Brady what happens when you client runs out of serviceability with the one lender, or runs afoul of that lenders risk tollerance? Your employer is certainly a good lender, but there's lots of things they won't do and the serviceability is good, but nowhere near the most generous.
I have a client who's gone from 3 properties to 16 in 6 years and is still purchasing more. He consistantly purchase using 90% with total debt levels of around $5M.
This is not something you can achieve using a single lender.
Straight from by CBA relationship managers mouth:
* Branches can usually get things done faster.
* Brokers give far more diverse advice and can put together a far more comprehensive lending structure.
* For 90% of cases, neither group actually understands or plays to their strengths.
Back to that client though. He doesn't think he's done anything special, but he has found a strategy which works for him. Whilst many of the specific numbers are different from what Jake has indicated, the overall methodology is what I've seen in every successful client.
* Buy under market value
* Find ways to add value
* Diversify when you can
* Take advantage of capital growth
Just because they're a CBA RM doesn't mean they get it right. My client yesterday, he is a paediatrician and also runs a private practice, his wife is a obstetrician. has $700k in borrowings with CBA, just gone throught the process of getting approval for $4M commercial property in the last few months in this process he dealt with RM's and State Managers. Yesterday I told him how he had been banking for the last 15years was completely wrong (x-coll, LOC with mixed purpose business, personal and investment, no offset fully repaid 2 houses). He just about fell off his chair after I ran through everything with him and he made comment that he is off to fire his accountant who he has been using the whole process.
Your third comment contradicts the second comment. Brokers have the ability to give diversed advise, this doesn't mean that they do and doesnt mean they get it right.
As for running out of serviceability yes this happens, I haven't had a senario yet where is has happened and it wasn't able to be mitigated if it was actually a deal.
In the last 2 years i've only had 2 loans that I couldn't get approved that were approved elsewhere.
- First one I didn't want to touch in the first place, bad conduct on accounts, weak application and didnt believe he was being all that honest with me... But it was a branch managers friend... scored a CAT 5 and was declined by credit after large appeals from the branch manager
- Second one was a NAB branch manager who came to me because she new that I could get it done, in the end I could but I couldnt get the LMI waived like NAB as she was staff so she ended up changing the structure and went there
Every other time I had an application that I haven't been able to get done, I've passed it onto brokers (most of the time without putting in an application to keep credit file in tact) and each time the broker hasnt been able to get finance for these people..
I dont care to comment for the general bankers or brokers because as we both agree so many get it wrong. There are multiple times that we could both comment on bad stories done by each, terrible stories done by each.
But I don't make claims that all brokers are bad. I defend the claim that so many on this site say no bankers at all, no doubt its because of poor past performances.. but it happens in both ways.
*I can I can put together a comprehensive lending structure (yes with the one bank, but doesn't mean it cant be done. Still able to hit 90% early 80% later, no x-coll, IO offset (soon to be transactional
)... hitting a hurdle with genworth cant be a stopped but im still yet to have something that I believe is a deal declined, when this time comes I will happily pass the client over to a trusted broker to see if they can assist, again its yet to happen.)
*I can tell you that I could get things done faster then any broker 99% of the time, the team leader and manager of document preparation know me very well, I contact them often. The team leader and manager of certifications know me best
.
*The credit appeals manager knows me well, again we speak most weeks.
What I'm suggesting is that you must have someone who you can trust, who is honest and who has the ability to set your loans up correctly... And obviously get the loans approved.
The client I gave an example of wouldn't of been able to do what he did if he didn't deal directly with the bank and went through a broker. Each purchase and sale he has made has had to be done extremely quick, this is where he has been able to purchase so much below value with quick settlements. He uses a coveyancer who I used for my own property, who I personally know. Just about each deal I've had to speak with my contact in each different area to get things done.
I'm not saying this to bignote myself, I have no commerical interest in these comments. Just giving you guys insight to the other side