Forum Replies Created
Thanks Terry, unfortunately thats what i feared.
When you say to go to a new lender, are you saying that when we submit paperwork for another loan, we only list our part of the loan on the existing property in the paperwork? What is the fallout from this should they discover down the track the real situation?
Have you had success in doing this in the past.
Dave.
Hi johann,
Congrats on getting into the property market at such a young age, its always the lament of the property investor that they wish they'd started earlier. I started roughly the same time as you, but even so, wish I'd started earlier. Quite impressed that you're able to save $25k per annum whilst earning $50k, some fantastic dedication.
As far as whether you should buy more property, this question is really hard to answer without understanding your financial situation and what you're looking at buying. You've really got to take affordability into consideration, assume that you're looking at taking out antoher $150k mortgage, you'll essentially double your outgoings on investment property, including your susceptability to repairs, damage to property, insurance, vacant property, etc etc. So you'll really need to crunch your numbers and determine whether another property is viable for you. It may be worth considering to sit your 25% in an offset on your existing mortgage and reduce the interest that you're paying on that property??
But if you're keen to get another property under your belt, and if the numbers stack up, then I can't see why you shouldn't buy another.
05 Subaru Liberty GT, beautiful car.
Hi Panda,
I use Michael Diamond of Diamond Partners, they're in Caulfield. I'll dig up their contact details when I get home and post.
Dave.
Definitely check with the council and/or an architect/draftsperson. Depending on the property zoning, you may not be able to subdivide at all, I know of some areas where the minimum block size is 300m2, so in that case, you wouldn’t be able to split your block. This will differ from council to council, so check out yours and see what they think.
D>
Further, in Frankston, there are different zonings that determine block size, I know that there are some places in Frankston that are very development friendly and have had block sizes as small as 250m2 post subdivision. 300m2 sounds like more the norm in the area though. Bottom line, if the council is saying that they won’t approve a subdivision, they are the ones that matter, so I’d probably leave it go.
P_hewson,
I’m actually doing this now, there are some important things to consider:
* Goals – Ensure that you are both aligned as to what your goals are, if not, then you’re not going to want to do the same thing and make the same decisions.
* Expectations – Set expectations early, be honest about what you expect from each other. You don’t want to get PO’d because you’re out there trawling the market every weekend while your brothers golfing.
* Structure – How are you going to invest , are you going to do it as individuals, partnership, trust, etc.
What I’d suggest is that you write a business plan, this document will cover all of the above and more. Even the process of preparing a business plan is a mini project in itself, this will give you an opportunity to see how you’ll work together early.
My brother and I work very well together, but this will differ on a case by case basis. I know family businesses that have failed and split up families, but also family businesses that have been very successful.
I think its important that you do the ground work to see how you work together, and also be honest and up front before starting.
Good luck.
D.
I’d get an architect to look at the property, describe to them what the council is said and show them the 32’s. Get them to measure up and see what they think. We’ve used a mob called Clear Design down there, might be worth a while.
D.
Can’t say I’ve noticed speed issues (I assume you mean loading speeds), seems to be as fast as ever.
D.Hi,
My brother used a company called Business Sight, they specialise in setting up tradesmen who operate as sole traders or small businesses and turning them into businesses. Their hook is “Be as good in business as you are at your trade”.
I’m not sure whether you’re a trady or not, but I know that these guys have worked in other areas and with other businesses, here is one of the guys details:
Miles Primrose
[email protected]
Mobile: 0418 3333 80
Office: 03 9817 6565If you could tell him I sent you if you decide to give him a call.
Cheers
Dave Robb.
More than happy to give you the details of a great architect that we used in VIC, depending of course where you are, buy we’ve had him inspect blocks in both Eastern and Western Melbourne, very happy with his services and instilled a lot of confidence in us when purchasing property for development purposes.
Let me know if you want his details.
Dave.
I’d also speak with an architect, I know that our architect has experience dealing with the councils and has a wealth of knowledge of past projects that may be able to help you out.
I also believe that some councils look favorably on North facing living areas, I know that our Architect is adamant that if at all possible that living areas face North.
Nat,
We did a similar thing, essentially we came to an agreement with the builder to undertake certain parts of the construction of a townhouse. In our case we undertook the framing, tiling, and some other work as we have team members with those skillsets. The way that we worked it is that essentially we will be sub-contracting to the builder, he asked us to quote on the work, we quoted, then he added our quotes to the tender/contract and the bank provides the finance on our estimates and we do the work.
This may also work for you if the builder is happy to offer this.
Good luck.
Dave.
Barbara,
Yield is essentially calculated by the following formula:((Weekly rent * 52) / Purchase Price) * 100
So for the above property
((410 *52) / 359,000)*100 = 5.9837 OR 5.94 rounded up.
Cheers
Dave.
dare_to_dream, a 6% yield is not a bad return, of course depending on where the property is, growth prospects. I assume that your calculations are not including growth prospects, tax breaks, etc, with that factored in, this property may pose a great opportunity to some investors.
That being said, its not my cup of tea, but I know many investors in Melbourne who would be pleased to get 6% yields. Obviously not enough for you (or me), but I’m sure there will be investors out there to whom that appeals.
Sounds good Jason.
Let me know when you’ve got some for sale and I’ll have a look, always need new ties
.Cheers
Dave.
Fair points from all before, one thing that you may need to look @ is serviceability. Obviously if you sell you will have to pay selling costs, cap gains, etc etc but you will also be able to pay off a mortgage, and then take your left over cash and buy further property. If you use the equity you will have multiple mortgages, this is obviously the goal of many people to use equity to secure further property and “leapfrog”, however at the end of the day you still have to be able to service the loans, and they are quite substantial loans from the looks of things, so nothing to take for granted.
Also, generally a RE Agents valuation and a bank valuation are 2 different things, check where you get your valuations. The bank valuation will tell you what equity you can access, a RE Agents valuation will generally be somewhat inflated (usually to try and get your business). Same with rental returns, try to get independent rental valuations, not a property manager/real estate agent trying to get your business.
I agree however, if you can afford it, use the equity and borrow the money for more property. Wash, rinse, repeat.
Good luck.
Interesting to hear LA, some valid points. Also interesting to read that his friends bought there in 2003 and have had no cap growth, but over the past quarter the area has grown by 40% or so.
The units I’m looking at have quite a good rental return, but horses for courses, unfortunately no one has a crystal ball.
I’ll email you through the info pack that I have if you’re interested and you can see all the details of the properties, a lot to re-type [thumbsup2]
Thanks for your feedback.
Dave.
G’day Chris,
Just on your comment on cap growth, the Herald Sun 8/12/2006 pg 21 states that Carrum Downs has had a capital growth shift of 40.3% growth over the last quarter. Looks like your friends may have bought during the level out and its back off again.
Dave.
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