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  • Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
    Join Date: 2005
    Post Count: 51
    June 30, 2005 - 11:19 pm

    I’d be pretty hesitant to employ a strategy of drawing down equity to fund my retirement. I’d like to think that at the end of the day I could live with a comparible lifestyle to my current one, and be able to leave a generous nest egg for my kids.

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
    Join Date: 2005
    Post Count: 51
    June 27, 2005 - 8:55 am

    As far as I am aware at least one of them needs to be an Australian resident before they can receive the FHOG.

    Profile photo of BorgInvestorBorgInvestor
    Participant
    @borginvestor
    Join Date: 2005
    Post Count: 51
    June 26, 2005 - 11:46 pm

    Before I go into what I have done so far, I’ll give you an idea of my finances before reading Steve’s books.

    Paye wage earner $55,000 year
    wife paye $35,000 year

    $5000 credit card 1
    $3000 personal loan
    $2500 AGC Creditline (27% interest!)

    Spent $110 per month on internet
    Spent $120 per month on phone
    Spent $50 per month on mobile phone plan
    Spent $30 per month on gym (didnt go to anyway)
    Spent $100 per month on cable tv
    Spent LOTS per month on eating out

    Managed to pay off ALL credit card debt AND Personal loans since then.

    Now spend $120 per month on internet & phone, prepaid mobile with incoming calls only
    Quit the gym
    Basic cable plan $46 per month
    minimise eating out, and budget the food bill much better.

    I also setup some automatic direct deposits from my pay each fortnight to subtract for electricity, water/sewerage, phone, internet, and insurance. That way I have much more of an idea what I have left for savings/investment, and incidental expenses, and wont be hit up with a huge bill out of the blue(Electricity/water was about $850 per 3 months, not a nice bill to look at!)

    After running with the new budget, and paying off the credit/loans my wife and I realised that we were no longer fighting to keep our financial heads above water! I have to tell you that that in itself was a great relief.

    Next step was to draw some equity from our home, so we refinanced with Wizard Home loans up to 80% LVR. This gave us $78,000 to invest/rennovate our home. $30,000 has been set aside to put in a new kitchen, electrical work, lighting, new hotwater service etc, etc(Value add). The rest is being used for property purchases to get us off to a rip roaring start!

    Following the positive cashflow principle we found 3 properties that matched that description pretty much through pounding the pavement and talking the the local real estate agents of the area we believe has good growth potential.

    We are currently in the final stages before settling on these properties, and have our eyes on a fourth in our home town, with the idea to rennovate and sell after 12 months CG + value add to bring it up to a neutral geared position.

    All cylinders firing now, I have to keep the momentum rolling along…..

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
    Join Date: 2005
    Post Count: 51
    June 20, 2005 - 4:11 am

    DOE… next time I’ll do my subtracting correctly!

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
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    Post Count: 51
    June 19, 2005 - 1:03 pm

    I guess it all depends on the amount of risk you are prepared to take on board.

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
    Join Date: 2005
    Post Count: 51
    June 19, 2005 - 12:17 pm

    A good method of accessing this equity would be to refinance with your nominated loan provider. Generally you’ll only be able to refinance up to 80% of the current value of the property. EG:-
    .8 x 320,000=
    256,000 (refinance available)

    Current loan $230,000 gives you $16,000 available for use. You will need to subtract bank/lender fees from this $16,000 also for the refinance costs.

    Refinancing with a higher LVR is not advisable as the LMI payable will not make it worthwhile.

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
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    Post Count: 51
    June 1, 2005 - 12:16 am

    Think “Low Doc” loan.

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
    Join Date: 2005
    Post Count: 51
    May 30, 2005 - 12:34 pm

    You’ll find that there are wireless Access Points designed for Internet Cafes’ so they are feasable, and can be set up to charge by the hour.

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
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    Post Count: 51
    May 30, 2005 - 11:24 am

    Heheh… Resistance is FUTILE!!

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
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    Post Count: 51
    May 30, 2005 - 6:50 am

    Im just a bit worried about the lower potential growth. I guess you cant have high rental yields and high cap gains as well.

    Profile photo of BorgInvestorBorgInvestor
    Participant
    @borginvestor
    Join Date: 2005
    Post Count: 51
    May 30, 2005 - 6:47 am

    My suggestions for services would be:-

    1) Basic internet access
    2) Free email accounts
    3) Provide LAN/internet gaming to groups and individuals
    4) Basic vending machine food/drinks kind of stuff
    5) Wireless connectivity for those who have their own laptop computers.

    Etc

    Borg.

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
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    Post Count: 51
    May 25, 2005 - 6:42 am

    Thanks. I imagine that I could use the remainder of the 5% to offset my PPOR home loan.

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
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    Post Count: 51
    May 23, 2005 - 5:46 am

    From the sounds of it you Mum is under the impression that with an interest only IP loan her overall cash flow is positive. This is then placed back into her PPOR to pay it off sooner along with the regular mortgage repayments.

    If a property is Cash flow negative or Negatively geared by the very definition it is earning less than it is producing so there would be no cash benefit for the PPOR.

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
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    Post Count: 51
    May 7, 2005 - 11:10 am

    I will be getting a pest inspection and building inspection done definately. There are some minor repairs needed, but I can pretty much do them myself next time Im down in the area. I’m trying to negotiate for early access to the 2 properties so I can make the repairs/value add before the titles pass hands and I can get a tennant in the second $65k unit.

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
    Join Date: 2005
    Post Count: 51
    April 22, 2005 - 12:04 am

    Hi Joanne,

    First thing; I suggest you get Steve’s second book, as it contains a lot of good insights into the current property market. You probably wont find many properties that meet the 11 second test in the Brisbane area straight off the cuff, especially if you are looking solely on realestate.com.au. You need to get out and see some real estate agents in your area and ask them if they have any “problem” properties that they have found hard to sell. As Steve says problem + solution = profit. If you have minimal resources for a deposit/setup costs you may want to team up with a partner who has similar investment interests, this way you dont limit yourself only to properties 100k or less. Also, dont limit yourself only to residential properties, why not also look into commercial properties? Sometimes they can be more risk, but a good deal is a good deal!!

    Profile photo of BorgInvestorBorgInvestor
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    @borginvestor
    Join Date: 2005
    Post Count: 51
    April 19, 2005 - 1:51 pm

    I’m no expert, but if it was me this is what I’d do.

    A) Keep the property. As it stands you are reasonably close to breaking even already.

    B) Look for ideas to value add cheaply to increase your potential rent.
    – Get some cheap furniture and advertise as a furnished dwelling
    – Negotiate with the tennants see if there is anything that you can do to make them more comfortable for a small rent increase.

    After all the appropriate fees a profit of 15,000 can be eaten up very quickly.

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