What To Do When The Banks Say No

If you are having a hard time funding your property portfolio, then you are not alone. According to Nathan, it can be quite a challenge to obtain finance after purchasing your first few properties.

He himself was knocked back by the banks after property number five.

But now, he helms a portfolio more than 200 properties strong – and he is still going.

He shares some tips below on what to do when the banks say no.

Tweak your portfolio.

There may be some small changes you can make to improve your serviceability so you can borrow more.

For instance, you may be able to improve your income by raising rents on your properties, or getting an extra job.

Refinancing to a loan with a cheaper interest rate may also help your bottom line and put you in a more favourable borrowing position.

Buy strategically.

Nathan says it is possible to tailor a purchasing strategy that can help you move forward with your investing. If you have reached a brick wall and can’t borrow enough to buy the next foundation property, it may be possible to buy a cheaper one with a positive cashflow. 

For example, he recently helped an investor who got stuck with a funding issue that prevented them from investing in a bulk deal. He attached another property to the deal that was only $50,000 and had a rental income of $200 per week. This improved the investor’s servicing which then enabled them to buy the initial property.

Sell off some assets.

If you have an expensive car or a boat that isn’t helping you achieve your financial goals, then it may be worth considering your options. By selling off some unneeded assets you may be able to increase your deposit size by a considerable amount.

Speak with a finance strategist.

Instead of shopping around at different banks and putting your credit rating at risk, it is advisable to speak with a finance strategist who can assess your situation and help you move forward. 

How have you overcome your lending issues? Please share your experiences in the comments section below.