Hi Folks,
well after reading 2 of Steve's Books I realise what a doofus Ive been. Sadly I bought a while back using my heart and not the brain. Wanting the nice house but not considering all the things Ive been reading about until now….
My Wife and I live in Sydney in a unit we half own with my brother in law, whom we pay rent to (half price of course). Valued about 300K. We owed 90K on the unit and went and bought a House on the Central coast, waterfront reserve, for 520K two years ago, hoping to move up there when we could. We get 320 wk in rent for the house…so you can see what a loss it is right now and I am drowning in interest payments. I would imagine its current value is about 580-600K looking now.The house is on a 1000m/sq block, and the house is down near the water leaving most of the block vacant and bushy land, and I was hoping to sub divide the back half off to improve our situation somewhat, but the min size I recently discovered is 1100sq/m and because its on a slope its more like 1300m/sq so sub division looks like a no-go. I have considered approaching a neighbour, and seeing if they are willing to sell their top half of their block to me and therefore have a large block to sell, possible for 300K so an Agent tells me, but Im not sure if that would work and Im scared of even more debt.
The other hurdle is a wife that isnt keen on selling our unit even though i really believe we could get ahead much more by renting and investing elsewhere.
I guess Im stuck between a rock and a hard place. I would like to implement some of the strategies I been reading about and get out of debt and invest in wealth producing real estate. I guess the House will need to go….and the unit.
Im a fireman and wife is in childcare so we both only bring in about 55K each a year….
If anyone can suggest some ideas I would appreciate it.
Cheers and Thanks.
Consider the following scenario: Build a side by side duplex on the block on the Central Coast, live in one, rent out the other. Both will have the water frontage & command premium rents. Downside: not subdivisible (also need to check with council about allowing you to build duplexes), you won't have an income on that property whilst you rebuild (unless you can build creatively & retain the house until the new place is built). Sell the unit or find a new tenant & split the rent with your brother.
Hi Snowball
If you were to sell your property on the Central Coast with Vendor Finance, it is likely this property would provide you with positive cash flow while, at the same time, locking in your future capital gain.
Once this Vendor Finance transaction is set up, you will be able to show the bank manager that you have a positively geared investment property. With a positively geared IP in hand, you can move forward and possibly utilise some to Steve's investment ideas.
Information on two Vendor Finance techniques you could use to sell this property can be found on this web site, at:
https://www.propertyinvesting.com/strategies/wraps and
https://www.propertyinvesting.com/strategies/lease-options
Good luck.Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
You own half a property with a brother in-law maybe you could do the same with the other property with your brother in law to half the interest you have to pay. Consider fixing the interest rate if you are going to hold onto the properties.
Thankyou everyone.
I will consider the advice you have given.
I have spoken to the neighbours of the house about joining forces to sub-divide 3 properties to make 2 extra blocks going thirds on costs and profit etc seems like a good idea. It will probably be negatively geared but no where near what is is now. I also just learned that the tennant has two dogs now…so i will consider upping the rent!!! I will also look into getting out of the major bank Im in and fixing both loand together to save $$$
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