million of property up to July last year, and put it in bonds. He believes there will be a serious downswing within 18 months. A little pessimistic I think, but he is in his 70s, and very experienced. He'll start pulling it out of Swiss bonds and buying broadacres in SE Qld when the economy looks like recovering.

.Click to expand...
Swiss Bonds - I think I read last week that Swiss interest rates are under 2%?
And, if interest rates start to move up globally (likely in the US to start), his capital is at risk - so I don't understand his strategy. Although I guess he may be taking advantage of there special tax rates. ;)

BTW Acey - I have voted.

However I already have my eye on my next investment, so you'd better be quick ie within a week.

GarryK  

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astroboy said:
I reckon I know where you are going with this Acey, and I don't think this is the right place for it.
abClick to expand...
I'd be suprised if Acey did a post on the forum concerning his current ventures in an effort to raise funds. My understanding is that his latest raising was over subscribed within one day. You have to be carefull how you advertise things in relation to ASIC etc.

BTW I have no involvment or investments with Acey.

See Change  

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