Hi all,
I’m brand new to this idea, but very excited. I read Steve’s book – fantastic, inspiring and very easy to read.
I have a few general, probably obvious, questions. I’d be grateful for any replies to any of them.
When Steve writes about cash on cash return, is he talking about net return? If so, does he include in that costs such as maintenance, rental manager if necessary etc? When I look at his settlement statements I can’t see anything about legal fees eg for conveyancing. Am I missing something?
Can you use a deposit bond to buy a property more quickly? Do you know how these work?
Do you ever pay less than 20% deposit for a residential property? What I mean is, have you ever found any deals where the mortgage insurance for a deposit less than that has been covered by the return on your investment?
That’s about it for now.
Thanks for any help you can give me.
Cheers – Mel
Hey there Mel. Welcome to the gang. Hope you have many fruitful years here.
Cash on Cash……Whatever money Steve has in the deal vs How much he makes after costs.
eg. Deposit of $10k with after costs return of $1500/year is a 15% cash on cash return. Remember in many cases Steve is wrapping so his deposit is largely refunded by the wrappee when they pay their deposit to Steve to buy the house.Deposit bonds are something I have never used. I prefer to only spend what i have and the most i have ever put down on deposit is $5K and most of my deposits are closer to $250.
I have had 10% down loans and evem including the LMI it has made money. I now prefer to only put down 20% as it makes it easier to keep on getting loans.
Hope this answers you quetions…..any others or need clarification ……fire away……..
Enjoy
AD [:0)]
(Andrew)It is good to have an end to journey toward, but it is the journey that matters in the end.
The topic ‘general questions’ is closed to new replies.
