[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 5, 2011 - 8:35 pm

Hi slowachiever,

I think, to a degree, you’ve found the answer to your question.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 5, 2011 - 1:39 am

Hi all,

Having started this thread, I have to confess that my first property was an investment property, not PPoR.

The reason? We couldn’t afford to buy where we wanted to live. But it didn’t mean we shouldn’t buy.

Thanks.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 5, 2011 - 1:35 am

Hi sdem,

You success will NOT depend on Destiny. It will depend on YOU.

What you have already learned is crucial to what you’re about to do next. Build on it. Brick by brick.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 5, 2011 - 1:31 am

Hi Breeza86,

Darling, what i’m going to say to you may not be what you want to hear. But first I want to stress that i don’t want to burst your bubbles. I just want to lay out some realities. Call it old age wisdom.

1. Do you have savings? If not, why not? If not, then you’re in no position to buy a house. Buying one takes massive self-discipline. Mum and dad being willing to guarantor the loan is a high risk business for them. You should have a demonstrable ability to live within your means.

2. If you are eligible for FHOG and soon-to-be husband isn’t, then buy before you marry. Once you get married, you are no longer eligible for the FHOG, too. Unless the policy has changed and I didn’t know about it. In fact, living as de facto is also “iffy.” Ask the experts here.

3. Whether you buy a home together first or a rental is up to two factors: Relational: Do you both want to be with mum and dad for THAT long? And do mum and dad WANT to have you stay at their house for THAT long.?

Second factor: How much you can borrow as a single person depends on what you eventually buy (assuming BF can’t get a loan).

4. What is the reason for soon-to-be husband’s default? There are lenders who will look at the circumstances in which a default was accrued and for how much? When I was mortgage broker, I helped three people with small defaults to get a home loan with St George. However, these individuals have very, very good reason as to how the default came about.

5. The idea of owning lots of properties is very thrilling, but the path is full of pitfalls if you’re not careful. Since your parents will be somewhat involved, they NEED to be PROTECTED as well. A mortgage broker with integrity can make sure they do not become liable for more than they should be.

These issues need to be bedded down first before anything. Speak to mortgage brokers who can educate you on certain aspects of getting a loan, and yes, it is essential to get a pre-approval before going shopping.

Good luck and good to know of your great intentions.

Take care.

angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 4, 2011 - 11:02 pm

Hi all,

Let me throw my 2 bobs in, too.

I have never attended a seminar in my life. Oh, I did once out of curiosity.

The speaker claimed to own many properties . He talked about the benefits of property ownership, quoting a lot of his facts from Robert Kiyosaki, who we all know is an AMERICAN.

I was laughing my head off because so much of what he was saying DID NOT apply in Australia. It took all my self-control not to get up and challenged him. Maybe I should have because to this day I’m still praying no one sitting there that day signed up.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 4, 2011 - 9:37 pm

Hi smart GenY,

You have provoked some good discussion… that’s is good in itself.

In answer to you question (prediction): @angelinsydney – In the coming years there will be a record numbers of retirees. I am willing to bet my future that there will be enough of them with negatively geared IP who wont have the option of holding and will “realize” their gains, resulting in an over supply of property on the market. Are you willing to bet there wont be? Alternatively if I’m wrong my “opportunity cost”, I’m sure will be minimal, will yours if your wrong?

Firstly, I don’t hold solid statistics but my gut feel tells me there aren’t a lot of boomers, soon to be retirees, who have or hold negatively geared properties. There is not enough of them to make a dent on the marketplace.

There are more of them who will be down-sizing from their own residences. But my gut feeling also tells me that their children will prevent them from selling the house if it means diluting their inheritance. Their children, at least one of them, will have an interest on the house. Why sell a good asset and then buy someone else’s crap?

Sorry to disappoint you Smart GenY, the prediction is not going to happen.

Take care.

angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 4, 2011 - 9:28 pm

Dear dugsts,

I recommend that you start planning on an EXIT STRATEGY quick smart.

The longer you dilly-dally, the more losses you will accrue. Does the contract preclude you from hiring your own project builder? If not, See if you could start construction ASAP with another builder. And, check if you can afford it.

