Ok, so you managed to get the deposit together for your first property (or you’ve used some equity in your own house,) so how then do you keep coming up with 10 or 20% deposit? If the average net return is about $30 per week, you need to buy a lot of properties to be able to eventually finance the deposit out of the profits, but where does the deposit money come from until then. Do you borrow it, use equity etc?? How do you get the deposit for you second, third, fourth property etc?[blink]
Equity.
As the values of the properties rise, the loan can be increased and the new amount used as a deposit.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 9853 year fixed rate – 6.69%
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Leasmith,
In my experience it was thru the FHOG (first home owners grant), then I have an employer that wants to keep his employees (remote north WA) so they put in a few goodies and hey presto I jumped to the front of the que.
If you can’t use the FHOG, and you don’t have any equity or savings, then you might have to go for what is referred to as ‘wrapping’ setup. But I am not familiar with those so you need to chat with others on that subject.
Some people have supportive family that assist/ put up the 20%, and there is the opportunity to do vendor finance (where the vendor holds onto a % of the sales price to work with you).Of corse you can always save every spare cent and combine it with any of the other options mentioned above. Get a second job (I did/do), spemd less than you earn, etc.
It goes on and on. There must be a different way for every person in this world!What have you got so far? What are you able to get in future? What kind of house dd you want? Where do you want it? How much do you want to spend? These would make our answers more pointed and helpful.[biggrin]
Cheers
C@34
There’s no easy answer. Just keep saving like mad, accessing equity with growth, and get a bit creative – vendor financing the deposits, wraps, LOs, investors etc.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Equity mate……
No, seriously, there are lots of ways to keep buying property.
Find out the vendor motive for selling, then all sorts of creative options open up.
Alternatively, find the right vendor.( the motivated one )
Sounds like a load of theory.. but it actually does work.
For example, vendor has a small mortgage or no mortgage, and does not need all the cash from the sale of the property.
Vendor leaves a % ( maybe 20 or 30%) in the property.
You pay the vendor bank interest rates or above bank interest rates on his equity left in the property.
You get bank loan for balance of 70 or 80%You can ensure that the cashflow is positive thus the income derived from the property is greater than your repayments to the bank AND the vendor.
Its a matter of creating the deal…and its not that difficult to do. Honest !
KP
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