Is it possible for 4 unrelated friends to get financing on one property?

[maximusprime]

Wow, lots of good advice to reply to.
As far as soup dragons comments. The size of the venture will be 8-10 million Dhs. Eventually as the property apreciates and we gain money to play with I envision it becomming a business venture but that is just speculation at this point.

Good idea about the OD roshan, my only concern would be that one person will be risking much more than the others.

After reading the comments I started to get another idea, let me know what you think about it. By buying several 1 bedrooms like you said, we could possible get a 15% discount. That would mean 15% instant equity. Our problem is that none of us has money for a downpayment which convieniently enough is about 15%. Could each of us get personal loans for the downpayment, then upon purchasing the properties, have them appraised and refinance for the price paid plus the extra 15% to pay off the personal loan? That way we would consolidate the personal loan and the mortgage and avoid having two payments.

We are not from dubai, we're three Americans and an Englishman. I am very interested in the property scene here and I would be glad to attend some meetings. Thanks again for all the good tips, keep em comming.

Max

[Roshan]

Originally Posted by maximusprime

Wow, lots of good advice to reply to.
As far as soup dragons comments. The size of the venture will be 8-10 million Dhs. Eventually as the property apreciates and we gain money to play with I envision it becomming a business venture but that is just speculation at this point.

Good idea about the OD roshan, my only concern would be that one person will be risking much more than the others.

After reading the comments I started to get another idea, let me know what you think about it. By buying several 1 bedrooms like you said, we could possible get a 15% discount. That would mean 15% instant equity. Our problem is that none of us has money for a downpayment which convieniently enough is about 15%. Could each of us get personal loans for the downpayment, then upon purchasing the properties, have them appraised and refinance for the price paid plus the extra 15% to pay off the personal loan? That way we would consolidate the personal loan and the mortgage and avoid having two payments.

We are not from dubai, we're three Americans and an Englishman. I am very interested in the property scene here and I would be glad to attend some meetings. Thanks again for all the good tips, keep em comming.

Max

What if you pay the down payment and you do not secure the mortagage. It would lead to distress, isn't it.

Start working early on a project, study who are providing the finance. My advice would be to secure your pre approval from the finance house first so that the distress aspect is eliminated.

If you pay the down payment and you don't get the finance, you are definitely looking at distress, considering you have a shortage of cash.

Getting a mortgage is not as easy as the UK or USA. It has so many hassles and getting finance from the bank could be like hitting your head against a wall.

Conclusion : Get your pre approvals in place so that you are assured to get 85% or whatever and then look at getting the 15%. It's like working backwards isn't it, but that's what Dubai is all about.

Keep thinking, see that, you already have 1 solution. Keep thinking and by the end of the week you might have seven. Not all might work, but who knows one of them might just work.

Keep us informed.

Regards

Roshan

[The Soup Dragon]

Maximusprime. I’m not an expert on finance providers in Dubai, but I know that British lenders typically look to provide finance on the lower of the property’s worth and the sale price you are paying. If that’s what happens in Dubai (and I’d be surprised if it wasn’t) then your plan will not work. You would likely need to complete on the property and remortgage in order to release equity.

Roshan. I’m UK based and not looking to invest in Dubai. Wouldn’t normally have ventured into this part of the forum, but spotted maximusprime’s thread name when logging in and thought I’d have a look.

[maximusprime]

Originally Posted by The Soup Dragon

Maximusprime. I’m not an expert on finance providers in Dubai, but I know that British lenders typically look to provide finance on the lower of the property’s worth and the sale price you are paying. If that’s what happens in Dubai (and I’d be surprised if it wasn’t) then your plan will not work. You would likely need to complete on the property and remortgage in order to release equity.

Roshan. I’m UK based and not looking to invest in Dubai. Wouldn’t normally have ventured into this part of the forum, but spotted maximusprime’s thread name when logging in and thought I’d have a look.

Soup Dragon,
That is basically what I was I was thinking. Get the mortgage, then immediately refinance to pay off the personal loan.

[Roshan]

Originally Posted by maximusprime

Soup Dragon,
That is basically what I was I was thinking. Get the mortgage, then immediately refinance to pay off the personal loan.

Sounds OK if the bank gives you the amount of mortgage which you require.

Regards

Roshan

[iloilo]

Originally Posted by Roshan

What if you pay the down payment and you do not secure the mortagage. It would lead to distress, isn't it.

Start working early on a project, study who are providing the finance. My advice would be to secure your pre approval from the finance house first so that the distress aspect is eliminated.

If you pay the down payment and you don't get the finance, you are definitely looking at distress, considering you have a shortage of cash.

Getting a mortgage is not as easy as the UK or USA. It has so many hassles and getting finance from the bank could be like hitting your head against a wall.

Conclusion : Get your pre approvals in place so that you are assured to get 85% or whatever and then look at getting the 15%. It's like working backwards isn't it, but that's what Dubai is all about.

