Hi, my name is Roger Francis and I am currently a self employed Handy man with a good income per week of around $2400 including being maintenance person for many organisations and with regular employment.
I ran a cafe which went bust and still hold the lease which is amassing rent at $7000 per month for which I am 3 months in arrears.
I need advice on how to go about applying for a home loan to cover this and future rent and to buy a house at the same time?

Evening Roger,

Good on you for reaching out and asking the question.

Good on you for getting out there and have a crack & generating a solid income.

This two biggest thing lenders would be looking out for us
1. You current income & how you are able to demonstrate it - eg Tax returns, pay slips. ATO Notice of assessment - or if you have been self employed for longer than 6months there may be other options (BAS, bank statements and even a letter from the accountant)
2. The amount of cash you are looking to contribute towards the purchase of the property. Most lenders require you to put a deposit/ plus costs towards the property that would usually represent about 5-7% if he property value.

Hopefully that gives you a starting point on your property search. If you already have this covered, let me know and I can take you through the next step.

Hope that helps

Regards

Craig Nicholas
0481 383 490
Nicholasfs.com.au

Dear Roger,

I would recommend that you speak to your landlord and come to an arrangement with them to try to re-assign the lease to someone that want to run the cafe. If that is not possible, try to speak to some agents in the area to see if they can find new tenants for the property.
I am not a lawyer but from my understanding you are liable for the rent until the end of the lease. This will cause you issues as the landlord could take legal action against you.
I suggest you speak to a lawyer and see if you can come to a satisfactory arrangement with the landlord as per above.

In terms of the loan, we can look into it once you have the above issue under control.
regards

Hi Roger,
I am sorry to hear that your cafe went south, but I commend you on digging in and trying to get back on your feet.
Have you made a pay out offer to the landlord? I would be trying to negotiate a 3 or 4 month settlement that gets you out of the lease permanently rather than waiting for them to find a tenant. There is no motivation for them to advertise if you keep paying monthly.
A property lawyer might be able to shed some more light on your options.
If you can’t pay out the lease, the rental obligation will stop you from purchasing your home until it is finished so it could even be worth paying more to clear the commitment.
You are in a tough spot and I would highly recommend seeking individual advice
Best of luck
Scott

Hi Roger, here are some comments that I have thought of:
1: Get yourself set up on a proper accounting package, it will reduce your bookkeeping time by an enormous amount. I recommend MYOB Essentials to most clients, but Xero and Quickbooks all do the same thing. they are dirt cheap compared to the cost of an accountant to do your financials and tax.
2: if your landlord has been notified that you wish to terminate the lease I think you will find that they are obligated to make a proper effort to replace you. ie if you know that they will get someone else to take over the lease then you are not necessarily locked in for the entire term of the lease.

It seems reasonable to conclude that no bank will touch you with a bargepole whilst you have a $7000/month obligation to service. Also self-employed people with a short trading history is going to make finance even harder.

It is clear you need to get advice on the cafe lease. Talk to a commerial lawyer about your options.

good luck
Brendan