Forum Replies Created
find me any house that is $100k with 180/wk rent and I have 6 buyers for it.
that is 8%return anyway and as the loan is 7% management is 0.5% your contribution is rates and maintainance/reno.
I’d still say this was a yummy deal in todays market.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Wife and I are always asked why we have our loans in personal names. It is easiest and quickest to get a loan. Some lenders now charge upto $1500 to read your trust deeds prior to approval of loans, some lenders then say no to trusts anyway just to piss you off. Icing on the cake is when they know you are urgent and the loan is delayed 2 weeks until someone works out if your trust documents ar ok or not. Arghhhhh.
Buying in joint names is ok at the start but you really need to assess if a lender will lend to each of you separately as this sometimes speeds up your portfolio expansion.
We were once told we are using the LODOC loans to the letter of the law, but not in the spirit in which they were intended. Who gives a rats bum what the banks think as long as I get that all important loan in a timely manner.Didnt laugh at that one until out in the street.
Happy hunting
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Seminars schmeninars. All you get are promoters selling dud products at inflated prices. Its now happening online as well. One such is a new 22 townhouse developement in Waterford West qld. It has purchase price at $205k with all sorts of wizbang assumptions on occupancy etc.
Now guess what, thats one of my ‘pet’areas. There are 4 stages of this developement in place and they were completed 4 years ago. Current resales on offer for $130k and $135k. So even from a 2 minute chat with one of my agents it was vitally clear these were being what I call “bunny marketing” as in lets find some stupid bunnies.
Cautious approach and never taking the marketing blurb at face value is the best approach.
So ok there is a $70k margin in a slowing market on these townhouses alone. I know there was 1 sold off the plan at $175k before he hiked the price too. Always do your own research, never be afraid to ask difficult qiestions, phone 3 other real estates in the same area and go for it based on information not supposition.
Good Luck
DD
Don’t sweat the small stuff,and it’s all small stuff!!
$100k investments is what I find for people. Maybe Derek for finacial advice and me as the spotter?
DD
Don’t sweat the small stuff,and it’s all small stuff!!
OK Minimogul is right get the numbers and get someone else to do the looking at the property. When you are new you have to touch it, once you have done it a few times you have to see an image only, finally when you are comfortable its only a houses numbers that matter.
Wife and I bought a house in Jan in tassie, still havent seen it or need to. Its $27k heavier than we bought it but at this stage we are very happy.
good luck all
DD
Don’t sweat the small stuff,and it’s all small stuff!!
no land tax threshhold at all in Tassie too so be careful about each area you invest in.
Use equity, buy the bloody thing in your own name. Rent it to your son on the proviso that if he saves deposit, when he gets there you will sell him the Canberra house for what you bought it for plus only 50% of the cap gains between now and then. This will do two things.
Train him into getting his own finger out, and give him an achievable goal with good benifits.
Hey if there is no cap gains you have no loss and he gets the time to save for the house.Worying about the neg gearing tax break means you are thinking small stuff not big picture. If you rely on any govt, they will only change the rules again.
Good luck
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Good ad vice Derek, also I have a policy of never throw away a valuers number, you might find that your next lender uses the same guys and a little market research with agents in the area faxed thru to them will aid your case for a good val.
I have 9 IP’s in Ipswich area(has 11 but just sold second to fund own home purchase) and have 6 differt valuers I chat to whenever I need an extra $5k here or there when im going through the peel funds out and go again scenario. If you dont get outlandish in your requests they are usually nice people and reasonable with the vals.
Good luck
DD
Don’t sweat the small stuff,and it’s all small stuff!!
god guys did you actually read the question. I have to wonder about your ethics if you recommend to someone about to loose 1/2 the family income to a new bub(we had that 4 years ago) and you recommend more than an 80% lend.
Madness, sheer madness.
I wish that you guys were in their particular shoes for just 12 months without your high income and wild recommendations.
