Thought we would share with you a recent client’s experience with us.
When a busy doctor who had worked with banks to set up finance for her investment properties contacted us, she walked away with three more properties and a newly simplified finance structure that saved her money.
Jonathon Wells*, a doctor who had purchased six investment properties while working with traditional bankers, called us to help him streamline the loans attached to the assets.
“As I started working more closely with him, I discovered there was a complex web of loans attached to the portfolio, So it made sense to try to rationalise and simplify the loan structures. At the time, he had loans with three different banks and didn’t know which properties were used to secure individual loans.”
Each time Wells bought a new property, he took out a new loan. As a result, there were multiple loans attached to each property, as he had accessed the equity in the existing properties to purchase additional properties. As well, many of the properties in the portfolio were cross-secured, creating a very complex arrangement.
“The problem we faced was that any refinancing would almost certainly have involved a massive exposure to lenders’ mortgage insurance (LMI), But he had a huge plus in his favour: as a doctor, he was able to take advantage of a benefit some lenders give doctors so they don’t have to pay LMI.”
Knowing this, and knowing which lenders offered this bonus, meant we were able to restructure the loans attached to Wells property portfolio so that there was only one loan associated with every property, rather than two or three.
“We made sure none of the properties were cross-secured, making a very complex structure much more simple. It’s also certainly helped her accountant at tax time”.
With our help he purchased a further three investment properties, and now owns nine in various locations, worth approximately $7.5 million dollars.
*Client’s name has been changed.
We can make the most complex loan structures simple for you to enable you to grow your property portfolio. Get in touch with us today to discuss your options.