All Topics / Help Needed! / The numbers just dont add up?

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of thesalmonthesalmon
    Member
    @thesalmon
    Join Date: 2010
    Post Count: 3

    Hey Guys, ive been reding this forum for the past year learning , learning , learning as much as i can about Property investing. years ago i chose to travel instead of buying my first IP, now years later im ready to get back onto the property investing path i had originally planned for. i read books, and i went to the mega conference, and i believe i have enough knowledge to get into it, however i have one problem, capital.

    i have 15g in cash to get started, a perfect credit history, and no debt. i have made sacrificies to get things rolling (ive even moved back home with mum and dad to save) but i just can see how its possible to get going.

    doing the sums –

    say i can find a 200,000 home, and i get 5% finance (80% lvr is out of the question obviously)
    still means –  (rough figures)

    deposit 10 g
    closing costs 10g
    mortgage insurance 8 g
    renovation (fastest capital building strategy) min 10g
    holding costs for 6-8 months 5g min

    so there is 42,000 cash i need to even get going in the cheapest of homes?

    my question is how do people get going?

    the only option i can see is doing property options, and it seems like a real hard slog to get a deal going, ive asked a few home owners to get a feel and most seem offended, or assume you are up to something dodgy?

    so is a JV my only chance? i do the legwork (i still work 5 days a week) and get a money partner?

    i have so many strategies and plans id like to do once i have capital , but cant seem to workout how to get the first one going to be able to build off.

    my question is, with 15,000 in cash is my only option either a jv or property options? or is there another way that im missing?

    Thanks Luke

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Here are a few of phrases to get acquainted with:

    "Vendor finance"

    "Rent to Buy"

    "Rent to Own"

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of thesalmonthesalmon
    Member
    @thesalmon
    Join Date: 2010
    Post Count: 3

    i think you misread what i was saying. i dont want to buy a ppor, i want to buy an investment property.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    No, I understood your post – each of these concepts are applicable to investment properties.

    Vendor Finance means the seller of the property loans you some of the money (in other words, helping you with the piece of deposit you don't currently have.

    Rent to Buy, or Rent to Own, means you rent a place for an inflated rent, and buy it later for a pre-agreed price (where the inflated portion of the rent is deducted from the purchase price.  You then ON-RENT the property to a tenant.

    Another option might be to purchase a piece of land, then build on it when you have the cash.  Not a great option, since the investment would not generate income, and therefore you cannot claim the "loss" of the interest on your tax return.

    Have you looked at suburbs that offer homes for under $200k?  Where are you located?

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of thesalmonthesalmon
    Member
    @thesalmon
    Join Date: 2010
    Post Count: 3

    I live on the gold coast, but buying here is pretty much out of the question.

    i said 200,000 as there is not many homes out there for much less then that unless you go rural (which i may have too)

    even at 100,000 its still going to cost more then my capital.

    ahhh its frustrating….. oh well i'll just keep looking into more creative strategies, i'll find a way

    thanks

    Profile photo of djjkdjjk
    Participant
    @djjk
    Join Date: 2010
    Post Count: 87

    Three words.  United States of America (sorry thats actually 4 but you get the point!).

    Profile photo of DWolfeDWolfe
    Participant
    @dwolfe
    Join Date: 2009
    Post Count: 1,253

    Hehe!

    JV all the way. JacM you are a lovely patient person. Always so reasonable.

    Stop trying to buy where you live salmon. I bought a property for 128k 2 hrs from where I live. Sure its a dump, sure my tenants are well, male. Sure grubby all round but hey it will just pay itself off, and if in a couple years I see any capital growth I will sell that dump faster than you can say Fibro shack.

    But someone wants to live there. Better yet that someone pays me $180 a week to live there. And they may eventually want to buy the property and then we will have a nice arrangement.

    Square = You + Outside.

    D

    DWolfe | www.homestagers.com.au
    http://www.homestagers.com.au
    Email Me

    Profile photo of number 8number 8
    Participant
    @number-8
    Join Date: 2010
    Post Count: 333

    I would say you are on the money…….

    I have just completed a $350 purchase for a client with $25k deposit (NSW)….

    Include FHOG and stamp duty relief and the $15k would do for a $200k purchase.

    As long as your income is suitable for lending purposes, you would be in with a shot. As you mentioned moving back home would further improve this deal (increasing a savings buffer to reduce risk). Another option you may have is the family guarantee or like….

    Like you said, there are many creative strategies i.e. scrap the renovating thing if it doesn't fit the budget….

    It is all systems go from me…. ENJOY!

    http://www.birchcorp.com.au

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196

    Hi thesalmon

    We've just sold a 3 beroom home in Morwell, Vic for $147,000 with vendor finance.  The new buyers paid a deposit that was made up of the FHOG and $3,000.  There are more of these vendor finance properties at:
    http://www.renttoownhome.com.au

    I don't have any interest in this site, apart from advertising our properties there.

    Cheers,  Paul

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

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