7 min read

Lending on the future Opes accelerate 360

Imagine you spot an opportunity to renovate and increase the cashflow of your rental property, but you have no capital to pay for the works? Catalyst Mortgages is a brand-new lending product exclusively for Opes Accelerate investors. Here’s how one investor used it to his advantage, explains property coach, Ilse Wolfe.


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Imagine you spot an opportunity to renovate and increase the cashflow of your rental property, but you have no capital to pay for the works? You have a vision for the end result but yet no funds to make it happen.

The other issue of course is that with high interest rates and removal of interest deductibility for existing properties, an average rent would deem most rentals negatively-geared these days.

In one exact case, by -$14,000, or -$265 as a top-up per week required from the landlord’s pocket.

Stuck in the middle with no funds to improve the performance, but also not able to afford the rental otherwise, most investors would give up and sell up.

Not when working with Wolfe at Opes Accelerate 360. Here’s how this investor used an innovative lending solution to fund the renovation by lending on the property’s future value.

Opes 360

First, find equity

The price of $415K for a central New Plymouth stand-alone 3-bed house on subdivisible section, with great school zoning, was an incredibly special deal.

Wolfe was aware of some significant new-build developments in close proximity which would positively rub-off on the run-down target property at stake.

“True market value, even in its run-down state, was $500k, and by playing the long game, submitting offer after offer, the vendor finally cashed-out of a previous contract. This created instant equity for our first-time investor,” Wolfe says.

“As we say, you make your best money going in to the deal, and here was $85k equity made simply by not moving on too quickly.”

“A fantastic return from a few conversations and Sale and Purchase agreement mark-ups!”

Wolfe worked closely with a registered valuer contact to ascertain this initial margin, as well as calculate the future value of the property following the planned renovation her client wished to implement.

360 lending

The valuer confirmed an end value of at least $670k. The investor at this point knew a total minimum equity gain, and from this could deduct a renovation spend in keeping with the final 60% LVR rule.

Wolfe and her client could then calculate an appropriate renovation spend, while the remote power (building) team ran the on-site feasibility for the physical work.

“We quoted the renovation to be $65K, which would bring the property’s value of $500k up to $670k,” Wolfe says.

Enter Catalyst Mortgages, which then funded the $65k renovation spend based on the future registered valuation and future rental appraisal.

This meant there was a whopping $190k of net equity to gain following the renovation, with a max LVR of $402k on the property, and therefore an end top-up of $153k to be re-drawn out if the investor wished.

Almost their full purchase deposit amount.

Second, renovate

In this case, the renovation centred around a dining room to 4th bedroom conversion plus a second toilet, as well as remove unconsented works throughout the house.

“There were existing french doors onto a patio, which made for a nice private deck for this 4th bedroom,” Wolfe says. “Removing an unconsented wall in the garage provided the investor with a pre-hung door for this new room, too.”

Lending on the future

The dining conversion worked well, adding a new wall against the kitchen. This facilitated a brand-new kitchen design with additional function to accommodate the higher occupancy expected.

The hot water cylinder was upgraded to 235L, which futureproofs the home for additional people.


Importantly, cosmetic refreshes and the other Cashflow Hack principles were applied throughout. As pointed out by the valuer, consistency of style adds value, while inconsistency detracts.

Wolfe says as a large home near schools, the original bath was kept as a part of the bathroom aesthetic upgrade.

The end game: cashflow

As a result of the 4th bedroom, 2nd toilet and cosmetic upgrades, rent leapt from just $450 per week, to $690 (a $240 per week increase).

This is an increase of +$12,480 for the coming year, than if left as the earlier 3 bed rental. Even with the cost of the additional funding, the net pre-tax gain per week meant that the investor could extract maximum lending and extract deposit to look for a next opportunity.

cashflow hacking

In this case, the tenant is a registered social housing provider. The majority of the previous negative gearing is neutralised and the investor can look to the future more than mind their pocket.

This is $12,480 of additional rent and servicing that was unlocked by Catalyst Mortgages.

With 100% debt on the purchase of the property, plus the renovation funding, the rent now provides a 7.5% return, which is almost unheard of for a stand-along property purchased in this current market.

A tough market

Wolfe says, it’s important to remember that this renovation was completed in a tough market.

This investor, like many others, was struggling with hefty interest rates, interest deductibility law changes – and feared he may not be able to hold this property without the upgrades being made possible.

“Starting with such a strong gross yield of 7.5% will lead this investor to enjoy passive net income sooner than those who are otherwise suffering through low yields and high negative gearing.”

“All things considered, this rental and value uplift, enabled this investor to hold on to his existing property, as well as purchase another….overall, he’s much better off.”

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It’s important to remember not everyone is going to have these exact circumstances.

For instance, not everyone is going to have a substantially large subdivision happening around the corner to conveniently pull the value of your property up.

”But this is an example of what you can have,” she says.

“We can see things that most don’t.”

Opes Partners
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Ilse Wolfe

Former Renovations Coach at Opes Accelerate. Property Investor for 15 years.

Ilse Wolfe is a property investor and the former director of Opes Accelerate – a coaching programme for renovations-focussed investors.

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