Hello All You Smart Well Educated Wealthy Property Investors,
I NEED ADVICE: Please give me 5 minutes to feed me for life.
Situation: I’ve read the book, also the Positive Cash Flow Property and It’s easy to invest in property. Now I want to be wealthy too, but yesterday!
Problem: Not sure of my next step to obtain a Positive Cash Property. I will explain my financial situation first then ask the question.
Financial position: Sallary: $65k
Investment Property 1: Negitive Geared. Owe:$112k
Rent: $155 pw
Value: $150-$160kInvestiment Property 2: Negitive Geared: Owe:$133k
Rent: $215 pw
Value: $210-220kLive in Government housing rent free, no Credit cards and own 4wd valued at $20k. No cash yet as I’ve just dug myself out of HP.
Now the Questions: How can I use the equity in my propertys to purchase +CF property without going backwards?[blink]
Do I wait to save the deposit or can move forward now?
Do I finance on P&I or Interest ownly?
And were are the +CF propertys as they are near impossible to find?[confused2]
I thank anyone who helps with advice as I don’t know who to trust out there.
Cheata68
[withstupid]Hi Cheat,
first things first…
Hello All You Smart Well Educated Wealthy Property InvestorsNot too sure about that statement…i know i don’t fit into that category
I’ve read the book, also the Positive Cash Flow Property and It’s easy to invest in property. Now I want to be wealthy too, but yesterday!This is dangerous – you cannot just want to be wealthy – you have to have a purpose or aim in life and to help you achieve or fulfill that purpose, then wealth might help but you cannot just want to be wealthy – it’ll never work!
You can do so much with what you have. 65k is more than most ppl getting and its above the average wage. You live for free have 20k equity in your car. First go to a few banks and seek some independant lenders and give them this information and they will tell you how much you can borrow. Based on that you then go look for investment properties. You have over 100k in equity already and it seems like your credit history is good. You can use this 100k for deposit on a few properties. It looks like your second property is +CF now that you’ve paid alot off it.
Do I wait to save the deposit or can move forward now?You are able to move forward now. I wouldn’t sell the negative geared properties because you are able to move forward without them. You ahve an excellent slaray and alot of equity.
Do I finance on P&I or Interest ownly?— depends on the property. If residential, I would go for P&I.
And were are the +CF propertys as they are near impossible to find?— you just have to look harder. there are plenty out there. Look further out into the country towns. Speak to agents and get on the databases of members on this site. They find investment deals for ppl like you for a small fee. Make a post something like: ‘include me on your database – I will pay you’
Hope all this helps. Cheers.
Kind Regards,
George.“If You never never ask, you’ll never never know”
Hi Cheata,
Banks will look at two issues when determining your borrowing capacity – income and assets.
Based on the lower of your property value figures you have total assets of $360K. The bank will typically recognise 80% of the value of these ($288K) less the existing debt ($245K) which realises $43K which you can use for deposits and purchasing costs.
The bank will also consider your income $65K + approximately 70%-80% of your rental income (around $15K) when determining serviceability.
A discussion with a good broker will firm these figures up and will provide you with a clear direction of what you can, and can’t, do financially.
For me I would do interest only loans as you improve your cashflow – however given you do not appear to have a debt on your own home – you may like to consider tackling the smaller loan on a P & I basis. It is a matter of personal choice.
Finally I would suggest there is no need to hastily rush forward – spend a little time getting everything in place so you can build a sustainable structure – too much rush and it may all collapse on you.
Editted a couple of typos.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Cheata,
A quick glance at your figures tells me you can move now.
If I acted for you I would consider topping up one of the loans for a deposit and then borrowing 80% of the cost of the next IP seperately on it’s own mortgage.
Easy enough to set up and you can get the best rates out there – possibly a Professionals Package.
But as the others say – take your time and buy well!
All the best,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks Guys,
A bit more specific question, if I top up one of my investiment propertys, wont that send my repayment up so high that it would take ten years of inflation for the rent to turn it ino the +CF prop we try so hard to achieve?[satan]
Now I can see me getting the next +CF property, say for $88k and rented for $160 pw. So what happens then? Won’t every property you purchase decrease you ability to purchase more? Increasing risk and all that?[weird]
Anyway guys the info is very helpful.
Thanks
Cheata
[withstupid]You’ve confused me…[confused2][confused2][confused2][confused2][confused2][confused2][confused2][confused2]
“If You never never ask, you’ll never never know”
Financial position: Sallary: $65k
Investment Property 1: Negitive Geared. Owe:$112k
Rent: $155 pw
Value: $150-$160kInvestiment Property 2: Negitive Geared: Owe:$133k
Rent: $215 pw
Value: $210-220kLive in Government housing rent free,
Now I know why I pay so much tax
O.K. let me please explain.
Gold member: Some of the advice recieved was to top up one of the investiment properties for the deposit on a new +CF property. So my question is if I say on Investiment Property 2: which is Negitive Geared: and currently Owe:$133k to a new loan of say $155k and the rent still at $215 pw
then using the 11 second solution the figures are really blown out. So isn’t this self defeating in trying to obtain as many +Cf properties as possible. Neg Gearing is the [satan] devil, isn’t it?Or am I looking at this wrong?
Now ValiantWagon, I apprieciate how on paper that it looks like I’m in gravey,…. well reality bites real hard…. I live in a very harsh remote area of Australia, in a house that hasn’t seen a lick of paint for 30 years. The only way I can get ahead is to send myself to a virtual prison for a few years. No quality of life here, even the e-mail is only delivered twice a week. After tax and supporting 5 off one wage doesn’t leave much for the casino. One reason for getting into this is that I’m looking for way out of hell.[grrr]
Oh and also I pay tax too, which makes me self employed.[tongue]
Anyway I really thank all who have positive suggestions/advice.
Cheers
Cheata
[withstupid]Cheata,
Keep in mind that there are no fast and easy fixes. They will all take time and commitment.
First step: lay out some realistic goals on where you want to be in 5 and ten years. Then document (on paper!) the steps you will take to get to these goals.
I suggest your second step be to talk to a good mortgage broker – on the phone if you have to. You need to look at what your borrowing capacity is and if there are ways to improve your current situation.
Third step will flow from the first two.
Cheers,
Aceyducey
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