Confused! Investor Newbee: Q!)Have $200k equity in home with $100 P&I mort. Bank says can lend us $198k. Where to next? Do we use $198k for deposit & closing costs investing in 2 properties sale prices @$285k each with expected $350pw each rent repaying 2xP&I mortgages? Not even sure if bank will let us do this (haven’t asked yet, still researching) Q2) Then if we did this how do we go beyond as all equity / savings used up?[worried]
the short answer is you borrow out the equity as a loan and use it as a deposit to buy as many properties as you can. security is taken over the new properties! Im sure one of the finance gurus will answer this more fully!
My suggestion is before you do anything, start educating yourself! It is VERY easy to loose money in real estate (I’ve done it!), must know how to work the numbers, what to look for, what the returns are etc. don’t just buy anything! properties are not all equal as some people think!
We buy properties in Adelaide. No Agent Fees.
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phone 0412 437 582Hi Jubb,
You only need a 5% deposit (less if are prepared to pay a higher interest rate), plus enough money to cover stampduty and other costs to purchase each property. With $200K in equity deposits for the two properties will not be a problem.
Regards
Alistair Perry@$285k each with expected $350pw each rent
Impressive returns. Are these regionals or cities? You could probably still get such returns in regionals but the gap is narrowing however I’d be cautious if someone offered you those returns off the bat in the cities which is where the growth will begin in the next cycle. You ask yourself, why would someone sell you a property with 6.4% return when the averages are around 3-4% in the cities. Thats not to say its not achievable through adding value/rooms, quick reno job…etc.. Good luck with the research.
My advice would be to make an appointment with a mortgage broker who has experience with mortgage finance and let them sit down and explain to you how it all works and get them to go through the various options for finance available. Most brokers now do not charge fees so it wont cost you anythign to go through them yet you will have a variety of options to choose from
Anita Marshall
Managing Director / Mortgage Planner
Advanced Finance Solutions
http://www.advancedfinance.com.au
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