I am very fortunate to have a CF+ house in Quinns rocks but i was lucky as i bought it in 2002 with the FHOG and now owe $90K with $310K Equity

I need to find my own apartment to live in as i am living at my parents place It's the cheapest rent you'll ever find, but as you know; it comes at a high emotional cost. Of course; we love our parents dearly (just can't live with them).

Does anyone know where to find a 1 or 2 bdrm CF+ apartments in Perth?
If it is to be your PPoR, why do you need to find a cfp unit?
 
I have read from this forum that the real estate internet boards and newspapers and even buyers agents are not the best way to go if one has time on their hands to do it themselves. These are the main tools to use for finding properties. If you have more time, then you can door-knock and ask people if they want to sell. Buyer's agents are good for time-challenged folk, but you pay a fair bit for the service, and I think their fee wipes out a lot of the cfp possibility. 

I have taken interest in reading that i should drive around the preferred areas i wish to live in and contact the real estate agents for their listing or look for private sale signs? Most apartments i have interest in sell for about $250K which is out of my range. The ones you are interested in are $250k, but what about any other units that are in your price range? If not, we can't help you a whole lot.

I have also read "Rich Dad Poor dad" book and it says to make lowball offers.  Does the real estate agent have to take this to the seller legally? How do i know if they have presented my offer to the seller? Do i need to fill out an R/E agents offer form? 
Low balling can sometimes work. Agents are required by law to present all offers, but you need to be realistic about what the Vendors might accept. The worst answer you'll get with a low-ball offer is 'no', so nothing to lose. If there is any positive response to your offer you can then fill out the Contract of Sale form. 
 
I figure i can only afford to borrow $180K. ANZ LOC $50K (plus expenses) and Liberty $150? I am self employed with low income.If you can only borrow $180k, and the cheapest place is $250k, we may be wasting everyone's time until you can save some more money and/or decrease the loan on your PPoR and/or make a low-ball offer that is accepted.

Does anyone out there have creative ideas they have used in the past besides finding places to renovate or buying in regional areas. I am looking for areas within 30K radius from the city NOR in Perth.You may need to move into your current I.P and make it your PPoR, then you may be able to use the equity in it to purchase another I.P. Your current loan balance is not overly high, so it won't be a massive burden if it is not tax deductible.You may even be better to re-finance that loan over a new 25 year term to make the repayments way less. The new I.P will have a new tax deductible loan, and the rental income is considered by the Banks towards your loan servicability.

The house market is falling here as the Australian Property magazine says but what about apartments? I have read many American books such as Robert Kiyosaki, Donald Trump and even Australian Steve McKnight plus others but seem confused due to the fact that the market has changed a lot as i write August 2007. Do your own research on the Perth market and watch what is going on. The books you mention will be a bit general in nature, and if you are going to be a serious investor this will be something you need to become proficient at anyway.

I have heard that auctions are a good way to find foreclosed properties. I have not as yet seen any apartments at auction in Perth? Bit of a myth in my opinion. I've been to a few, and everybody goes mad and bids it up to near market value in the end. I know in the USA there is money to be made in foreclosures, but their system is different to Aus and more involved.

Sorry for the many questions but i am at preapproval stage for a LOC with ANZ for $100K and it will be just sitting there until i can figure out what to do with it. I have asked for a sub account to seperate personal and investment but i am told it is an extra $150 p.a. Total annual fees is $300 for the ANZ LOC  

Would really like to get the ball rolling to see how investors have used their creativity to invest in more CF+ properties without being high income earners if this is possible? In this current climate it's hard to find cfp in cap cities. The best way to get the numbers close is to buy properties with good 'on-paper' deductions such as depreciation, and/or the ability to add some value somehow to increase the rent return and the cap growth. The property needs to be built after 1987 to maximise this, or have had a recent renovation that you can use for depreciation. You also need a pretty good rental return as well; something at least the same as the current loan interest percentage. If it's around 5% return you are wasting your time.
 

Thanks a lot

I got 454, but there was no provision for the rental income, or did I miss it, and our PPoR is now also an I.P, so how does that work?

$600 for both my wife and I and the I.P's.

Why would you offer them a reference after that treatment?

Option 1 could be the go;

1. Purchasing a place (unit/townhouse most likely due to cost) as close to the city as possible as a PPoR and qualify for the first HBG. Fulfill the requirements there and then move back out to rent and have it as an IP to reap the rewards – hopefully. In turn, wait for the equity to build with the better CG that can be ideally expected closer to the city and start the IP portfolio that way.

This way, you get the F.H.O.G, and can then move out later on to convert the PPoR into an I.P and keep renting. And you can move back in at any point as your PPoR. If you move back in before 6 years has elapsed as an I.P, you are not liable for cap gains tax if you decide to sell.

There are numerous tax deductions associated with an I.P, but keep in mind you will probably be more neg geared if you are buying nearer the CBD.

The downside is you need to move in, stay for a short time to fulfill F.H.O.G obligations, then move out again so you can convert it to the rental.

Don't assume that buying nearer the CBD is an automatic cap growth train. Do some in-depth due diligence to select the right area and property. Many outer suburbs have out-performed the CBD in recent months.

