Forum Replies Created
Are you being funny?
Essentially want to get the house protected to stop any "potential" termites from getting into the house and eating it.
None in there now that we know of. So this is purely proactive maintenance where there is known to be a high risk of termite infestation in the local area as per a pest inspection report.
All phone conversations are recorded now unless you (the customer) choose to opt out.
If you know the day and approximate time, they can dig it up and verify.
How do I know? Worked for one of the big fellas and help them architect the IT solution behind it.
Variation on this question if I may?
I am building my PPOR right now, due to be finished EOY09.
Keen to purchase investment property before PPOR is finished building.
IO Loan expected to be $500k. (~$210k paid off right now, expect to be up to $230k by EOY09 based on conservative budget estimates)
Highest tax rate and enough cashflow to fund the IP purchase up to around $400k reasonably comfortably.What is the most effective way for me to structure the loan to purchase the investment property?
If the home was finished, I would be thinking of an LOC on the PPOR to fund the smallest practical deposit with a different lender on the investment property. OR
Redraw the funds from PPOR loan to put into the IP loan?Any advice appreciated.
Emtpyvessel
I have a rather simple question;
For PPOR loan, any reason why you would choose a redraw facility over a 100% offset? {Or are these effectively the same thing under some circumstances?}
Main reason I ask is that this is exactly what I have done and it seems to be working perfectly. Loan is with the CBA under the full wealth package so I am free to pull money in and out at will without charges or limits. I put 20% deposit down to avoid the LMI, then once settlement went through immediately went in and dumped all my spare cash into the redraw facility.
Next step is to have all my pay/income automatically put straight into the redraw facility and setup various autopayments for myself and my bills. Far as I can tell, this achieves exactly the same as 100% offset for a PPOR loan.
Plan for IP is either to switch to LOC or just take some of the redraw cash and lay it out on a new loan. Haven't quite decided which yet and will discuss with my broker in detail before modelling the outcomes to help decide.Please clarify my thinking here. I am relatively new to the whole finance thing.
Educated myself on investment sooner and started in property earlier.
Would have had more deep and meaningful conversations with my dad.
OTher than that, life is fantastic. Great job, great and growing family and I am at the start of a very exciting financial independence journey.
Bring it on!
Great idea
SQM research has a free vacancy and suburb demographics search and reports;
http://www.sqmresearch.com.au/residential.php
I haven't tried their full reports, but the sample one seems to have a massive amount of detailed information. If they aren't too expensive, I think I will give them a go.
In further reference to this, see this thread, it is excellent. Also includes comments from various folks that have actually finished building and what the various "finishing" costs were;
http://forum.homeone.com.au/viewtopic.php?t=10990&postdays=0&postorder=asc&start=15
Gold.
I found a forum one homeone dedicated to First time builders and home builders. There are excellent blogs in there showing pictures and stories of the entire build process. Anyone new or clueless to building, I highly recommend joining up and reading, there are some really big eye openers.
By working through these I am putting together a list of all the "extras" to look out for an take into account. Seems to me that there is a vary large set of common extras to every new home being built.
http://forum.homeone.com.au/viewforum.php?f=31
Also gives good, bad and ugly stories on the major builders out there. Excellent stuff.
How did you go with Sketch-up? I took a look at it and decided I would struggle with the time required to learn and put it all together. And I am a computer geek with plenty of experience with Visio.
Very interested to hear how another "noob" is going. If it sounds good, I might reconsider the time investment.
The other upside is that it gives me a new skill with free software that millions of people are using for all sorts of stuff. hmmm…think I just talked myself into it, or at least one of the other voices in my head has!
.Chat soon,
emptyAn update for you folks still tuned in.
– the agent never came back to us with any ideas. Guess he didn't want to work for a living
– we received our deposit back in full, so only out of pocket for inspection and time.– We have just purchased a large block of land ~1200m2 about 150m from the bay/water. Flat, big, quiet (double cul-de-sac). ~30km from the CBD, so it is a little far out right now and my travel time will be a little nasty. A sacrifice I am willing to make for the investment and lifestyle.
– We decided to go for the biggest block of land we could afford, negotiate very hard and put a sound skeleton of a house on it, then grow into it over the next few years. Oh boy, do we have a lot to learn about landscaping!
– The area is up and coming and this decision is really a combination/balance of lifestyle and long-term capital growth
– Area is still lacking a bit in infrastructure but I can see the city creeping towards it in multiple directions. some very large estates less than 10 minutes away are boosting population, infrastructure and employment.
– You can never be certain with investments, but I think we have bought well for the long-term. I expect our growth may be static for a year or two, but after that things are looking up.
– Hoping to save enough cash to enable an investment property later this year. IF not, will wait a couple of years for some equity and savings to go again. This investment game is frustratingly slow in the beggining but I am certain it reaches a tipping point down the track and becomes self-sustaining. It is a kind of faith almost like religion, except with facts and people that can tell us what is on the other side.– Now we are searching for good home designs and trying to figure out all the "hidden costs" associated with building a new home. I will start a new forum item on that.