Try not to panic. Panic will get your heart racing so fast you can’t hear yourself think.

I recommend you see some of the members who are mortgage brokers.

I can’t stress it strongly enough – EXIT STRATEGY – NOW!

Take care,

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 4, 2011 - 2:41 pm

Hi Jamie,

I suspect the low result for Queensland is due to flooding and continuing bad weather. Hopefully, for our Queenslander friends, blue sky is coming soon.

Angel.

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 4, 2011 - 2:13 pm

Hi Ryan,

Of course, you have my permission to use this in your blog. The more people become educated, the better.

Hi Jase,

Agree with you. Negative gearing is just a sexy word for “loss.” A loss is a loss by any other name. Yes, the more we can persuade people to be wise with their money, the merrier we will all be.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 4, 2011 - 1:57 pm

Hi all,

This is amazing read…. lots of fun really.

Well, I did work as a banker, a financial adviser and a mortgage broker. But the role I’m most proud of is being a MOTHER. So, my sole contribution to this very cerebral debate is this:

An old, proven proverb: Don’t put all your eggs in one basket.

Regardless of where we are in the economic “clock” it is best to have a little bit in cash, a little bit in super, a little in gold and jewellery, a little in blue chips and mining shares, a lots in real estate.

I’m not an economist, but I’m feeding, clothing. raising four kids. So conventional wisdom tells me, that whatever happens in America, I still want to spread my goodies all around.

Not so cerebral… just practical.

Carry on you intellectuals, it’s a fun read.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 4, 2011 - 1:34 pm

Hi,

Personally…. I wouldn’t do it. Na, a! Keep $26K in pocket and whistle away.

My suggestion, this is NOT advice, put $26K as deposit on a Port Lincoln house in South Australia. Yummy!!!

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 3, 2011 - 2:59 am

Good on ya, katiedee.

Hopefully you get some business.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 3, 2011 - 2:42 am

Hi Linar,

You can google “David Baird” and see what comes up. Also, you can check with ASIC whether he or any of his companies has any past issues. NSW Office of Fair Trading is also a good source (if his business is registered in NSW). Other states have their equivalent fair trading department.

These government offices have a means of tracking down people doing bad deeds (assuming they’ve been reported).

Good luck with your efforts to check, you are doing the right thing. Unfortunately, I don’t think any of us knows him so can’t give personal recommendations.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 3, 2011 - 2:35 am

Hi Personal Leader,

You’re forgiven for the call caps.

Valuers are very hard to please, especially when banking lending policies are tight. They are licensed and the bank “job” is their bread and butter and will not willingly jeopardise that. I’m afraid there really not much you can do but help make sure the property is clean and tidy. But that probably won’t be much of a muchness.

Mortgagee in possession usually sold at auction because the bank would still want the most they can get from the property. It is rare for MIP to be sold on private treaty (in Sydney, don’t know about the other places). I’m happy to be corrected.

What’s the guarantee that people will not go crazy on auction day? MIP aren’t the bargain investors hope for.

I’m sorry for the sellers predicament, hopefully she gets something in the end. My heart always goes out to people who loses their house.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 2, 2011 - 9:29 pm

Hi rc388,

You are correct: The bank calculates what she can borrow by taking into account all loans taken singularly and jointly. Your situation is a non-issue provided if wife’s income and the rental income combined can service the debt levels for both PPoR and IP. But if it’s not…..

Is there a strategy in play here? Why the need to transfer half of the IP to Mrs?

Before you do anything, speak to your banker, who hopefully knows you best and your circumstances.

Take care,

Angelina

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 2, 2011 - 9:24 pm

Hi all,

I’d like to add my 2 cents worth.

Personally, I have one handyman who does all the work for me – except properties inter-state. He is wonderful, kind, and does what he promises to do ON BUDGET and ON TIME. And he knows my properties inside out, this is important to me.

Second, it does costs money to run a business. The bigger the business, the costlier it gets. My handyman charges “lower” than most because he’s a lone ranger. Pays no salary, and lower overheads.

Let us never assume that if a tradie ask for $20K, that all of this goes to his pocket. Likely, not. So if you want lower costs, use the same person all the time, and make sure he is a lone ranger.

