Forum Replies Created
Weekly Rent x 500 <= purchase price.
IE weekly rent = 100$ per week.
Times 500 = 50,000.
Purchase price should be no more than $50,000
If you quickly do the maths it’s EXACTLY THE SAME as the ’11 second formula’
which isweekly rent divided by 2, times 1000 <= purchase price.
Cheers
alwayscurious.In my opinion Steve’s books & courses etc are better value for money.. Especially as I went to the book launch in Brisbane which was FANTASTIC
I have a penchant for books. I’ve gone on a spree this month – purchasing about $50 worth of books (from ebay, at least I got them 1/2 price!!)
So that’s my deal. And I like sushi. a bit. And a bit of curry takeaway once a fortnight or so.. erm.. ahem. and ..
I will justify it tooth and nail.
Calvin@34.
I agree in that case Xcoll could be more restrictive. It does give the banks more security. It also is a tool to avoid taking out cash and putting 20% deposit, if it doesn’t suit your circumstance.I think it’s the only thing that got me this far though. I only saved cash for 1 deposit – in my PPOR. I ‘used equity’ in a cross collateralisation technique spelled it right first time!, rather than withdraw cash and deposit on the IP’s.
The investment properties are at the stage now when my own house could be removed from the XColl mix, which would suit me nicely but make no difference as to the banks power to repossess if I go with a professional package at the same bank.
According to Stuart Weymiss’s site- the banks can only repossess your home quickly if the names in which the loan in are the same as your IP loans.
There’s pro’s with going with the same bank – might be able to broker a better deal, and pro’s to going with seperate banks for home and IP’s.
I guess it depends on your risk level.
My thoughts:
I could change the loan for the PPOR in my own name, set it up as interest only, put the P&I ‘repayments’ into an offset account, have the IP’s as interest only in my wife and my name, then when we move again, take out the offset account money to put into our new home as deposit, and rent out our old home as a renter.The bank would have “chinese walls” against my own home because
A) it is not Xcollaterlised with the two IP’s on setup, and may not need to be.
it is ONLY in my name.
C) the IP’s loan is in both names (with apportioned interest to whoever ‘owns’ the IP, my wife or myself. <C was my broker’s idea>Creative. Saves non-deductible interest.
Allows a ‘way around’ the age old problem of ‘renting out your own home’ with minimal
Sounds good to me!Issues are:
If I want to buy another property and don’t have enough equity in
A) my own home
both IP’s combinedthen I will have to XColl again?
I think I will be releasing my own home from the mix to free it up for a while. Until the next purchase, but we might have enough equity in the two IP’s combined to avoid putting our own home in the mash.
Woah. I think I just busted a blood vessel.. [wacko]
When I broke a lease managed through a RE, I had to pay rent AND advertising until they found a new tenant.
I rang the PM every day though until he did!
True that banks do and will foreclose. It’s up to me to be proactive. If I get into trouble through being silly or over-stretching then I need to do something about it.
However – the counter argument is that banks will rather keep you as a paying customer and may give you a loan repayment holiday or other to avoid the cost & hassle of selling the thing?
I am currently considering the following:
Professional package. ($300 P/year) Which bank?
allows a single LOC facility for all IP’s and you can apportion the interest to different borrowers (ie my wife and myself).
I can add and remove new IP’s into the mix at will.Also – Allows a sigle facility against my home which will enable me to have a simple P&I against my home (similar to what I have now) at a very good intro rate, and good ongoing too. better than I have previously been quoted.
(nice idea stuart BTW to put the money in an offset instead of paying off your own home, I don’t know if I could trust myself not to spend it though! !!)
I will consider all your replies but the message i am getting is
A) Cross securitisation is easier to spell.
It’s a technique used by banks who love security, and also to increase customer retention
C) it can be “Fixed” by having cash deposits or by re-financing the whole lump of properties at once, but this can potentially be a hassle.
it is ONLY in my name.
