Forum Replies Created
I paid for a report from home price guide and found it next to useless. I wouldn’t even waste my money.
Although I am starting to see changes in the market and am predicting that a lot of the offers I am now making will have higher success ratios.
Are you buying cheaper end properties eg 100K or dearer end 200K plus. I think I would find it very hard to accumulate 30 properties this year paying 80% of FMV especially when houses I am looking at are around the 200K + mark. I must admit I am finding it easier to get discounts on the cheaper properties. Don’t ask me why.
The best way to find out values is to hit the pavement. I no it is labour intensive but from a sheet of historical prices doen’t help. I bought historical data of home price guide and it was next to useless.
Sorry soosh I don’t see how the cash-flow can be better when you borrow at 80% LVR. At the end of the day you are still paying interest on your LOC which almost mirrors your mortgage. The only way to improve cash-flow would be to use cash for your deposit. Of course then your ROI suffers.
Believe me 90% is the way to go. I personally wouldn’t listen to what your accountant has to say on this matter.I just re-read my post and I must apologise for the spelling mistakes.
As far as I’m concerned soosh using a LOC is just like using cash. If you have a 200K LOC, how many houses can you buy using a 90% LVR compared to an 80% LVR (providing the house are positively geared). To me the answer as quite simple.
As far as using PL’s to fund the 20%. hmmm The figures I have worked out conclude that it is actually better off paying mortgage insurance then paying the higher interest rate.
Example.
Loan Term 25 years
House 200K
80% LVR = 160K @ 6.09%= $1039.70
40K deposit @ 10% IO = $ 333.33
TOTAL = $1373.034% extra interst paid on PL over 3 years = 1600×3
=$4800
You paying $4800 in extra interest while also killing your cash-flow.
O.K. your argument could be to refinance If (and I don’t like ifs) the property goes up in value.
I’ still rather just pay the mortgage insurance.
You can get this capatalised into the loan anyway @ 6.09%.Example Paying Mortgage Insurance
Loan Term 25 Years
House 200K
90% LVR = 180K + 2K MI Capitilised @ 6.09%= $1182
Deposit LOC 20K @ 6.09% IO = $ 101
TOTAL = $1283An extra $90 in the pocket each month.
To me the answer is simple soosh. Definetly borrow on 90% whether it be P&I or IO depend entirely on your strategy. If I could borrow 100% from the bank I would (I believe Henry Kaye has mastered this, although I don’t know whether his approach is entirely honest). The least money you have in the deal the better. Work out the ROI on 80% LVR and 90% LVR. Big, big, big difference.
The banks also tend to cut you off if you keep borrowing at high LVR’s, so that to is something that needs to be considered.
Paul, Steve can’t make you get out of bed in the morning. He only gives people the tools to take action. If you act on his information or not it is up to you. It is obvious you haven’t otherwise you wouldn’t be in here mouthing off.
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]elliot is a esotric mathematician. He believed that the stock market prices flowed like waves. I however believe is method is a form of prediction and for this reason don’t follow this methodology. To me the stock market is about probable events and not prediction. Anticipating or predicting someting leads to disappointment when some does not happen which was anticipated. I think this is why traders have such a hard time making money.
Spot on Louise you are up sh-t creek without a paddle. This is in direct voilation of the Trade Practises Act.
Steve I am curious as to where I get these forms from (are they in your buyer beware product)?? Do you draft them up yourself and if so are they legally binding??
Thanks AD it’s the only site where I can understand what they are talking about.
Thanks Steve I have order both buyer beware and property secrets revealed. Can’t wait to read them.
Thanks David
Any deals that require no money down would suffice. Equity in the property isn’t necessary but if you are willing to show me some deals where you have used equity in the property it would be much appreciated.
Dan does that mean that when banks say you cannot refinance within a year they really mean that if you want to refinance you’ll have to find your own valuer then bring the valuation into the bank. Thats what I can gather from your post.
Thanks David
Thanks guys!!
Just curious Steve as to who writes up the Lease and option contracts. Does a solicitor do this. What would be the cost?? In the example the lease is 5*5 years. Does the option apply for 5 years or 12 months in this example. If the tenant does not want to exercise his option after the 12 months and doen’t want to pay another option fee but would rather rent, are you legally allowed to terminate the lease and find a new tenant/buyer so you can receive another option premium??
P.S. I forgot to mention it before but the new site is very user friendly. Keep up the good work.
I don’t think its really prudent to make invest ment decisions based on buyers recieving FHOG. I don’t know your situation in great detail but with LO’s, the option could be to vendor finance. There are a lot of things you can do with LO’s especially if you are finding it hard to find buyers with substantial deposits on wrap transactions.
I don’t think Christmas would be helping you that much either. Just curious soosh but have you actually completed a successful wrap yet.
Thanks….Speak to you soon.
Besides the wrap you are having a problem with how many successful wraps have you done Soosh?? If you do decide to rent out the property will it be negative cash flow or +?? Do you look at cash flow when you are looking at wrap properties just in case you can’t find any buyers??
I suppose Christmas isn’t the best time to find potential buyers. If you do decide to tenant the property on a general tenancy agreement which usually operates for 6 months, (feel free to correct me if I’m wrong) will you then try to find wrapees based on a long term settlement??
Thanks in advance David.
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