By Cam Harper*
As we read all the headlines about record inflation rates, OCR increases, equity market falls and house price swings, it can be difficult to know which direction to invest.
That means it’s more important than ever to get good financial advice and track your investment options.
Owning property has always been a fairly safe way to make money in New Zealand, with relatively little risk and not too much down payment.
But as the housing market changes the bright light test remains and landlords must adhere to things like healthy home standards, owning property outside of the family home isn’t as enticing for many Kiwis. .
These changes to the New Zealand economy are part of the reason my team and I are so focused on providing investment choice to Kiwis with good returns and tangible security.
Investing in real estate without owning
Gone are the days when you had to own property to make money from New Zealand homes.
With over 25 years of experience, we manage a specialist lending division that identifies high-quality, short-term lending opportunities for construction and residential housing projects.
When a loan application passes internal approval processes, we lend our own money to the owner and then load the loan into our online investor portal.
We lend at conservative loan-to-value ratios of up to 65% of completed value for construction projects and up to 70% for residential refinance. This gives investors a buffer if things change during the life of the loan.
It is these loans in homes and building projects that Kiwis invest in. The Kiwis do not invest in Southern Cross Partners. Instead, they choose the specific project in which they want to invest their money.
Currently, investment interest rates start from 6% per annum, but are subject to change and availability.
Click here to see your potential investment earnings.
How we buy investments for you
Most of our loan applications go through mortgage advisers that we have worked with before. Generally, our clients cannot get loans through banks for legitimate reasons and come to us for a short term loan to complete them.
An example of this is a couple who had purchased an investment property off the plans through their trust.
The property is a townhouse and they had pre-approval from the bank. After paying the deposit, there were construction delays, and by the time the townhouse was completed, the bank’s appetite had changed and they were unwilling to finance the purchase.
The couple had to settle down, but the bank wouldn’t give them a loan. They got a short term loan with us, secured the townhouse, got everything in order and went back to the bank.
We are very careful who and what we lend to. When mortgage professionals submit loan applications to us, we look at four main elements to assess whether it is suitable for our investors.
A clear exit. We need to know how a person will get out of their loan with us and when that will be. Ultimately, it’s about making sure people can repay their loans at the end of their loan term.
Realistic refunds. We are looking to see if the person taking out the loan can easily make their repayments with us.
Loan to value ratio. The difference between the value of a property and the amount we lend gives us a buffer in case the property should sell unexpectedly.
Current valuations. Sometimes we will have an independent evaluator involved and other times we will have enough data from other sources. Most importantly, we can explain to our investors how we decided on the valuation.
This conservative approach to lending has served us and our investors well over the past 25 years to learn more about Southern Cross Partners’ investment opportunities. vslick here.
Disclaimer: All investment opportunities are subject to change and subject to availability. Southern Cross Partners Ltd is licensed to provide peer-to-peer lending services under the Conduct of Financial Markets Act 2013. This article is general in nature only and has not taken into account any particular person’s goals or circumstances. We recommend that you consult a financial adviser before making any investment decision.
* As Managing Partner of Southern Cross Partners, Cam Harper leads both the firm’s lending and investment activities. He is passionate about helping New Zealanders achieve true financial freedom through specialist loans and secure investments.