Maybe I’m wrong – but it works for me.

Take care all,

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 2, 2011 - 8:59 pm

Hi guys,

I’ve been out of the game for 5 years or more. Back in the days before GFC, we didn’t ask for proof of savings if its 80% gearing. Has the rule book changed? Do banks require proof of savings now? That seems to be the drift I’m catching.

Thanks

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 2, 2011 - 8:38 pm

Hi Pommy Ian,

There’s no such thing as “missed a boat.” There are many boats leaving the piers everyday, and many more loading.

Research, research, research.

Read as many threads in this forum as you can. chances are these questions have been answered in one form or another” “Also what type of house would make the best investment, location, size, cost etc?”

I don’t anyone can give you advice on specific suburbs, only you know best. Hopefully, you are doing your research and your math.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 2, 2011 - 8:13 pm

Hi all,

Where am I? Surprisingly, I received no “offers” from Forum members. But on the other hand, i wasn’t surprised either as it’s not positively geared enough.

I emailed this same info to some young guns I mentored in the past. They are not members of the forum yet but I am encouraging them to become so… both to give and to receive education.

Here are the “counter-offers” and they are interesting to say the least.

Young guns, when they put their minds to it, can deliver the goods. I have to say all of them interest me, in one way or another. I will pick the “winning offer” by mid-April (that is if no other offers arrived in the mail – Email).

Young gun 1: (23, Female, no property yet). She did the calculations. Well, we sat down and did the maths together. Her offer: I keep the property in our names (business partners and I). Sign contract at $1.72M (three years settlement). She banks $500 a week towards the property as forced savings.

Pros: She only loses the accumulated $500 per week if she backs out ($26K if she backs out in 52 wks)
Potential of property to grow more value in 3 years (we estimate closer to $1.8M to $1.95M)
She can on-sell before the end of 3 years (We will take ours, and she will take hers)
She doesn’t have to pay stamp duty

Con: How to do a contract for this type of “creative thinking?”

Young gun 2: (25, male, has one property). His offer, $162M. He borrows 80% from the bank. I vendor finance 20%. He basically owns a million dollar property for the price of the stamp duty and other costs. The rent return pays the bank loan and out-goings if he could get an interest of around 7.45% mark 3-year fixed. Due to his existing home loan, he can’t afford to pay the vendor financed amount. No money to spare. His solution: “Instead of giving you payments for the 20%”, he goes,”Why can’t you be a silent partner and continue to own part of the property?” Fair enough! Why not?

Pros: The title transfers to him.
He is neutrally geared for a million dollar property
He knows I’m always around to be his mentor

Cons: How do you prepare a contract to reflect this arrangement?
What’s a fair split? Considering he practically got it for nothing and costing him nothing to maintain?

Exit Strategy: Review his portfolio in 3 years time. When he has enough equity, he will buy me out. Pays me back my 20% and the capital gains. If there’s not enough, we carry on as usual.

Young gun 3: (28, male, has 3 properties). His proposal: I’d rather not say as it can be hinky. It appeals but this would have to be the last resort. If you’re intrigued PM me.

It goes to show that it is possible to acquire a million dollar property – safely – at a YOUNG AGE. You just have the audacity to ASK. No harm asking. These young people cared what works for me but they also know what works for them. I was mighty proud of myself as i was the one who taught them.

To be honest, the deals don’t give me anything much but I have no financial issues. I do however want the cash flow as I want to invest overseas and continue to venture into new areas of investing in Australia. In the main, I want to get rid of our crippling NSW land tax bill.

I will give you more info as time passes. I suppose by mid-April, we should all know where we are.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 2, 2011 - 6:44 pm

Hi Octain,

I’ve been out of the game for awhile (was a mortgage broker) but I think you can’t get a residential loan for this type of purchase. Eight units in one block on one title screams “commercial” to me.

Did you mean to tell me you didn’t get a pre-approval before buying?

Hopefully you have a lot of equity on your PPoR because it’s the only way to get a residential loan. Being deemed a commercial property, you can borrow less in terms of LVR before LMI kicks in. Well, this was way back when….

Those who are currently doing it should be able to give you more up-to-date lending policies.

Take care,

Angelina