We know they saw the offers as it went back through the solicitors. Not optimal from a negotiation standpoint but clean and necessary.
The agent was actually annoyed that he was late (24 hours) in finding out what had happened. This wasn't intentional, just the fact that we were on the last day of the pool inspection clause of the contract and needed to ensure we were legally covered. It was also 2nd of Jan, so agents, solicitors and vendors were hard to get in contact with.
We are now looking closer at new house and land packages as an option. I guess it isn't often that the government throws up another 7k to entice. I pay enough bloody tax so I should at least seriously consider it. Now I get into the complexities of fixtures, fittings and the time taken to complete the program of works…….
Chapter 2 I will save for a new thread.
Thanks folks.Update –
Agent tells me I am missing out on an absolute bargain. This is to be expected. I told him that if it is such a bargain he won't have any trouble selling it to somebody else in a flash.So he asks me if I want to walk away. I told him that he and the vendor should at least try to come up with a creative solution to entice me. I mean, god forbid that an agent has to think for a living and earn his keep…..so far no solutions are offered which I find pretty lame. I would have thought that they would try some kind of counter-offer with me….but alas no negotiations to be had here.
So we are on the hunt for another property…….
Thanks again for all the advice, this has been a great learning curve.
Thanks again for the feedback.
Yes, making a decision was critical as we were out of time on the pool clause of the contract. No time to procrastinate.
We made the new offers and the vendor is considering over the weekend.
If they accept and everything is as cheap to do as you say, we may have negotiated a real bargain. In my profession I have witnessed too many projects going over budget and time estimates. It seems to be a common trait of human nature to underestimate time and effort. Thus I tend to be conservative with cost and effort estimated for all my projects.
Will keep you folks posted on where the saga goes.
$20k? Does that include ripping the old one out of the ground? Probably alot of jackhammer and disposal work to do. I would have thought 5k just to pull it out. 15k for a new pool sounds a little on the low side. But I don't really know all that much about it.
I don;t know any contractors, but I assume there should be a few on the shelf to pick from at the moment with the downturn. So rates and quality should be reasonably good.
We have our solicitor putting in the alternate offer as we speak. Don't know if we will hear back this afternoon or not. I don't think the vendor will have expected this so may be a little pressured. If I was them I would slow it all down to reconsider.
But if they take the low-ball offer, we are looking pretty good.
eldredni – ~Most were $400-$5000 for the building and pests that I found. I went with a reputable name company to be safe. There was another at around $620 but was more thorough.
The pool inspection (recommended to be done separately by the building and pest inpectors) was done by the local pool shop (reputable chain) for around $80.C2, thanks for the detailed response. Answers below;
1) Pool currently filled with water. Does have a history of blackspot. Pool guy says the water reading were off the scale so he couldn't get a number.
Concrete. We don't know yet if there is a structural problem. From the surface there is cracking to the pebblecrete put on the pool years ago. Essentially both the pool and building/pest guys said we need a pool builder to inspect the structure to advise if the cracking continues into the main structure. If it does, the underlying concrete and steel could be decaying and the expense to fix is rather high. Such as filling in the pool more as you mentioned. IT isn't a huge pool as it is and taking 10cm off wouldn't be acceptable for us.2) Thanks. We won't fill it in. Either the pool is ok or we walk away. We need to live in the house for a few years so the pool is a requirement.
3) The pump, filter and meter system are all on their last legs. IT cannot keep the pool in balance as it is struggling so hard. The unit hasn't got a weather cover so it has been hammered by the sun/heat and rain. No surprise it is dying. Pool guy reckons that there are about $1000-1500 of repairs to do in order for current system to get back to baseline. For $1700-2000 we can get a new system with a salt water conversion and a cover constructed. (I haven't got time for any handy work, my daytime job pays very well but it is extremely demanding on time)
4) Oh the fence. Hmmm. Essentially it is a hodgepodge of 3 different fences. 2 of which are commmon property fences with neighbours. None of which are legal height. Apparently they would get a large fine from the council if an inspection was done. I am not going to tell as it isn't my place, but it does suggest major fence work. I estimate it requires about 30-40 meters of fencing. Probably some concrete drilling work in places. We are thinking of paying for this ourselves and putting in a nice glass fencing system as it will fit in very nice with our landscaping plans.
Decking – estimate 10-15k to get current one removed and replaced with long-lasting wood. (current is a cheap pine that was always going to sag and rot early). The stairs also need removing and replacing. These are a crappy concrete and steel job that are falling apart. We would switch this to wood/steel.
to be honest, I think we could do it on the cheap, say 15k for all, if we had to by just doing the bare minimum. We have to live in this home for a few years so the bare minimum isn't really all that desirable. Probably better we spend more money on a house that meets our needs rather than skimping on the renno's.
