the mardent group finance

The Mardent Group

Finance

Overview for Presentation

Highlight the strategy financiers use to cross collateralise

Demonstrate strategy to increase property portfolio via “splitting of financiers”

Construction loans and renovations with finance.

Fundamentals of Commercial lending Difference from residential lending Fundamentals of how interest margins are calculated Hand out review

Industry Update

Interest Rates will increase over 2011.

Easing of credit on residential owner occupied and investment

95% products being re-released into the market Money markets have stabilized Financiers comfortable with valuations flattening but holding

Banks becoming competitive for market share in both retail and commercial markets

Traditional Structure (Cross Collateralization)

Bank

InvestmentValue $650k

Loan $300k

Owner Occupied

Value $600k

Loan $450k

Step 1: Asset Separation

Lender AOwner occupied

$600k

Home loan

separated

Lender BInvestment

$650k

Interest only

$300k

Line of Credit loan

$220k

Step 2: Using LOC facility

Line of Credit$220k Available

Deposit and costs for 2nd

investment $50k

New lenderValue $200kLoan $160k

Deposit and costs for 3rd

investment $50k

New LenderValue $200kLoan $160k

Step 3: Creating Equity

• Lender D• Investment

loan (5 yrs Interest Only)

• Lender C• Investment

loan (5 yrs Interest Only)

• Lender B• Investment

loan 2 splits• $120k in

LOC

• Lender A (home loan)

Value $600

k

Value $650

k

Value $200

k

Value $200

k

Construction and Renovating Minor Renovations

– No structural changes (cosmetic)– Use equity and re value at end of the process– Simple process

Borrowings on “total on completion valuation”.- Fixed Price Contracts - Easier Project Borrowing by switching to

commercial / development funding

Commercial Funding Difference between commercial and

residential lending– Assessment of a client

Template review

– Interest rate margin

– Risk analysis

– Commercial loans and review of facilities.

Thank You

QUESTIONS?????????

The Mardent Group PH: 07 3217 9233 FX: 07 3899 9519