Hi PS,
As I understand it, the AGE of the property gives a clue to the likelihood of asbestos. I own a house built with “hardiplank” (James Hardie Industry created this weatherboard, and in the early days at least, it did contain asbestos). In previous checking, I think I recall anything created in the 90’s is OK, late 80’s may be OK, but prior to that can contain asbestos.

The date of construction would be the first place to get some idea – after that, a $200(?) test will determine it for your peace of mind,

Benny

Hi Chat,
Awesome to see you working it through. Your diligence is going to pay you handsome dividends, so do keep it up.

To your concerns :-

1. My fear is that once this interest only period ends – the bottom has fallen out.

Good thought – now check things out to see if “the end of an IO period” is actually THE END – hint, there are ways around this.

2.Now the first issue I have with this is that if each of these properties hasn’t risen in value or provided cashflow that totals more than associated costs of purchasing the property – stamp duty for example – then it really wasn’t a good investment

Keep in mind the deductions that exist (benefitting investors who provide housing) that will take a lot of sting out of these costs. e.g. Did you know that it is possible to have a negative geared property that has a positive cashflow? One to think on, or read up about !!

3. The second issue is that if I am using the positive cashflow to support other negatively geared properties and that cashflow disappears then again I’d find myself in a detrimental position.

Good point – CASHFLOW is Numero Uno, and the lifeblood of investing. Cashflow can come in many forms – have a think about the many ways this can happen. Some may be in weekly dri bbles, while others can be in chunks !! And yes, you are right that losing one positive geared IP can have a snowballing effect on other IPs held.

4. Looking back on my paragraph – the only way in which my strategy will work and continue to work will depend on my ability to a) source positive cashflow properties (with every interest rate point rising, this will become more difficult) and b) ensuring that each property I buy stands every chance of rising in value above the associated costs of purchasing it before the interest only period ends, and of course successfully selling each property in a timely fashion (just before payments are due to switch from IO to P&I) which in a fairly illiquid market could be easier said than done.

Chat, to that I will simply say “Your options are nowhere near as limited as that!” Find the answer to 1. and you immediately start to undo these limitations. And way before selling would come “adding value” I would think – that adds Income and Equity if done well. Get those two working for you and Cashflow gets enhanced. With enhanced cashflow, you become unstoppable (within reason).

Keep on thinking and reading, grasshopper – to learn, much there is !! (in my best Yoda voice)

Benny

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Hi Coogee,
As Jamie said, asbestos is still quite common. The places where yours was found are in quite inaccessible areas – i.e. inaccessible to most people.

Where asbestos is so dangerous is where a youngster might “play” – digging at walls with sharp objects, etc before they are old enough to know “Don’t do that!” In your case, the asbestos that has been found is where it can’t be “attacked” easily, thus it is a pretty much a non-problem. I would not be “pulling the pin” over that finding.

Benny

Hi JJ,

Stegbar installed the glass windows and doors to my property but they were not been paid by the original builder

I don’t KNOW, but I would think QBCC should be able to do something here – aren’t they “taking over” to basically make good what the first builder did/didn’t do? I would think that would include making payments to those suppliers who hadn’t yet been paid(??)

That would be where I would go first up. Hopefully others who KNOW might pop up to offer alternatives,

Benny

Thanks for all of you who have added your thoughts above. What a huge selection of positive comments after what sounded like a huge effort on everyone’s part, whether a presenter or an attendee.

Just reading this thread has fired me up – but “being there” would mean so much more. I must make the effort to get to Melbourne if this were offered again.

But now, this thread has dropped off the front page, and I was wanting to read more…. so here is a “bump” to bring it back into the spotlight. Please add YOUR thoughts, if you haven’t already….

Benny

PS And down the track, I would love to read of the actions that followed this Bootcamp, and the progress made by its attendees.

Hi SM,

It’s in a large block of 200+ high rise and It’s not due to be completed for about 2.5 years

This sounds like the kind of property that they sell to overseas buyers. Could that be a market for you? Maybe approach Ironfish to see if :-
a) This can be onsold by them to an overseas buyer, or
b) Can you onsell it to someone else, and if so, thru whom?

Keep in mind that if you settle on it, it is then “second-hand” thus it is no longer one that can be sold to an overseas investor – so your potential marketplace is cut in half (Aussie buyers only). I would think making every effort to find a way out now woud be time well spent…..

If it is 2.5 years before it is even built, what WILL be its value on completion?

Could it be worth $420k by then? Or $350k? If the latter, HOW do you settle, even if you wanted to? If you don’t settle, how much does that cost you? Sorry, SM – I don’t have a lot of answers, but those are a few questions that I would be asking if it were me. You may have broken an egg – the trick now is to endeavour to make it into an omelette !! ;)

Hopefully others who might have faced this very thing themselves might pop in with a few more thoughts.

so also thinking of opportunity cost and what that $40k could be used for in the meantime.

Good to hear that you are already looking at the whole situation. That could even include bailing at a loss (if so, how much loss?). And what if it would cost too much to NOT settle? What then?

Good on you for considering your position – look from all angles. A poor decision early on is recoverable, even if painful – and you will LEARN SO MUCH from it. So look on this as a learning curve – how to make the best of a mediocre/poor situation.

Benny

Hi VeeR,

Your descriptions sounded like a thread we had on here a few months ago, so I went looking :-
https://www.propertyinvesting.com/topic/4399106-uretek-anyone-used-it/

If you go to the Forum pages, use “underpin” as the keyword and press Search, you will have a number of threads pop up. The one above is the one I remembered, but there are a number of others.

And yes, I’m with Patrick – isn’t a new home warranty valid up to 6 years?

Benny

Hi Liam,

What if i just buy 15 properties, all cheapies, all in high yield areas.

Maybe something like this bloke did?
https://www.propertyinvesting.com/topic/4410441-thankyou-steve-mcknight/

His were all cheapies in high yield areas – and then he forced some equity by renovating in some instances. Could it be done today? Hmm, I would think so – though the timing right now is not as ideal as it would have been even a year ago.

I would think doing similar types of deals should still be possible though.
Benny

Hi Don,
Thanks for letting us know of that failure. I passed the info on to Admin, and he tells me he has now fixed that link.

Benny

Hi Dboyle,
I am sure there would be many on here who could learn things from you – for one thing, how to succeed on a wage of $45k maximum.

Like many who come here to share their experiences, why not jump in to answer questions of less experienced folk when their question is one you have particular knowledge of. Your answers can provide help, and you can derive the pleasure of knowing that you were able to lift someone else up to a higher level today.

Who knows just where such a hobby might lead,

Benny