Master Class:

Property Investment Finance Hints, Tips and Strategies

With Murray Lees From Property Investor Mortgages

We help investors build and manage

their property portfolios

In partnership with…

Real Estate Investar’s tools

Master class webinars• Designed to share knowledge

• Desire to provide extra value to our clients

• Great for both new and experienced investors

• Plenty of opportunity for Q&A

• We run these regularly throughout the year, and sometime involve our partners to provide additional insight

Todays 7 topics1. The importance of the right structure

2. How lenders will assess your application

3. How maximise your borrowing capacity

4. Funding vs. Financing - what is the difference

5. Loan types - what’s right for you

6. One lender or multiple - the pros and cons

7. Managing your risk as a borrower

Plus a Live Q & A following the Webinar

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Audience poll:

How many investment properties do you own?

General advice disclaimer

Material contained in this presentation is an overview only and it should not be considered as a comprehensive statement on any matter nor relied upon as such.

This presentation contains general information only and does not take into account your personal objectives, financial situation or needs and you should consider whether the information is appropriate to you before acting on it. Both superannuation and tax laws are complex and subject to change. Before acting on any information you should consider seeking advice from a financial adviser and your accountant before making any financial decision in relation to any matters discussed in this presentation.

• Started in industry in 1984 with AVCO Finance

• 1991-1995 AMP

• 1995-2003 Mortgage Broking

• 2003-2014 Connective Mortgage Aggregation

• Started with 4 brokers

• Grew to 2800 brokers

• Settling over $3.5B in loans per month

• Telstra Medium Business of the year

• BRW Fast 100

• Numerous Industry awards

Murray Lees background

• My first home loan experience wasn’t great!

• Prior to deregulation all lenders were the same

• Foreign Lenders • Expansion of

Regional Lenders• Non Bank Lenders

Home loan industry history

• Rate is the biggest driver for owner occupier borrowers

• Property investors have to skillfully navigate a system that mitigates against their success

• There is a huge difference between being able to afford an investment and being to get finance for it

• You have to be able to choose the right lender - one that will grow with you

How are the needs of property investors different to other borrowers?

• It’s not about the rate!• In a competitive market

place no one can hold a rate advantage

• It’s how they will assess your application

• Whether they will approve it

• What the product specifications are

What is the difference between Lenders?

Audience poll:

When did you last have a professional review of all your

mortgages?

• Character• Collateral• Capacity• Current Conditions

Lender assessment policy

• Lenders policy disadvantages property investors

• Rent is discounted• Interest rate is assumed

higher• Tax benefits may be

ignored

Capacity to repay

• A low LVR is your friend• High LVR leads to higher

costs• 80% is the comfort point for

most lenders• Still possible to get 90-95%

investment loan with a few lenders

Collateral

• Prime differential is not the interest rate

• Policy and procedure (capacity)

• Collateral policy• Product specs

How Lenders differentiate

• It’s a question of risk management• Investment strategy has known risks

• Vacancy• Damage to property• Wrong property selection• Timing• Interest rate variability

Fixed vs. Variable

Audience poll:

Are you aware of the interest rates you are currently on?

• No right or wrong answer• Depends on your comfort level• Is cross collaterisation evil?

One Lender or multiple?

• Ease of extracting equity• Less paperwork / costs• Easier to manage relationship

One Lender advantages

• Risk appetite of the Lender• Change in policy• Collateral policy

One Lender disadvantages

• Spreading the risk (arguable!)• Cherry-pick Lender for collateral purposes• Take advantage of specials• Make use of capacity criteria

Multiple Lender advantages

• Harder to get equity out as you would need to act on every property / security

• New lender may use a higher servicing rate if the debt is not with them

• More administration

Multiple Lender disadvantages

• Lower LVR• Potentially higher set up costs• Potentially higher interest rate

SMSF lending

• Recruiting a team of highly skilled brokers• Must understand investor mentality• Backed up by our desk based team preparing

and assisting clients

Property Investor Mortgages team

Audience poll:

Would you be interested in a free mortgage health check?

Finance Q&AMurray Lees

Register for a free consultation with a Property Investor Mortgages specialist

http://info.realestateinvestar.com.au/pim