APIA Blog

RSS Feed

Ryan Smuts: How to raise money quickly

Tuesday, April 21, 2020

IMAGE CREDIT: ADOBE

In certain markets where properties are moving quickly, your ideal scenario would be to aim at being in a position to purchase and move at the same pace as the market, that is being ready should a good deal presents itself. It is always better to be prepared for an opportunity and not have one, than to have an opportunity and be unprepared for it. 

 

Our recommendation would be to have your deposit funds ready – if they are in the form of cash this is simple. But if you are tapping into existing equity or your Kiwisaver, it makes sense to do the following:

  • For utilising equity in an existing property I would recommend getting your loan applications underway early for a top-up so you can be certain you meet the equity and servicing requirements – but also so that you can get something on paper and that you’re ready to go and act quickly. In an ideal scenario this would be then set-up as a revolving credit so you can move fast – but if not, a conditional approval subject to signed sale & purchase agreement, and (if applicable) a rental appraisal for the proposed new property is the next best alternative.
  • For Kiwisaver I would suggest that you contact your Kiwisaver provider early to find out if you are eligible – and in addition because they can usually take 10-15 working days to get this finalised – depending on provider. In addition to this it might be worthwhile checking if you’re eligible for a First Home Grant.

If you’re in a position where the above is sorted – the next best step is to get pre-approved. Have a home loan offer on paper which will be subject to a few conditions – if there are any that relate to you as a borrower, then get those ticked off (bank statements, payslips, etc.) and so the only ones that should remain, relate to the property itself (Sale & Purchase Agreement, Rental Appraisal, etc). In the absence of bank approvals or where you may be looking at short-term property transactions (flipping, trading, etc.) then non-banks are able to approve loans very quickly and usually only take a few working days for this. They are more focussed on the security property itself and your exit strategy, than meeting servicing requirements. They also usually require more deposit funds due to the increased risk – and of course have interest rates higher than banks – and fees. The key thing to be aware on the pricing side is that the lending is short-term, so the real cost is actually a lot lower than if it were held long-term like other properties.

In the current environment, all lenders are slower than usual due to increased volumes and also increased compliance requirements, so your best bet to be in a position to act quickly would be to get pre-approved and get your ducks in a row early.

 

My team and I are actively working with investors to get deals across the line even throughout COVID-19. Feel free to send me an email if you would like to have a chat about how we can help you meet your investment goals in 2020. 


ABOUT THE AUTHOR

Ryan Smuts 

Ryan is a Key Accounts Manager at Kris Pedersen Mortgages and Insurance as well as a property investor. 

 

 

 

 

Recent Posts


Tags

property maintenance HHS positive cash flow television covid-19 negotiation Property (Relationships) Act sublease Market report first home buying Guest blog mindset property subdivision cgt education warren buffett shower dome barfoot and thompson tenancy tribunal bad tenant tenancy issues LIM winz interest rates CoreLogic property cycle warm up new zealand Must know Q&A minor dwelling clnz re agent bond shortland chartered accountants Must knows insulation commerce commission speculator HSWA structure ring-fencing development heater trespass parry v inglis scotney williams apia gluckman report landlord rental market Editor's Choice letting rtaa2020 Investor story property management Level 4 relationship financial advisers act initio management How to property value yield Landlording buying rta early termination khh housing bubble extractor fan Question and answer airbnb return boarding house holiday house market TCIT income meth contamination Case study robert kiyosaki anz ird partners sale and purchase DTI bankruptcy Tribunal case study skill shortage equity kiwibuild ventilation Sponsored post auckland council buying rules beginner investor fixed-term tenancy meth asbestos twg report wins anti-social behaviour building tenant tax ocr market rent productivity privacy recycling equity RBNZ off the plan watercare investment strategy worksafe buyer's agent personal growth property apprentice sale and purchas unitary plan investor house prices Standards New Zealand advice mortgage nzpif will Holler termination trust auckland rta reform p lab debt enforcement reserve bank Gluckman principal and interest retaliatory notice finance Investment tip legal lvr renovation inspection election2020 data security cash-flow election 2017 business cat letting fee smoke alarm wealth creation government rent increase insurance housing affordability rental wof short-term rental heating ask an expert water bill rent arrears HHGA RTAA 2019 banking quiet enjoyment tenancy services damage rent brightline interest only CCC capital gain bond form Jeff Bezos trademe maintenance Kris Pedersen Mortgages and Insurance opes partners

Archive

Introducing Our Partners
Principal Sponsor - Kris Pedersen Mortgages & Insurance logo Gold Sponsor - Barfoot & Thompson logo Gold Sponsor - CoreLogic logo Property Apprentice logo The Insulation Warehouse logo The Renovation Team logo The New Zealand Property Investors' Federation logo
09 360 2376
info@apia.org.nz

The Tenancy Practice Service and TPS Credit Control work closely with the Auckland Property Investors' Association. Our vision of bringing helpful resources, documents and high quality services to Auckland Property Investors and Property Managers is shared by APIA, so its a partnership that works well. 

The Auckland Property Investors' Association is a great organisation for those who want access to advice and information from a range of industry experts and partners. 



Mathieu Holt- Managing Director, The Tenancy Practice Service & TPS Credit Control
Through the Association I found the channels and methods to fund the purchase of property I never dreamed about. Grant Brown

All round it has been one of those things Neil and I felt was really worthwhile belonging to. We have learned so much it has just built our confidence in what we are doing.

Janice Bieleski
I read two articles in the monthly magazine that saved me over $5,000. That is my membership fee for the next 26 years and I am sure I will learn a whole lot more! John Duncan
Fantastic organisation. The networking opportunities are brilliant and provide us with information and opportunities that cannot be obtained anywhere else. We learn something new at every meeting and we've been in this game for nearly 20 years. Pauline and Gyanen Kumar

I find the information obtained from various APIA meetings very useful in guiding my own property investment and rental management.  I also enjoy the networking opportunities with like-minded investors.  I am inspired by other investors’ success and find the more experiences and knowledge that I share with others, the more confident I become.  

Thanks to all APIA event organizers and administrators for your brilliant work. 

Stella Shao

I like talking to people and learning from their experience because it gives me the confidence to invest well. I think it is a knowledge thing. I now know I am doing things the right way.

Stephen Weatherall

My APIA membership has become a total success.

Every time I attend a monthly or regional meeting I come away with so many useful and positive tips that have added value to my property investments and management.

Not only that, the website is a great place for practical advice and useful information. It has now evolved into an important resource for my business.

Talk about value for money! The discounts I have been getting at Bunnings when I present my APIA membership card have more than paid for my annual subscription!

Tim Duffett, Plan A Investments Limited