Forum Replies Created
Hi John,
not sure what’s happening in your neck of the woods but in SA I don’t think they do too many (if any) strata titles these days. Most places that are developed (ie knock a house down build 3 units) are done on community titles which gives each individual owner more freedom. I don’t know heaps but I think the driveways/sewers might be shared but you don’t have to get permission to change things in your unit, unlike a strata.
I’m currently subdividing a block of land (a different scenario I know) and will sell the block of land once complete and keep the house. We will be changing the current torrens title to community ata cost of around $15k, so it’s not a cheap exercise.
Your best bet is to ring the local, your PlanningSA equivalent or a solictor who specializes in converting titles. Then you’ll know what you’re up against and how much you would need to sell the units for at the end.
Good Luck
MikeHey Dream
At first I thought you were want to help spending your inheritance![biggrin]
The other comments are very valid, with that kind of money you should be able to do better than 5.40% (I think) with ING. Most FI’s will negotiate a better interest rate with you for sums over $100k so if you can earn an extra .2 or .3% why not (on a $100k it can make all the differance).
If you do have a mortgage for your ppor and the FA you saw didn’t advise paying it off and redrawing (as Simon suggested) then find another advisor because they are not working in your best interest.
If you want to investigate yourself then http://www.investsmart.com.au is a good site and if you go thru them there is no entry fee / commission.
Other than that all I can say is think about it and don’t waste the money that has been left for you, I’m sure that was not the intention of the person who left it. I work for an FI and have seen many times when a lump sum comes into an account and slowly gets dwindled away with everyday leaving.
Good Luck
MikeHi Jase,
there was actually an article in the Advertiser today about the Palais apartments in the East End. It’s more about the noise and stuff down that end of town but perhaps if you googled it you might find something. It says in the paper it’s part of the Alpha apartments.
See how you go
MikeHi All,
I love these forums, so many good opinions and you get to learn how others think. Like many others I think credit cards can be good and bad. In conjuction with a LOC they can be an effective debt reduction tool – so long as you are disciplined. Say you get paid $1000 per fortnight that goes in to a LOC, if you use your CC all month that $1000 is saving you interest.
But the only way to get ahead in the debt reduction game is to spend (much) less than you earn! I have seen cases similar to those Mortgage Hunter mentioned, they do the right thing by consolidating there debt and the go use there surplus funds to borrow more, some people will never get ahead.
I also agree with MH on his comment about your partnership, you’re obviously committed to each other enough to buy a home together so it you must be looking long term. It’s in both your best interests to reduce you personal debt so you can move on to bigger and better things, IMHO.
Cheers
MikeMental note – never ask where CF+ deal are in a forum!
tamtam, I feel sorry for you buddy, but I can see where the other guys are coming from. I admit I’m relatively new but I do have one minimally CF+ property that I found by finding an agent and going to Adelaide’s northern suburbs with her and viewing 7 properties in one day. The one we (my Wife and I) bought hadn’t even been advertised yet but because we made our intentions clear (ie we wanted to buy) she showed us an extra property. Although I say it’s only just CF+ there is enough land at the back to subdivide and we are in the process of getting approvals that will hopefully get us a $40k profit in 6 months (probably more I know).
I appreciate that you are in Sydney and the internet is my main way over looking for properties but it can’t be the only way. I read Steve and other people’s comments that you’ve got to get out and speak to agents. It rang true for me today because we are looking for another property and I saw one on re.com for $85k, I rang my PM who said she thought it would rent for $130 p/w so the quick number looked ok. I then rang the agent who said it was already under contract, the same day it went on the web.
So my advise to you is to do some research, select an area you want to invest in and take a “holiday” to talk to some local agents, face to face. I’m no where near financially free and am still committed to dragging myself to work everyday so I get paid, but there is only one way for me to get ahead and that is to take action myself.
Hopefully you can do the same.
