How to release capital or generate cash?

[Bad_azz]

As an example all our capital is tied up in our house...
But I have just been informed of a great land deal not far from us.
Initial checking etc looks good that it is all "benar" and a genuine sale. & SHM.
They want only 250juta for it, yet I reckon we could fit 5 houses on it in 200msq plots & still have some land spare.

So- is this where I go to the bank and borrow against the collateral of my house?
Seek private investors- never been big on that way of working though.

What suggestions do you have or options are open to us to get this land sharpish.
TIA
B_a

 

[fastpitch17]

As an example all our capital is tied up in our house...
But I have just been informed of a great land deal not far from us.
Initial checking etc looks good that it is all "benar" and a genuine sale. & SHM.
They want only 250juta for it, yet I reckon we could fit 5 houses on it in 200msq plots & still have some land spare.

So- is this where I go to the bank and borrow agains the collateral of my house?
Seek private investors- never been big on that way of working though.

What suggestions do you have or options are open to us to get this land sharpish.
TIA
B_a

Good luck with whatever you are thinking of doing. I have known a few Westerners located her with WNI wives as their sponsors, both KITAS and KITAP holders who have approached banks they had accounts in and were just told up front they couldn't loan them money. All were employed locally too. Not sure what the banking rules are but they don't seem to favor Expats at all. I think the private investors may be your best option but choose very carefully who they may be.

 

[Bad_azz]

Good luck with whatever you are thinking of doing. I have known a few Westerners located her with WNI wives as their sponsors, both KITAS and KITAP holders who have approached banks they had accounts in and were just told up front they couldn't loan them money. All were employed locally too. Not sure what the banking rules are but they don't seem to favor Expats at all. I think the private investors may be your best option but choose very carefully who they may be.

Well, when I say "I" ... I mean himself, not me - hahah yeah, I can imagine the reaction of me going to the bank- goldfish gobs.

 

[fastpitch17]

OK, good luck. At least with the bank you won't have to share.

 

[Bad_azz]

OK, good luck. At least with the bank you won't have to share.

This is true- but they will want their pound of flesh for it

I don't mind sharing -I'm not greedy

 

[Davita]

Re: post # 1 by Bad_azz.

Having all capital in one investment is not good...most economists/financial planners will advise diversity.

I've used collateral loans on property from banks in N. America to invest and the arrangement was lucrative as it had tax advantages for me... but I doubt that would be available in RI.

A collateral loan can be for a fixed amount and period or an accumulating loan for an indefinite period...they will both have different interest rates which will be your critical decision to make.
Alternate could be getting a mortgage...this will be for a definite time-scale and include monthly pay-back...but the interest should be considerably less.

In my experience, these days, banks will rarely lend more than 50% of the appraised value on property. Those toxic loans on property in the USA still rebound around the global banking sectors.

 

[centurion]

You can go to a bank and put your hose as a collateral. Usually bank allows 70% loan based on collateral appraised by a licensed appraisal.
You have to prove regular income of your Indonesian spouse (salary slip,confirmation letter from the company). Your spouse have to show to the bank the prenup.
Better is to use a regional bank because the criteria for loan approvals are more flexible.

 

[Bad_azz]

You can go to a bank and put your hose as a collateral. Usually bank allows 70% loan based on collateral appraised by a licensed appraisal.
You have to prove regular income of your Indonesian spouse (salary slip,confirmation letter from the company). Your spouse have to show to the bank the prenup.
Better is to use a regional bank because the criteria for loan approvals are more flexible.

thanks for the details Centurion
I was thinking more as a business loan- rather than a personal loan so instead of payslips etc... I guess business plan and projected costs and profits would be more apt for that?

 

[Bad_azz]

Re: post # 1 by Bad_azz.

Having all capital in one investment is not good...most economists/financial planners will advise diversity.

I've used collateral loans on property from banks in N. America to invest and the arrangement was lucrative as it had tax advantages for me... but I doubt that would be available in RI.

A collateral loan can be for a fixed amount and period or an accumulating loan for an indefinite period...they will both have different interest rates which will be your critical decision to make.
Alternate could be getting a mortgage...this will be for a definite time-scale and include monthly pay-back...but the interest should be considerably less.

In my experience, these days, banks will rarely lend more than 50% of the appraised value on property. Those toxic loans on property in the USA still rebound around the global banking sectors.

Cheers Davita.
My house would definitely be worth more than double the loan.
Having enough collateral, I am not worried about.
I was interested to know how these things are dealt with in Indonesia, probably much the same as elsewhere I guess..

 

[Davita]

Cheers Davita.
I was interested to know how these things are dealt with in Indonesia, probably much the same as elsewhere I guess..

Cannot help as I'm only familiar with foreign banks including HSBC Premier in Jakarta.
I'd suggest, if looking for a business loan for a start-up company, it's best to establish a relationship with your local regional bank manager. They usually have more freedom in lending.....or can advise if the RI Gov't have such schemes to assist.

Generally it's not advisable to mix business and personal accounts. That's why they have PT and PTPMA's.... these are Limited Liability Companies to protect the person from any default in the business.
You wouldn't want anyone to take your house if your business defaults on the loan.

 

[centurion]

Usually a bank will give a business loan only to a company, not to individual, and than it will consider cash flow projections, business plan etc.

 

[Smallworld]

Maybe this one will give you a glimpse how it works.

Home Ownership Loan KPR Refinancing

Need quick, easy, convenient, and safe funds for your personal needs? KPR BCA Refinancing is the answer. By providing your house, business, or apartment as collateral, KPR BCA Refinancing can help solve all your financing problems.


Benefits
KPR BCA Refinancing can help you finance your personal needs, from healthcare, education, and wedding cost.

• Low and stable interest rate and light installments ensuring you have all your needs fulfilled.
• Easy requirements
• Penalty-free KPR BCA Refinancing (except for Fix 3, 5 Tahun, Fix & Cap interest) for partial/complete loan acquittal

Syarat dan Ketentuan
There is always a way to make dreams come true. Get the funds to enrich your life by fulfilling these easy requirements.

Conditions	Terms and Conditions
Applicant	Indonesian citizen, minimum 21 y/o or married, full time employment, entrepreneur, or professional.
Length of employment/business	Employee Length of employment: minimum one year with previous employer or total work experience of two years Entrepreneur and professional Length of business experience: minimum two years (in the same field)
Maximum age when loan period expires	Employee: 55 y/o Entrepreneur/professional: 65 y/o.
Installment amount	Installment calculated from gross income (spousal income may be combined)
Insurance	Must include life and fire insurance with banker’s clause conditions.
Agreement	Willing to sign loan agreement and Imposition Mortgage Deed (APHT or Akta Pembebanan Hak Tanggungan).
Payment	Installments automatically debited from BCA account.

and much much more info below.....(I am unable to copy and paste here):

http://www.bca.co.id/en/Individu/Produk/Pinjaman/KPR-Refinancing

 

[Bad_azz]

Cheers for that Smallworld.