[On-Demand Webinar] Finance Fundamentals- Hints, Tips and Strategies
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Transcript of [On-Demand Webinar] Finance Fundamentals- Hints, Tips and Strategies
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Property Investment Finance
Fundamentals
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• Property investor for the past 10 years
• Supports 500+ members
• Personal experience with renovations
• Great amount of industry experience
Dennis Wong
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• 7 years broking experience
• 12 years experience within the commercial & general insurance industry
• 4 years leading a credit team for a nationally recognised non-bank lender
Paul Da Silva
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We help investors build and manage
their property portfolios
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This presentation contains general information only and does not take into
account your personal objectives, financial situation or needs.
You should consider whether the information is appropriate to you before acting on it.
Before acting on any information you should consider seeking advice from a qualified
financial adviser and / or accountant.
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Our mission is to provide property investors around the world with the best advice,
guidance, products and services to enable them to create wealth through property investment.
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• 2,800 current members• We help simply Real Estate
Investment• Mix of personal users, brokers,
buyers agents and accountants• 250,000+ members use us for
market information, calculators, investment news and updates
Real Estate Investar
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ASX:REV
• Heavy investment in product• Public company governance• Strong and focused board
• Simon Baker – Former CEO of REA• Anthony Catalano – CEO of Domain
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In Partnership With…
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1.9m Australians
1 Property
2-4 Properties5+ Properties
• Pays shortfall for 5 years+.
• Eventually sells and pays down personal debt.
• No retirement income.
• Strategy & numbers.
• Self funding portfolio.
• $100-$250k+ passive income in retirement.
• Has high income or buys every few years.
• Freehold in retirement.
• Min. retirement income.
Source ATO/ABS
3 Levels of Property Investment
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1.9m Australians
1 Property1.4m73%
2-4 Properties470,000
25%
5+ Properties30,000
2%
• Pays shortfall for 5 years+.
• Eventually sells and pays down personal debt.
• No retirement income.
• Strategy & numbers.
• Self funding portfolio.
• End up freehold• $100-$250k+
passive income in retirement.
• Has high income or buys every few years.
• Freehold in retirement.
• Min. retirement income.
Source ATO/ABS
What Level are you Aiming for?
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Poll: How many properties do you own?
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• Mortgage Broker is working for you.
• Have the same goal – your success.
• Banks won’t help you maximise LVR as you grow.
• Banks are limited in the products they can offer.• Banks are limited by their lending policy.• Mortgage Broker has dozens of lenders and
hundreds of products at their disposal• Mortgage Broker – your partner, facilitator
Bank or Broker? What’s the Difference?
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What do you need to determine to ensure your finance is structured right:
• Review your current financial position • Assess the property being acquired• Need to consider your future objectives and
goals
Importance of having the right finance structure
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• Is a Bank relationship important?• Cross collateralise or stand alone? • Is having the cheapest deal available the right
strategy?• What product is right for you?• What if you get it wrong?
Importance of having the right finance structure
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One lender or multiple?
• No right or wrong answer
• Becomes more important when your portfolio grows
• Both have advantages and disadvantages
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• Ease of extracting equity
• Ease of administration
• Negotiating leverage
One Lender Advantages
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One Lender Disadvantages
• Changes in lending policy
• Restrictions of a single lending policy
• Maximum exposure limits
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• Spreading risk• Pick the lender with the best lending
policy• Take advantage of specials• Make use of capacity criteria
Multiple Lender Advantages
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• Can be tougher to extract equity from multiple properties
• New lender may have a higher assessment rate for debts not held with them
• More administration and possibly costs
Multiple Lender Disadvantages
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How lenders assess your application
• Character
• Collateral
• Capacity
• Current Conditions
Lenders look at what they call the 4 C’s of credit:
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• Credit history
• Stability of employment
• Good asset position
Character
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• Is the property in a good area• Is it in good repair• How much are you borrowing against the
property (LVR)• Can it be easily sold
Collateral
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• Assess if you have the income to meet your repayments
Lender policies disadvantages property investors. Why?
• Rental income is discounted• Interest rates are assumed higher• Tax benefits can often be ignored
Capacity to repay
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• Local economy factors are considered
• Local employment situation
• National and global conditions
Current conditions
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Arrange a Free Finance Check Today at
info.realestateinvestar.com.au/finance
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Poll: Would you like a free financial check?
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Introducing Premium Membership
For the hands-off investor who wants an easy way to purchase their next investment property. Using a six step, strategic approach we help:• First time investors purchase their first property• Existing investors grow their portfolio
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Six Step, Strategic Approach
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Which property is right for you?We’ll work together to determine your property investing goals and the investing strategy you intend to use. For example:
1. Boost or replace your income with passive cash flow
2. Generate equity for retirement through renovations or subdivisions
We help first time and existing investors purchase
• Existing houses and units in growth markets
• Brand new off the plan apartments, dual occupancy property and duplexes in growth markets
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Recent member purchases
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Advantages of Premium Membership• Transparency on any opportunities we recommend to you
• Recommended new and / or existing properties• Dedicated Portfolio Manager • ASX listed business• Exclusive access to stock • Leverage our experience, professional ties and partners • Receive a $5,000 cash rebate on settlement for off-the-
plan
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Do you have?• A well-defined investing strategy in place?• An acquisition plan to find and research your next property
investment opportunity?• The time or know-how to implement your investing goals to
create sustainable wealth?
If the answer is no, don’t worry, many other property investors we connect with are in a similar position
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If you want some help…
• We find out your current situation• The outcomes you want to achieve• Challenges currently standing in your way• How we can help you purchase properties • Next action steps
Register at info.realestateinvestar.com.au/premium-membership-consultation
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Poll: Would you like a free consultation?
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Q&A Session