Thanks Jamie… I am glad to see you say this… as this is what we were thinking, but being new at this we were wandering if we were thinking wrong and doing ourselves no favours. So thank you.

I am still happy to see what others have to say… a good way of educating ourselves.

Anyone else have any advice/opinions?

Thanks Michael… what is involved with a construction loan… how is this seen to be different from the banks point of view to the ‘original’ mortgage/loan for the property? SSorry if this seems like a very basic question, but this is all new to us and we are keen to learn as much as possible so as to make an informed/researched decision.

Thanks Catalyst

From all the reading and researching and talking with people in the IP market with investments in the areas we are looking at, and with discussions with wealth advisers, and with discussions with buyers agents… we have a good understanding of the areas we venturing into. We are very aware of rentals and projected CG in the areas in and around our IP1. We are also aware of what buying off the plan can mean for our IP2, and yes we have researched similar properties in the same areas and what they are renting for and we have looked at projected rent yields and CG for the Gladstone/Boyne Island area.

As for us offering a price in the mid range for IP1, yes we realise what we were doing and we hoped this was the exact price the vendor was looking for, they wanted/needed a sale. There were other offers on the day. We were their best option even though we offered less than the other 2 offers (each were relying on the sale of other properties yet to be put on the market) so they accepted our offer, it was on the money, clean, easy and could be complete in their preferred timeframe. So no not a bargain but we believe a great property, and for us a good one to go to the bank with to get our portfolio started.

We had thought about injecting more than 5% BUT we read and are told so many times that the less of our own funds that we inject into an IP the better. So go figure!

Anyway, we just have to wait and see what comes back from the MI, hopefully tomorrow.

I have to say… I really wish the whole IP process was straight forward but when I read all the differing opinions in these forums, it is anything but… no wonder so many people don’t even bother!

Thanks again.

Correction – my post @ 1.37 today.

Point 5 – We have paid a total of $1500 for building/pest and conveyancing (not $100… typo with the 5 missing) 

Thanks quickchick… I think I must have just posted my lost comment as you were writing yours…

I appreciate that we have to prove up front our funds immediately available for IP1, for the bank to be happy we can cover the costs and not be seen as a risk and allow all boxes to bew ticked to ensure we get formal approval. And we certainly have done this.

Our purchase is not based on the promise of a bonus… the bonus will arrive in time for us to fund IP2.
The bonus has a 2 fold effect of proving to the bank that employment is retained for my husband guaranteed/agreed for a minimum of 5 yrs. Maybe this means nothing to the bank but we can put it forward.

For IP1 we are relying on our savings, which more than covers all assocaited costs, as explained above.

But then maybe we are kidding ourselves… about IP2 and a possible IP3 withing the next 2 – 3 months.

Thoughts???

Thanks again

Richard

Thanks for your input… but if you read the entire thread and what i have siad, I have already answered what you are asking.
There is no PPOR.
We are not putting the $50k (after tax) into 1 property.
We have a letter as proof from employer (employment retention benefit bonus) to say this is guaranteed.

Thanks for suggestion this course of action is ridiculous (even though not entirely an accurate observation of facts)… not so sure how this is at all constructive feedback!

Just looking for some hints and tips and insight from people in here that can shed some light on our first step in to setting up an IP portfolio… not necessarily tell me I am ridiculous.

Thanks.

Thanks Jamie.

I should have been clearer and offered a bit more background… when we met our broker for the first time )a Thursday evening) we were applying for pre-approval of $780k. Our broker said everything looked great, start looking for a property or 2 or 3 if you wish.

My husband and I got excited that night and that weekend and we found IP1 and didn’t want to lose it ( we had been researching and looking for several weeks but now felt we could choose). So on the Sunday we put in an initial offer expecting it to be knocked back but it was (listed as $285k ~ $309k) accepted at $297 straight up. Based on the fact that we told them we had spoken with our broker and we had been told ‘verbally’ that we had pre-approval, could settle in 30~45 days and not depending on another property to sell, to allow us to make this purchase (the vendor had another offer of $298k but that party was depending on another property selling to fund the purchase so they liked our offer better).

Before our broker had a chance to submit the ‘pre-approval paperwork’ … we asked husband’s brother if he wanted to get in to the market as well and join us on this one (just to give him a chance) but he couldn’t decide, probably a blessing in disguise (not getting family involved) cooling off period was ending, we had to get back to the broker and the REA, so we went back to the broker and she said … ok lets not go for the pre-approval right now lets just submit the application for IP1.

So in summary:
1. We have found IP1 and have conditional approval from the bank, waiting for the property to be assessed and approved by mortgage insurer (fingers crossed)
2. We have found IP2 and have placed a holding deposit, but think we need to wait for IP1 to be ‘a done deal’ before we submit application for IP2. This might be pushing it but we want to try…
3. We are thinking if IP1 and IP2 are accepted, we will look ASAP for IP3… but nothing as yet, just thinking…

Should we consider putting in more than 5% towards each IP?
But from what I have been reading, the less we can put in the better to help diversify our portfolio.

But Jamie, as you say it all comes down to what the mortgage insurer says… I really hate this waiting.
Maybe we are trying to do too much too fast…

Thoughts, ideas, suggestions anyone?

Thanks heaps.

Dragonflyz

Oh additionally… we are expecting a bonus through my husbands salary to be made available to us come 7 July, of approx $50k or a little more. So although we don’t have this money right now we are hoping the bank might acknowledge this (for example if we can present them with something in writing from his employer as proof of the agreed bonus payment due).

How can we make this ‘bonus’ start working for us now to help ensure we can buy IPs now rather than waiting until mid July to do anything?
Or do we just have to wait and be patient?

We are trying to look outside the box and tap into possibilities rather than sit back and wait and wish we had planned better.

Any advice/insight?

Thanks heaps!