4 C's of Lending | Property Investment

Property Investment Finance Series: Video 2

What Are The 4 C's of Lending?

Most people have heard of the 4 C's to diamonds - Cut, Clarity, Colour and Carat. Successful investors also know the 4 C's of lending.

Robbie Turner, Axon Property Group Tweet


My trusty little traffic light over here says you’re going to need four green lights, no red, no amber. How do you stack up as far as the finance goes? Because you can have all the intent in the world, but if the numbers don’t stack up it ain’t happening. 

Let me step you through it now, so that you know how the banks work which will ensure you are prepared.

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It is bloody hard to get finance for a property these days and for that reason when you go on to secure your finance, the number one person you need on your team is the mortgage broker. Why do we use a mortgage broker? Generally, they’re going to be an investment lending specialist and they’re going to have access to multiple lenders and be able to provide you with multiple valuation. That means that it gets you the very best result for you when you’re setting up your finance structure as well.

Then they can do quick and easy loan comparisons. There is dozens and dozens of lenders out there and they’re able to sit down and compare each of those individual loans to meet your specific needs, and that’s what they do. They provide that expert advice on a finance structure that’s specific to you, so you need them on your side, you need to give them all the intricate details so that they understand exactly what’s going on in your life and set up your finances to suit.

If required, they can also provide you with a finance pre-qualification letter only if it’s required by the developer or the builder to get you over the line. Make sure you’ve got a top class mortgage broker there and they’ll make your life a hell of a lot easier.

Did you know the game of property investing is not a game of real estate, it’s actually a game of finance and numbers? So how is it you’re going to be able to secure finance to make sure your 80 of property investment portfolio can grow safely?

It all comes down to the four C’s of lending. My trusty little traffic light over here says you’re going to need four green lights, no red, no amber. Every single coaching session we do with our clients, we do this this little war game, we do this little stress test. How do you stackup as far as the finance goes? Because you can have all the intent in the world, but if the numbers don’t stackup it ain’t happening. Let me step you through it now.

The first thing you need to be able to demonstrate to the banks is that you have deposit and casts set aside, and that is capital, which is cash, or collateral which is equity. So you need to be able to basically say that when the banks you up to 80 or 90% you can tip in the other 10 or 20%, as far as the deposit and costs go.

As you’ll move across here, you also need to have the right employment, be of the right age, have the right spending habits and online character as they call it. Banks love defense members. So don’t be too concerned there. As long as you’re not having Uber Eats, or going to the casino, or some dirty online habits there too much, then you should be fine about getting that element of your four C’s sorted out.

The next thing you need, little bit like opinions, little like our souls, everyone’s got one a credit rating and a credit history. Make sure you pay your bills on time there so you’re not stuffing a few things up.

The last one, I suppose this is when it really matters. If you can’t have the capacity to borrow the money and service the debt, because maybe you’ve got a couple of credit cards, you’ve got a high purchase loan, you got a couple of kids, the Mrs. is not working anymore, whatever it’s going to be, then basically you’re going to be stuck at the top here.

As I said at the start, you need four green lights. No amber and no red. Get your finances in order, and you will be successful.


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