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Creative property investing

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  • 01-01-2015 6:45pm
    #1
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭


    what methods are investors using at the moment to invest in property apart from using cash or alot there of. For example is existing encumbered assets been pledged. Are rental properties with existing tenants in place been used I.e. rent role of property been purchased been taken into consideration by the bank. are there other methods also at play or are banks just not interested no matter what.


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    #2
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    Pledging of unencumbered assets- preferably valued at 50% or higher of the capital being sought (obviously the better the LTV ratio of the unencumbered asset being pledged- the better the interest rate offered).

    Zero interest in property with pre-existing mortgages- being second or third dibs in the queue, isn't worth the paper its written on..........


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    #3
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    The_Conductor wrote: »
    Pledging of unencumbered assets- preferably valued at 50% or higher of the capital being sought (obviously the better the LTV ratio of the unencumbered asset being pledged- the better the interest rate offered).

    Zero interest in property with pre-existing mortgages- being second or third dibs in the queue, isn't worth the paper its written on..........


    Do present earning have to cover repayments or is it sufficient proven rental received from the property to be purchased will cover this ?


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    #4
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    handlemaster wrote: »
    Do present earning have to cover repayments or is it sufficient proven rental received from the property to be purchased will cover this ?

    I imagine it would depend on the lender- however, as a generalisation the rental income of the property you propose to purchase, would, in theory, be the revenue stream against which costs (such as mortgage repayments) would be deducted (of course its not quite this straight forward from a tax perspective- but you get my drift).

    A lender would hardly be in a position to put a lien on the rental income from a wholly separate property- to satisfy loan repayments on a different property. If it was an unencumbered property though- they could threaten to attach a charge to it- which would be a strong threat- as they would be at top of the queue (after Revenue of course).


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