Starting Out

Hi Steve,

Firstly, I have just read through your book in 2 days – I found it Extremly interesting and very much opens the mind beyond the typical stereotyped investment stratergies and weath creating vehicles…

Secondly, You reference Robert Kiyosaki – I read his book around a year or so ago.. again I began to be further intrigued by the disposition of creating weath trough the building of cash-flow positive producing assests.

Which bring me to my position…

Firstly, the concept of hunting down cash-flow positive properties in this very heated market of Sydney – can you advise if you (or if others) are succeding in finding cash-flow positive property in Sydney in this current market…(or greater metro area)

For my position, my Wife and I have a fully paid property in Kellyville… since I have grown up on the Northern beaches, this is the area that we are looking to move back to… in essence, we have already started our journey.

Over the last 12 months we have been looking for propery on the Northern beaches.. anyway, after alot of looking around, we got our finances in order, and we have just exchanged on a property in Cormer last week… the property is an older weatherboard 3 br home on 556sqm. we negotiated and closed the sale at $627,500… which after further analysis we belive that this is very much under the medium for the area. Rental return expected at min of $340/week (based on previous return)

For financing we are borrowing the whole amount + purchasing costs (also using some equity in our current property).

The purpose of the property is an initial investment with the eventual Idea to rebuild and move into it (putting our current property back on the rental market) Basically, this property initially will be cash-flow negative as a result… as such we are going to be ‘negative-gearing’ at least for the initial investment…

(I have achived my first goal to get my foot back into the area – the area where we will settle)…

After reading your book, it has further enspired me on following the Cash-flow positive method of property investment after my recent purchase.

With our current situation, our aim is to pay down the loan as quickly as possible – all surplus cash being channeled into the property…

As such, my next move would be to purchase a third property (second investment), as such, I was looking at a timeframe or around 12 months time (this give us further time to pay down the loan (and aquire some equity) and also further build up our current savings….

Potentually I would like to see furture cashflow-positive properties pay down the loan even quicker..

What whould be your advise on our current situation… My mind set is to build my asset list even further…and adopting cash-flow positive property sounds very much a sound and wise investment..