As for the rest ;
-Fed Election; Just hope Johnny gets back in. Kev will give more handouts to the needy, they'll just spend it, the interest rates will have to go up to stop them. If in doubt; lock in the rate, but the flexibility may suffer.
– Stock market; who knows. It's up and down every day right now. The housing market over here is still going backwards according to the reports, sub-prime companies still struggling. If there are lots of packaged investments (mutual funds, property trusts etc) tied up in the housing market then they could be in for a bad year. Super funds may take a hit.
-Intertest rate rises; more to come I believe unless the consumers put the credit cards away (good luck).
-America's recession; despite what the Congress says, this country is already in a recession. Actually; the country is broken. The productivity is up, but all the cash is going to the CEO's and the wealthy 1 percent, with many middle-management jobs being exported to places like India, so unemployment is up. Healthcare, education, social security, all have terminal heamhorrages; 45 million people without private health insurance (that they know of). Housing and finance industry is in a tail-spin. Real wages haven't kept up with inflation for about 20 years. Middle-class has disappeared, homelessness, bankruptcy –  all on the increase; mainly due to medical bills, but the housing woes will add to the new records being broken. How will this affect Aus? I think the weakening US economy and dollar will strengthen ours, improve overseas investment and keep our economy rolling along.
– Should you purchase property now or wait; buy as soon as you can afford it, but study the market and buy well. There have been many monumental world and local events that have rocked the economies, but the well selected areas and properties keep on increasing in value.

Be very careful of this type of loan. This is one of the main culprits in the recent implosion of the sub-prime lending industry in the USA.

Basically, you are paying half the interest now, the rest is tacked onto the end of your loan. After a certain period (a couple of years or so) the loan reverts to the normal repayment amounts.

The strategy with this type of loan is that the property will have gone up in value over this period to cover the extra interest that has 'capitalised' on the loan, so your LVR is still at an acceptable level, and you have cheaper repayments at the start to help with the cashflow.

But the problem quite often is this; in 3 years time the borrower's financial situation has not improved, and they can't afford the new real repayments. They have to sell.

On top of this, the property hasn't gone up much in value (no-one can predict this either), and the capitalised interest on the loan means the loan is now higher than the property is worth. The borrower now has to sell at a loss.

The Banks and the Mortgage Brokers don't care because they make money out of loan churning and the trailing commissions on the loan.

In my opinion, unless you have an absolutely 100% positive feeling that the property will go up in value more than the capitalised interest (will the M.B or the Bank give you a guarantee in writing?) then don't do it.

If you need to use this type of loan; you probably can't afford the property.

Sorry to tell you, but they don't have 2 properties tieing up over $800k like you've done. I'm guessing you are heavily neg geared with these 2 properties as well?

When you here the stories of people buying multiple properties in 10 mins, they are usually buying cashflow pos properties that are cheap and in regional/rural areas.
They do quick renos and get them revalued, then use the increasing equity to buy again.
Thios is all done in a booming market as well.
Not to say that it can't be done right now, but it certainly is harder now than when those stories were written.

Have you had Depreciation Schedules prepared for you properties yet? I'm assuming by the values of them that them are fairly new?, thus the 'on-paper' deductions may be substantial and improve your cashflow through better tax returns. The increased cashflow is poured straight back into the loans; this will help to accelerate your debt reduction and increase your equity faster.

Other than this, I guess it's a matter of being patient and waiting for values and rents to rise, or try to find a pos cashflow property to offset the neg cashflow of the other two.

$500k+ for a 3 bed UNIT?
In a 200 unit complex?
AND for you first PPoR?
And there is ANOTHER complex across the road?

you are a lot more brave than me.

millions wrote:

Perth people aren't crying – most started investing in Bris,Melb Adelaide in the past 12 months.   We're all still smiling.

So what have you been buying;
houses?, units?, subdivs? – neg geared, pos geared?
What has happened to those investments in 12 months and what was your plan when you bought them?
If they are neg geared, has the cap growth kept pace or outpaced the shortfall?

Have you done comparisons of recent sales of new and used similar properties in the immediate area to estimate their value?

New complexes are often price loaded to cover developers' profit. Try to find out if there are a lot of these types of developments on the go – this could mean a possible over-supply in the near future and impact on your cap growth, or resale price if you ever need to sell, rent return etc.

You may do better with a newer, but used apartment (still have good on-paper deductions) which has already had a re-sale. These are more accurate in terms of market value.

Do some research on the rent returns for that type of unit, the rent demand, and check out the unit size – smaller than 50 m/s are hard to get finance for.

Also look at the demographic trends; is the population increasing/decreasing, are there projects in progress or planned (in local council) for improvemets such as better roads, public transport, new shopping malls, take-away joints, schools, hospitals.
These sorts of things signal increasing population.

The "Cairns One" development; how many units are there? Keep in mind that many units in an apartment complex may mean lots of competition for tenants from other investors who buy in there. Go for more boutique, unique and smaller complexes with 20 units or less.

Also look at the comparable cost of a house and land with subdivision potential in the future. It may be better to spend a bit more money and go this path, and you can add a lot more value to the investment than you can with a new unit/apartment.