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Just my opinion but the key is to learn and grow – it is great to follow as long as you don't find yourself becoming a disciple of any particular person. Personally, I have paid for and read many books and attended many courses and no one idea is any better than the other.
Have a look at what the large international companies and large Australia grocery companies are doing. If they are building new supermarket and hardware store than someone has already do the risk analysis of the effect of the bypass for you.
replytokat (nice name by the way),
Have you considered commercial property? If you could achieve a 10% net yield on your cash with capital growth potential would that do the trick? Could leapfrog into others and base the future borrowings on your properties income rather than your income.
If the valuations on NRAS come in low and you have comparable sales to support your investment decision then it is time for a new lender. If they come in low and their is a good reason then time for a new property? Have just switched lenders on a nras deal and what was short came back at purchase price. No probs deal done happy client ready for the next property.
You could also do 90% plus lmi plus 20k if the extra is needed/suitable for your purposes – forward planning will also dictate if lenders that allow the nras incentive to be used for servicing are required now or later.
My point of view is that you have to define your exit strategy and work backwards. What do you want to achieve and then look at how to do it. If you have a mindset that one thing is better than another then it probably makes it a bit hard to have enough creativity to get out of the rate race. People somehow think that cashflow and capital growth are mutually exclusive. This is not the case especially in todays market. I thinks Steves first book was largely misinterpreted.
The are a lot of detractors of the idea of cash flow investing but ask yourself. If I lost my job tomorrow who will pay your investment loans. If a plan relies on you having to continue to work until to pay off your portfolio then you just may as well buy all your properties inside you super fund and forget about it. Cash flow is oxygen. I think part of the answer is that building a cash positive or 100% self supporting portfolio is about twice as hard as doing it the other way. That is the only difference. This is the main reason people don't do it. Basically, you have to learn twice as much and work twice as hard. That is the only trick. However, at the end of the process you will either have the skills of about the top 20% of investors or a team with those skills.
Hi Guys, as first port of call I would get some valuations done to see what the real equity position of your portfolio is in the eyes of a potential funder. To be serious you really have to look at investments and funding that don't rely on you wage income. Low LVR commercial real estate – but only if you have experience.
Hello, Is it still true that banks have a resistance to loan for the purpose of NRAS investments? Are there any finance organisations willing to loan at comparible rates to standard investment property?
To answer that in brief – you should not be paying a rate loading for NRAS but to qualify this the type of property you buy and the consortium will dictate which lenders are in the mix.
What I am seeing at the moment with nras (and perhaps other people are too) is that there are massive differences in the quality of stock and the quality of the investment. Would you research and find a location that meets your investment criteria and then start looking for a scheme property in that location or are you just looking for a scheme property? Does your portfolio need the extra cashflow? How much skin do you have in the deal? Is it a stand alone deal or do you need to cross-collateralize with another property?
I would have to agree that there are still some big commission out there being offer in the nras space. Recently the customers who have the most success are those approaching the vendor directly. This is not difficult to do and there are significant discounts to be made. If you are considering building a portfolio that contains more than a few nras properties then the use of the incentive is key. A couple of the lenders going to 90% plus cap lmi financing are now offering 20k credit facility at closing charged at home loan rates. Could only recommend that in a couple of scenarios.
Vals are still a big issue in nras. Although I am not seeing very much overpriced nras stockl like there was a while ago. Great if you are not the first in and there are settled sales before you to help out. Although had one this week and that still did not help us with the valuer. It was an Adelaide product through one of the mortgage managers. Review+++equaled digging heals in further. Then on the other hand had a homeside deal come back low recently and we got the change based on some strong comps. Lower LVR though and it was a completed product rather than construction.
Pagey
You already have the answer here but you have touched on wanting some strategy/direction based on Steve's books.
Have a look at the following passage from his most recent.
Instead of trying to ‘buy’ your financial freedom by acquiring a large number of relatively low output positive cash flow properties, the new (and improved) model I recommend for going from zero to financial freedom today has these three steps:
1 Acquire an income accelerator to supplement (or perhaps replace) your earned income.
2 Invest in ‘generic’ or ‘manufactured’ growth assets to accumulate an asset base.
3 Once you’ve achieved the required asset base, redeploy your capital away from growth property into debt-free positive cash flow real estate.
McKnight, Steve (2012-11-13). From 0 to Financial Freedom: How to Do It Today (Kindle Locations 442-448). PropertyInvesting.com.
What we need to do is constantly be assessing how our capital is being used.Can it be put to a better use? Can you get a better return? How is this investment going to get you to your goal of financial freedom?
I found the book a good read and a sound broad approach.
I have purchased a few of these reports myself in the past. What you are getting with these reports in particular is well researched data. You are getting a broad overview that would be a starting point in the due diligence process. The test would be to buy a report on a market that you know well and see what you learn.
Julieanne – maybe just talk to him. It sounds crazy but if it is not a good fit he may move on if you discuss your feelings about the issue. You have to consider the safety and well being of the other occupants and the effect that his behaviour may have on them.
If you are going to go down the formal path consider how time consuming and expensive this may be. Record keeping is really important. As stated it is a matter for the cops. Someone may receive a very large power bill as a result of the indoor garden so try and make sure you are not stuck with it.
