A 61-year-old business consultant and Group Principal of 12 entities, based in regional NSW, approached VMG seeking an investment property loan. His financial situation was complex. Despite this, VMG was able to help him secure a loan that exceeded his initial expectations.
Loan Amount: $1,700,000
Purpose: Residential Investment Property Purchase
Location: Regional NSW
How VMG Helped:
The client initially sought $1.5 million to finance a residential investment property. However, through careful assessment of his financials and by leveraging their expertise, VMG was able to offer a more substantial loan of $1.7 million.
Although 11 of his corporate entities had reported net losses as of 30 June 2023, VMG used the net profit from the one profitable entity, totaling $180,000. In addition, VMG strategically applied various addbacks across the entities, totaling $540,000. They also factored in rental income from five existing investment properties, the future rent from the property being purchased, and a negative gearing benefit. In addition, VMG shaded rental income at 85% (above our usual guidelines of 80%).
Crucially, while personal mortgage commitments were included in the servicing calculations, VMG successfully excluded debts related to the corporate entities, further enhancing his borrowing capacity.
Outcome:
Through VMG’s tailored approach, they were able to secure a loan for $1.7 million – exceeding the client’s initial request of $1.5 million. By structuring the loan with a 30-year term, including three years of interest-only repayments, VMG provided the client with both the funds and the flexibility needed to confidently move forward with the investment.
If you have clients with similar complex financial scenarios, reach out to your BDM to discuss how VMG can assist in structuring a solution that works for them.
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