Keep thinking, see that, you already have 1 solution. Keep thinking and by the end of the week you might have seven. Not all might work, but who knows one of them might just work.

Keep us informed.

Regards

Roshan

Well said, Roshan.

My initial venture before the Business Bay venture was exactly the way you said "it would lead to distress". It is also important that the mortgage pre-approval you secure with a certain bank may not be applicable when you buy a unit with a certain developer. Remember, ask the financing bank the names of approved developers in their list - get this confirmation in PRINT. I had one of the sales guys of a certain bank verbally confirming certain names of developers being on their approved list of developers when the actually it was not so on enquiring with their main branch.

Also, I would advise all you investors/guys to keep some cash handy in case you get the developer suddenly telling you that the area of your unit size has increased due to regulations of TECOM/civil defence/blah/blah whatever but it has increased in size and you now have a revised payment schedule/value as per the size increase.

[Roshan]

Originally Posted by iloilo

Well said, Roshan.

My initial venture before the Business Bay venture was exactly the way you said "it would lead to distress". It is also important that the mortgage pre-approval you secure with a certain bank may not be applicable when you buy a unit with a certain developer. Remember, ask the financing bank the names of approved developers in their list - get this confirmation in PRINT. I had one of the sales guys of a certain bank verbally confirming certain names of developers being on their approved list of developers when the actually it was not so on enquiring with their main branch.

Also, I would advise all you investors/guys to keep some cash handy in case you get the developer suddenly telling you that the area of your unit size has increased due to regulations of TECOM/civil defence/blah/blah whatever but it has increased in size and you now have a revised payment schedule/value as per the size increase.

There you go. Well said iloilo. Each developer will have a list and most important all your correspondence is in writing.

I learnt the heard way with the so called best developer in town. My bank papers were in process, I was going on leave. The bank assured that the papers would go through before the stipulated date for the second payment. On the other side developer told me that since your finance is under process, no penalty will be charged. I did not take this in writing. Had I done that as iloilo said, I would have been safe.

I came back and guess what, I was charged 1% late penalty fee even after the developer told me verbally that I would not be charged.

Moral of the story : Get everything in writing.

Regards

Roshan

[maximusprime]

Originally Posted by Roshan

I have or will be posting a seperate thread " Amlak easy start plan ". Pls go through that.


Good luck.

Roshan

Hey Roshan,
I took a look at the plan, not bad for someone like me though it seems very similar to the lending that was going on in the US over the past few years which led to the mortgage meltdown. I suppose if you buy and sell quickly it could pay off. I am a little unclear about the 4% premium. Does that mean if you sell and pay off the loan you have to pay an additional 4% (ouch!)?

I went over the "Buyers Army" plan as I call it with my friends/partners and it was well recieved. It seems like a better idea because of its simplicity and the fact that each person is free to do what they want with their share. The more I think about it the more I like it. I am thinking of promoting it in earnest to get more people and more bargaining power. Strength in numbers, all for one one for all.

This is where I have another question. What do you think is the best way to approach a developer with this idea. This part is a bit intimidating becase this is what the whole plan hinges on. How do you think I should go about negotiating a discount with these people? Are they usually receptive to the idea of such a discount and can it be done on completed units or close to completion?

Thanks again

[Roshan]

Originally Posted by maximusprime

Hey Roshan,
I took a look at the plan, not bad for someone like me though it seems very similar to the lending that was going on in the US over the past few years which led to the mortgage meltdown. I suppose if you buy and sell quickly it could pay off. I am a little unclear about the 4% premium. Does that mean if you sell and pay off the loan you have to pay an additional 4% (ouch!)?

I went over the "Buyers Army" plan as I call it with my friends/partners and it was well recieved. It seems like a better idea because of its simplicity and the fact that each person is free to do what they want with their share. The more I think about it the more I like it. I am thinking of promoting it in earnest to get more people and more bargaining power. Strength in numbers, all for one one for all.

This is where I have another question. What do you think is the best way to approach a developer with this idea. This part is a bit intimidating becase this is what the whole plan hinges on. How do you think I should go about negotiating a discount with these people? Are they usually receptive to the idea of such a discount and can it be done on completed units or close to completion?

Thanks again

See that, the more you think about it, the more interested you get. If you are talking of the Amlak-easy start plan, an early payment would draw a 4% early repayment charges.

You can approach the developer and talk about buying a full floor. Don't forget you are in the drivers seat and in simple words " pure royalty ". If you don't ask you don't get. Learn how to twist arms, it works.

Another idea which just got to me. Have you thought of taking an over draft on the deposits you have in the bank. Banks usually lend upto 60% of the total value which you can pay whenever you want as long as you have your money with them.

The best way with the buyers army plan is to collect cheques from all the people who want to invest so that they will not drop out and what they call earnest money - OR - EOI ( expression of interest ). If one drops it could be trouble as you know.

Discounts can be got on completed or ready to be completed units...and don't forget the person who mentions the first price looses. Never commit a price and always wait for the price to come from the other side.

Good luck

Roshan