Talking to solicitor today about where we stand and making new clauses for the offer. then we work out how to present it to the agent. I am thinking of not saying anything to the agent until we have a new offer document ready to go. Thoughts?
Thanks for the advice folks.
I have about and extra 80k available. Plan was to sit that in the redraw facility on the IO loan until be find 1 or 2 small investment properties in a couple of hot areas.
30k out of that hurts us a bit on the investment front.
I don't think I will fill in the pool. Would rather walk away. This is a hot climate (QLD) and pools do pose a good asset almost all year round. We will probably rent the property out in 3-5 years when I relocate overseas or interstate for work.
I think we will present them with options 1 and 2, but make the numbers a bit lower. Time to play hardball and see how keen they are to sell.
We are prepared to walk away. Although I think the fact that I have to foot the bill on inspections that fail is absolutely criminal. The government should at least make these tax deductible for 1st home buyers. I am lucky because I have saved for a long time and earn plenty of money, but the average first home owner cannot afford to do this on 2 or 3 homes. Thus the disadvantaged are more likely to be ripped off and buy a lemon. This is plain wrong and actually acts as a barrier to the free trade of homes.
Apology for digressing but I have discovered many things about the real estate industry over the past 18 months that make me extremely wary. Lots of dodgy agents, vendors and spruikers out there. Marginally better than the clairvoyant industry in my mind. No offence intended to those of you who are genuine, you know who you are.
I went to one of these a few months back and do question the value of them. In short, it felt more like a one-on-one seminar where I learn a tonne and got to ask every question I could think of.
In short I think the title is misleading. It most certainly was not a financial health check. A more accurate description would be, "One-on-one PIT seminar". But that kind of honey doesn't attract the bees I guess.
Is it worth it? Hmm, not sure. Sorry, but it all depends.To put it in context, here is some background on my situation and experience, I expect this may help you compare and contrast to make your own judgement;
We are new to property investing, have read alot and talked to lots of people and are just now taking the first (I think most important) steps.
Read all the Chan and Naylor Books, was very impressed and motivated by them.
Read Steve Mcknights books and was very impresed and motivated. But don't really have the time it seems to require at this point.
Read "Trust MAgic" by Dale Gatherum-Goss and thoght I was getting an insight into the inner-circle of wealth. This stuff is very impressive and has convinced me that although trusts can be complicated, they also provide significant benefits for the very wealthy. There is no reason why average folks shouldn't access the same benefits. I very highly recommend buying this if you are really curious about what can be achieved with trusts. It is a real eye-opener.
One, PAYG, high-income earner (200k+) with spouse and 1 dependent.
No debts to speak of (will settle on PPOR soon, so that changes a little now)
Clear 10 and 20 year financial goals and agreement with my spouse. Also very keen on setting up a wealth base we can pass on to our family in the distant future. This is the strongest motivator for me and will keep me going.
Really looking for the mechanics of how to get the foundations right now.Summary of key C&N healthcheck meeting I had;
thjink I paid $395, consider it a little on the rich side but I think I got most of the value extracted.
The accountant was a property investor, very experienced and did know what he was talking about with regards to property.
This is all about the PIT (Property Investment Trust) is their product to push. They take you through exactly how it compares and contrasts with other trust and investment structures.
I left with paperwork fille doubt ready to go for the PIT. So it is a strong "motivate to buy" kind of sell.
Accountant didn't really know about the more complex aspects of Trusts such as those described in "Trust Magic". In fact, I taught him a few things, enough for him to warrant investigating. This was disappointing to me as I expected them to have knowledge of this stuff and how it can be applied to the PIT. So a little confused.
Worked through some financial models of property price doubling, living on equity,
I asked lots of questions, I think this is the key. I went in prepared with about 30 questions. Most of which I got answers to. Don't leave until you get those answers!
I took along alot of my financial info thinking it would be examined for the "health check".None of it was even looked at and he didn't show any interest. This was a black mark against what I expected.
Overall, ok. Enough for me to probably go ahead with the PIT early in the new year with my first investment property.
How many PITs? This is largely aligned to the state you are investing, land tax thresholds and how they apply to Trusts. I need to check but, I think in QLD we try to squeeze in around $400K in land value into each PIT before starting the next.
The PIT fits extremely well with the very long-term plan I have in mind. The Trust never divests, even after the normal 80? years, so no CGT in 40 years when we clone out or transfer to descendents. And so forth. Keep in mind that I am thinking a family financial dynasty, this very long-term thinking is rare and probably not the same as you. For some reason it rings my bell.My advice to you is if you have the time;
Read the C&N Wealth Books.
Read Trust Magic
Then decide where to go next.
If you do go to C&N, make sure you put together that list of questions.
Consider going to some other seminar or property/investment accountant.Feel free to ask me any questions, I may be slow in responding as I am dealing with relatives…….long Christmas.
Emptyvessel
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