Do not if your circumstances are changing go for a total extension on ‘whats comfortable now”. This changes in September so for goodness sake back off with insane recommendations you guys. Unless their new IP’s get them remarkable rent they would actually thank you now and curse you shortly.
Geez, with a $300k on their home I agree go for a $100k loc as deposits but get great returns or kiss the comfort goodbye. I dont care what little Johnny and Mr Smarmy Costello are promising as a sweetener for new babies, I really think you are mad not to get something but a cautious something whatever it is.
Sorry to get heated but wild recommendations really upset me.
Congrats on your baby, we used ours as an incentive to really go for it in property. We are doing ok so basically go for it but be a little sensible at times.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
what city are you in. Please PM me as then your personal details are confidential too.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Wow, what a great start to own a house outright.Ok well I would get a loan on this house at 80% LVR(loan to value ratio)Banks are usually happy to do this as interest only(IO) if you get the right deal. So you have say $240k out of a house worth $300k you can use.
The reason you do this interest only is to minimise what you pay into this loan, which maximises what you have available to service the investment loan(s).
Now this is the scary bit for most new investors so take a deep breath first………………………….ok, now with the $240k what you really have is the deposit @ 20% for 10 x $100k homes/units/townhouses with $40k for legals and stampduty.
Got that……..10 homes as investments now. So with this example you have settled on 10 homes all starting at $100k or thereabouts. Given that all property doubles in value every 7-10 years on average world wide for the past 200 years you can usually bank on this happening every 10.
So in 10 years time just by structuring correctly your humble home instead of breaking your backs to pay one off then go again so you maybe if lucky end up with 2 or 3 in 10 years, you have 10 with a 50% LVR and all the banks will love you.
So somewhere in all that you have choices, options, and a loife without stress, just a clear sailing to retirement.
Me on the other hand have pushed and nudged and stretched every minute of every day and have sped the process up a little.
So with 10 houses in 10 years each paid off 50% with no more money down except for maintainance, you can then sell 5 to own 5 and sit back. Option 2 for me says go again and again while you can do it comfortably then when it gets a bit tougher, slow down then.
Disclaimer disclaimer. This is not advice, this is one mans opinion on what to do in your situation, nothing more.
But again, well done or being where you are and having goals. Its a big step above the average already, so keep climbing.
DD[biggrin]
Don’t sweat the small stuff,and it’s all small stuff!!
As subdivision costs are usually quite high depending on location, be careful to know your councils actual costs before working out your profit.
You might be happy or dismayed. Hope its the first.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
those who fail to plan plan to fail!!
wife and I change our property plan weekly. Now taking two off the market if 3rd sells. Upping vals on other property to release greatest cash.
Paying down PPOR in big chunks is gooooood!!!
Too much debt = sad investors.
Cashflow rules. So rent yourself and invest might be a solution for some. $50k is 2 houses worth $100k each plus costs as investment. Or $50k on 1 house for you with no tax benifits. So status quo is you stay where you are comfortable now and any surplus goes into investments. In 6-12 months go again and buy 2 more off equity in first 2. Then it perpetuates itself onward and upward.
This to me is a plan.
Go buy houses and have fun.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
If your partner is a partner for more than 12 months its deemed to be a defacto(god i hate that term)relationship. This could mean that your tax could be viewed the same as a married couple. Check it out. Couples get tax breaks.
Use every cent you earn, declare the lot to the tax department and get property investing as soon and as much as you can. We took 6 months of not going out and baked beans on toast to get our first deposit, were still short and said halelulia credit card for the last $500.00. It took us 13 years to pay off our home in Sydney which we are now selling to fund our new house in Coffs.
Dont listen to others who say you cant, listen to your heart which says you can. It is hard to start but it is sooooooo worth it.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Canberra, cold, planned, antiseptic. Great to invest if wanting negative cashflow. HMMMMM Canberra!!
