All Topics / Help Needed! / +ve and -ve offsetting dillemma!

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  • Profile photo of gannfangannfan
    Member
    @gannfan
    Join Date: 2003
    Post Count: 4
    November 8, 2004 - 2:40 am

    Hi guys i have a problem.I suddenly have 2 deals on the table..
    1 +ve geared lease option property in cranbourne Vic ($114PW) cost $240 k

    2 -Ve geared property wollongong Nsw (-$180PW) cost $350k with property next door coming up for sale in the next few years/months for similar price to give devlopment block worth conservatively $800k +

    i can afford either or both but my wife is trying to fall pregnant and im a little nervous now!
    This property has been negotiated down to this cheap price because the owner is defaulting on his line of credit mortgage and cant manage much longer..

    looking forward to some debate cheers Gannfan

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    November 8, 2004 - 2:45 am

    Gannfan

    Are you nervous because your wife is trying to get pregnant or because of investing?

    When you say you can afford both, can it be done on one income while you wife is out of action with the baby? Long term, it would tbe the Wollongong one that would make you the most money, but the LO will put more money into your pocket now with the extra income received.

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    Profile photo of gannfangannfan
    Member
    @gannfan
    Join Date: 2003
    Post Count: 4
    November 8, 2004 - 2:48 am

    a bit of both!! lol!
    Also i’d like to knock off my own $160K mortgage so we can spend more time with the new family.
    I’m not sure of the prices developers are paying for 1881m2 of medium density land but i do know the median price of Townhouses in the area is about $330k and the block should fit 10 – 12 on
    if this is any indication..
    What would you guys do in my position?

    Profile photo of mjozmjoz
    Member
    @mjoz
    Join Date: 2004
    Post Count: 3
    November 8, 2004 - 1:20 pm

    Hi,

    One of the key things I’ve picked up out of Steve’s latest book is that you need to set yourself some investment parameters and stick to them. If you’re looking for cashflow +ve from day one, then just take the Cranbourne deal, as the Wollongong deal isn’t positive from day one. Easy to say when you’re not involved I know, but….

    Also, what is the risk that the adjacent property in the ‘gong won’t come up for sale in your timeframe?

    Cheers,
    Michael

    Profile photo of gannfangannfan
    Member
    @gannfan
    Join Date: 2003
    Post Count: 4
    November 13, 2004 - 1:44 pm

    Well i realise the 2 strategies are opposites but the outcome of financial gain is the same and both strategies have their pros and cons.(covered ad infinitum elsewhere)

    You question of time frame of when the property next door will be up for sale has prompted me to reassess this deal…. now i am going to find out if i can actually “tie up” this property with an option right of first refusal or some other method? Anyone have some ideas how i could coax an elderly woman into some kind of (fair of course) deal?

    Also what is a good strategy of dealing with vendor 1 as they have decided they want $355K and there agent says they wont settle for less.Though when i brought up creative finance briefly he said they might be interested.

    Any ideas would be fantastic!
    sorry this reply took a while i have been flat out in my shiftwork job.(doh!)

    Cheers Gannfan..

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