Forum Replies Created
Sean,
I appreciate where you are coming from. Indeed, how to start saving is the key to creating wealth.
Here are some ideas:
1. Start with 10% of your NET income. Put it away into a separate account and refuse any offers of your bank to have an access card.
2. I never used to believe in the concept of “a lifestyle I have gotten used to.” But in my old age, I discovered it is true. People get use to a certain lifestyle. And it’s really very hard to wean them off the cafe latte. So, here’s the clincher: there’s no easy way. You will go through withdrawals. From the caffeine, the late nights, the high heels, the hair dresser. But it must be done.
3. Make it fun. My family have a contest going, who got it the cheapest! The recognition is massive. I buy my children’s clothes at St Vinnie’s and the House of Salvos. In the Paddington branch, at Sydney’s Eastern suburb, I bought my son’s office shirt. Hardly used, and it’s the genuine article: Ermenigello Segna. He works in a law office, so he really looks the part.
4. Going to a sale it NOT saving money.
5. Cut costs. Easiest way is to rent a cheaper place. My nephew lives in a boarding house in North Sydney, walking distance from where he works. He has no utilities costs, no bus fares, no need for a car. He only buys food. For entertainment, he’s got Facebook. In one year, he saved $20,000.
6. Dating: geez, make this romantic. Together, plan to surprise each other with the “no cost” dating. Such as bushwalking, picnics. Australia is so beautiful, you don’t have to go too far to explore and be a tourist in your own backyard.
7. Get a second job, just for fun.
Just a few tips.
Angel
Thank you Paul and Luke,
I’d like to post the information about the property here and creative solutions that I can think of. I hope you all can help with further suggestions or offers. To those who will email me directly, I’d be happy to email you the floor plan, the RP data valuation and the land valuation from NSW valuer office.
Here is the description of the property:
1. Over 6.5% return
2. Capital growth in excess of 15% on average
3. Perfect corner block, only one neighbour
4. sub-divided into 7 flats (5 studios and two one-bedrooms)
5. Individually metered, so owner only pays the house lights
6. Coin operated laundry machine and dryer makes $2,500 to $3,000 p.a. approximately
7. All professional tenants, no unemployed, no low income, no students
8. Great feng shui. 7 bedrooms, 7 kitchens, 7 bathrooms, 5+2 = 7.
9. No work needs to be done internally, except the outside needs cosmetic repairs
10. Zoned residential, always able to obtain residential rates from banks.The property sold for $1.72M in July last year on an option. The buyer wanted an option of 6 months in order to apply to North Sydney Council for a change in use from residential to commercial. She wanted to use it for a pilates centre. The Council rejected the proposal so she backed out of the deal in January this year. We kept the option fee.
Mel Ciampa, our solicitor, can prove this because he wrote the option and has the contract of sale signed by all parties.
It sold again for $1.620M last month, it fell over again.
The property income is $2,000 per week. I am prepared to sign a three-year lease so that the new owner does not have to worry about managing seven lessees.
Total out-goings is only $10,000 per year, not including land tax.
These are the out-goings:
$4,800 approximate for top insurance cover for building and contents
$2,800 for Foxtel Cable
$3,200 for Council Rate
$ 800 for house lights
$1,200 for water charges
___________
12,800 totalIncome from coin-operated washing machines and dryer, approximately $2,500 to $3,000 per year. I use this to pay for water and house lights. So in total out-goings is only around $10,000.
Due to high rental income; and, it being zoned residential, we have always been able to obtain an 80% loan with banks. St George has valued the property at $1.65M over 18 months ago during the depth of the financial crisis. Since then Cammeray’s median price has grown in value by 33%.
I’m desperate for a genuine sale (that will eventuate) that I’m prepared for the following options:
Option A: Favourable sale of $1.55M. Quick settlement, all paid up. No vendor finance. This is heavily reduced price. Bargain basement. We have already made money on the option fee and the failed sale.
Option B: Sale price of $1.72M. Deposit of $172,000, permission for us to use the funds for another project. Up to one year settlement in order to help them organise their finance or sale of other property. We need to use the money so a deposit bond will not work for us.
Option C: Sale price of $1.62M. Vendor finance 20% at favourable rate of 7% fixed for three years. This is the cheapest second mortgage rate ever.
Option
Sale price of $1.72M. Vendor finance 20% at NIL interest for two years. After two years, if they still need our money, a bank home loan interest can be negotiated. However, buyer still needs to reduce principal balance by $3K per month as a minimum. We need the cashflow. Since the bulk of the loan can be serviced by rental incomes, the $3K monthly principal reductions on the vendor financed amount would be all you have to worry about.Would you please get back to me ASAP? If any potential buyer/s have another thing in mind, I am prepared to listen if the deal can be closed quickly. Please give me their feedbacks, and if a win-in situation can be arrived at, I’m listening.
Thank you.
Sale price of $1.72M. Vendor finance 20% at NIL interest for two years. After two years, if they still need our money, a bank home loan interest can be negotiated. However, buyer still needs to reduce principal balance by $3K per month as a minimum. We need the cashflow. Since the bulk of the loan can be serviced by rental incomes, the $3K monthly principal reductions on the vendor financed amount would be all you have to worry about.
