Hi, you might be alright borrowing off the end value of the devt. I reckon 10×1 might cost 1.5-2M to build? and you might end up with 8-10 apts with end value 3-5MOnce DA is approved, the banks will provide funding. I borrowed close to 1M for building and the bank released it as and when the builders asked for payment.Always borrow more than you…[Read more]

Hi navyboy, that was what I thought to do with my last subdivision. As it turned out, I never lived in it but sold it and paid CGT which I then used other means to offset.Made quite a handsome profit even without building and the person who bought it from me will make a substantial profit after building as well.Quite a few small investors do this…[Read more]

Hi Beth, I can endorse the invest in recession strategy. Have done that several times over.Old enough to live through 18% interest, last year I paid 10.79% [total monthly interest close to $10K at one stage]Borrowed $170000 more in February @9.5%, ivested $10000 on shares & made $2700. Too chicken to spend the other $160KLooking to borrow $440000…[Read more]

Hi, buy 2 BR. $220000 + costs = $233000 less $67000 = $166000 @ honeymoon rates yr 1 = $10 – 11 K living costs = less than rentRent out 1 BR if necessary say to a mate @ mate's rate of $80 pw = $4160 [let's say you get approx $3K]If your job is stable, pay $20 pw into the offset/savings/loan acctAfter 1st year's sustained 'hardship', next few…[Read more]

Hi, can't you sell PPOR and move into the new house? After 5 years, you don't have to pay GST nor CGT. Can be quite substantial because GST is at least $13000. Your old house will not have GST.Meanwhile, you have time to look around and pick the house of your dreams and probably pay less than normal because you're not pushed by time…[Read more]

Hi, have you read Rick Otton's article about Aussies buying property in USA?It's scary.KY

Hi Vicky, yep. kumylau@yahoo.com

Hi Vicky would you be interested to give me an update of resi property in NZ? I have 5 student accom units that have now stabilised & returning $1000 pm +ve cashflow.Thinking of getting a couple more properties [resi easier though my preference is commercial except that funding is difficult]My loans are with Westpac.KYBTW I'll be happy to use a…[Read more]

Hi, I am sincerely puzzled.Why can't I borrow $500000 and buy a house & place it in SMSF if I have the equity?Say I have an unencumbered property, a house. I can get a bank to lend me $500000 which is the upper limit of what I can place in SMSF.I place the funds in the SMSF  as cash.Then the SMSF buys a house to the tune of $495000. It rents for…[Read more]

Hi, great place to learn is to attend open inspections & auctions. Doesn't cost much unless you put your hand up.For years I did that, walking from bus to train to open inspection. See, it gave me time to take in the feel of the place, the looks on the faces of people there, the vibes and ebbs & flows.Very soon, something will say 'this looks…[Read more]

Hi, I sold and was totally debt free. Didn't work. Been kicking myself ever since.But I bought a book by George Allen [American] and found that what I did was uncannily similar to his graph so I suspect that a number of other people might have done the same.It appears that people on retirement cash out and then just live on whatever income is…[Read more]

Hi, sounds quite simple. You've done really well with IP 1. Don't need to do anything – yet. Appears to me you're suffering the uncertainty after doing something. Have you looked into depreciation benefits? Throw in whitegoods & furniture & increased rental or even same rental with depreciation & -ve gearing will bring IP2 to a better position.…[Read more]

Hi, Elliequinn, I'd like to say that you're doing OK. Getting back on your feet & knowing you need to put together a deposit to start again is not bad. And to give some balance to Unmester's comments, property is SO NOT DEPRECIATING.Unmester, if your properties have depreciated, then you must have bought badly.My properties certainly have not…[Read more]

Hi, simple enough really. Save up more borrow less. Or if you think the timing is right when you have 20% deposit, at least make sure that your income is more than sufficient for you to pay down the loan i.e. pay P&I rather than IO that way you make inroads into the debt.Fear is good in that it gives the check & balance to the deal.It's also…[Read more]

mrs p, you might be interested in this. This afternoon I walked my niece through her options. Sell as is – make $200000; subdivide & sell after building; subdivide, build & live in one as PPOR; keep for rental.Even I was surprised that she'd come through with -ve gearing [around $2to 4 thousand a year] but with depreciation & -ve gearing, she is…[Read more]

Hi Harb, no matter what logic you use, Scamp will cling to his 50% drop. Your point about the cost of materials is the most telling. Add to that 10% GST and we can see why the basic cost base of a house cannot fall below a certain level and that level is double or more what it was 10 years ago.Further, add stuff like there's only one Doublebay,…[Read more]

Hi again, got confused between freelance and barnsee. The last part of my post refers to barnsee's plan to buy PPOR & renovate. And since you already own an IP, you'll be aware of the $ and cents.KY

Hi freelance, are you sure Richard meant rush in to set up a trust or NOT rush in to set up a trust? Can Richard reconfirm? It reads like a typo to me.The cost of setting up a trust may be not much, mine was $1600 but thereafter, administering the trust means accounting / audit fees etc. You need to ensure that any tax advantages are more than…[Read more]

Hi, wish there were easy answers. Noted in your other post, there are a couple of idiotic rantings of 30% falls. The fact is in Adelaide, prices have not fallen. Vendors are not lowering their asking price as yet. A property I sold in April with DA is now on the market @ $360-380000. When I did the sub-division, my end value for the new house was…[Read more]

Hi, one of the problems is that you don't have cash upfront. It's important because without a cash injection, the commitment isn't there.A sensible thing to do is to get an existing property in your cousin's name & sub-divide it and the other portion in your name.I saw one property for sale in Braybrook DA already done. Your cousin can buy this &…[Read more]