MikeHi fbd1,
I’m certainly no guru but I applaud you for thinking outside the box when trying to put a deal together. [thumbsupanim] The way I see it, the end scenario sounds pretty attractive but it’s going to be a hard slog to get there with $700k (approx) worth of loan repayments until your vision comes to fruition. I calculate that interest only repayments on $700k at say 7% are a bit under $4,100. Include your other “outgoings” of about $1,200 a month and you’re up for $5,300 month. If the houses are $500 combined then you’re going to need over $3k per month to meet expenses, if it’s $500 each then it’s only $1k. If the latter is true then depending on your LVR the bank may even capitalise some payments for you. Another option is to get a long settlement so you can get all your approvals done and perhaps even gain access prior to settlement.
During renovation an IO loan would definitely be the way to go and then depending on you goals could possibly be a good option post completion.
I think you are a braver man than I for even considering such a big deal, so well done. It will be interesting to hear what becomes of it all.
In the absence of any Guru response, all the best
MikeI’m relatively new this whole posting thing but have learnt over the years not to assume anything, so forgive me if I’ve missed something in your previous posts! (my assumption is that your partner will contribute some funds as well).
My concern for you is in regard to fees, and the funds required at settlement.
Purchase price = $217,000
Fees (gov’t/bank/solicitor = $10,000 (approx and likely to be more)
Total = $227,000Your funds = $20,000
FHOG = $7,000
Loan from Bank = $195,000
Total = $222,000So there is atleast a $5k shortfall. I admit I’m from SA and don’t really know interstate fees but the $10k doesn’t even include mortgage insurance which could be another $2k or so.
I don’t mean to treat anyone like an idiot but if I didn’t know about this stuff myself I would gladly take this advice to avoid an embarassing moment on settlement day (I would hope your broker has alerted you to the fees involved).
Good luck anyway
Mike
[withstupid]Congratulations on your first purchase! My wife and I have recently entered the market ourselves, buying an IP in the northern suburbs of Adelaide.
We actually live in Sheidow Park and of the areas you mention there is not really too much to steer clear of, I guess it all depends on your strategy. Each of the suburbs have their older and newer sections (HC & SP in particular) with houses ranging from brand new to 25-30 years old. I think you would be hard pressed to find a CF+ property in terms of income as your mortgage payments (even at IO) would be much more than any rent received.
As far as capital gains go, they are pretty average surburbs in terms of the Adelaide market. My parents moved to Qld about 3 years ago and sold their house in the Karrara area of HC for $183k, now similar places (4br, 20yrs old) are going for $270k+.
Similarly, we bought a block of land in april 2002 for $60k, when we got it valued to build our house in about june 2003 it had gone up to $90k.
Not sure if that’s the kind of info you are after but it’s a start.
If you have any more specific questions, let me know.
Cheer, Mike
Hi Janetbianka,
the scenario you describe sounds good (who wouldn’t wnat to make $70k+ in 6 months?).
Can I ask how much you are paying for the relocatable homes and where they will be purchased from? My wife and I have a IP in Adelaide that we want to subdivide, it’s not in the best suburb so we’re not sure if we should just sell the land or put a cheap home on it to rent out. Looking on the net I haven’t seen anything for much less than $50k which I don’t think would worth our while.
As far as advice goes on your scenario, just be sure to have a contingency plan as any delay in “construction” or a longer than expected sale time eats into your profit. When the profit is so good I’d be prepared to meet the market if required and still walk away with $50 – $60k then move onto your next deal.
Good Luck
MikeNot sure how many people are stil looking at this one but thought I’d add my story anyway.
Me and my wife bought in Elizabeth Downs a couple of months ago, we live on the other side of town and can’t believe people live like that but hey, we don’t have to live there. Anyway, it took about a month for our PM (LJ Hooker actually) to find a decent tenant which was fine but after being vacant for a month someone stole the front screen door and all the fly screens from the windows the day after the tenant moved in!
As someone wrote previously, landlords insurance is a must in that area (probably anywhere). despite that experience we’re thinking we will look for another property in a similar location soon.
Cheers
Mike