DD
Don’t sweat the small stuff,and it’s all small stuff!!
good point, we had a deal that on getting pest report, tree outside had termites and needed dosing asap. Full barrier was never done and it was 14 years old and ready to be a target if nothing done. Cost was at vendors expense $1320 straight off the already agreed purchse price.
So, with your not approved building you can
1)go ahead as is. This is an option if pressure from other buyers on property.
2) add nto contract as previously suggested all approvals prior to settlement required.
or 3) In some cases where the building has been there for more than 10 years the council will happily retro certify for a couple of hundred $$.No biggie is it? Buy houses, have fun!
DD
Don’t sweat the small stuff,and it’s all small stuff!!
1)Do the sub divide
2)sell the backyard
3) pay off PPOR
4)with $210k left(my calc) you have the perfect opportunity to a) do duplex on dads land(get a contract with dad first), b) reduce IP’s debt substancially whch you do get a tax advantage from(none on your PPOR), c)think outside the square for a minute.If c) then $210 gets you 10 positively geared investments in NZ and im not sure on Cap growth there yet, not enough research done by me yet.
OR 8 x $20k deposits($100k each buy) on houses/townhouses in good cap growth areas in qld. with $50k left for renos and cost buffer.So goodbye Centrelink, hello cashflow+ve with tenants now, no delay in funds in building duplex and no possible headaches with Daddy.
End result not 2 but 10 investments getting you great $$$ in as well as 10 asssets slowly increasing in value. Go figure what Id do. Easy call.
DD[buz2]
Just a thought. Daddy could possible borrow off land value(i assume he owns it) and then do the same with a few +ve investments himself.
Don’t sweat the small stuff,and it’s all small stuff!!
Happy thoughts to those posts that didnt live to see the day. I just looked at this for the first time and it looks like a warzone. Good move Richmond in placing a balm on someones touchy points.
Lets all face it, being passionate about property is wonderful, the fact we all think differently is bliss. If we were all the same then no one would get anywhere.
Lets all be good little investors and enjoy, not critisize, each others input, however different from our own views we see it as.
Viva la difference!!!![bonjour][whistle]
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Cool this helps my forward thinking too Daven. I have relos in the UK and am looking to invest there. Can get an expat tax break there as well so always happy to see what others have knowlege on first. An informed decision is better than trying to stab in the dark.
Russelld, could you let us know how you go in the UK re property please.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Partnerships of any kind have a danger aspect. One of you could get married, loose a job, have a boating accident with a propellor, anything could happen. Thes wildcards could adversely affect the joint venture/partnership in many ways. Great idea to save oncosts but if you are doing anything like this, emotion plays a part for most first investors. It could affect the friendship too.
Just be careful, get a contract between you before you sign anything else but most of all have fun.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Hi guys DD with a last post(pun) before Fiji tomorrow.
We are looking to do an 80% now 20% 12 months on our Sydney home. Its 5 bedroom 2 bathroom, dual driveways, covered entertainment area, good family area near schools and shops in a newer suburb in western sydney near the new Sydney orbital(about 2 ks) on and off ramps.Reason for this is that we have already bought a new home in Coffs Harbour and need cash now. Anyone interested please private message me so I can contact you as soon as we are back from Fiji.
House price reduced from $429k to $380k as we need the cash. Freshly painted including window and door trims. Tiled kitchen, dishwasher, Spa in 2nd bathroom, private parents access(shhh).
And a good size timber cubby we are leaving sadly due to sloping block in new home. Cubby has hardwood flooring with lino covering with grandmother made curtains and preschool paintings on the walls. Freshly painted inside and out last year. This cubby as possible second rental return (playmoney only) is great for the family buyer or the investor with an eye for a bargain. House has options too.
Sorry for the add but we eed a quick sale guys. Who better to ask than you all here.
DD[worried]
Don’t sweat the small stuff,and it’s all small stuff!!
