These days you don't need a full time job to get finance.

No Docs and Lo Docs side-step that hurdle, but you need to always be looking at your financial position to make sure you can safely handle any debt you take on.

Even with Lo and No docs, you will still need some sort of deposits, so now is the time to get cracking; get rid of all the consumer debt –  credit cards, cars Harvey Norman furniture packs and so on, and get some cash together asap.

$200k is a good starting price point for your first one.

Now that you have the budget sorted, you need to talk to one of the excellent MB's here on the site and get the finances sorted as to what your options are.

They can do a much better deal than you can.

If you keep buying neg geared properties each time, then yes, your out of pocket expenses keep increasing. The trick is to buy, or create properties that cost nothing to hold, and even return you a profit in cashflow. So, you either have to look for pos geared properties (hard to find now) or pos cashflow after tax properties (much easier to find).

When you run your numbers for each purchase, part of it will be the loan, or debt on the property, but there is also rent and tax deductions and maybe depreciation to offset the loan debt.

So even though there is more debt, there is also more income. It's all relevant, and as you accumulate more properties, the numbers and percentages are the same, just with more zeros on the end.

Also, the increasing number of properties gives you more exposure to the rising values. If you have 5 properties worth $250k each, and they go up in value by 5% per year, then that's $62,500 per year.

That's more than most people earn in a year, and you've done nothing to get it. Even if each property cost you $50 per week out of pocket (which would be a strain for most people to carry), after each year you have spent  $13k to earn $62,500. Still a decent return for your money spent, and it's not taxed unless you sell.

Obviously you can't spend this wealth that's been created until you've either sold some of the properties, or are living off the increasing equity (L.O.E).

Once your properties' values have increased enough, you can either sell some of them and pay out the debts, keeping some which are debt free, with a pos cashflow for life. Or, you can tap the equity (L.O.E) and spend some of it for living. This is actually a loan, but the idea is to only use that amount that will be less than the properties are increasing in value each year.

For example; your five $250k properties double in value after 10 years. They are now worth $2.5 mill. You still owe $1.25 mill.

If they continue to increase in value by 5% per year, then you are making $125k per year. If you use L.O.E of say $50k to live off, you still increase your nett worth by $75k, less the interest on the $50k L.O.E. ($4,000). So your nett worth increase would be $71k.

L.O.E is also tax free, as it is a loan – not income. You would only do it if you had considerable equity in your properties, and you are disciplined in your spending.

Blogs,

you still didn't answer my question, and it's fairly straight forward;

Are you up or down for the last 12 months with your SHARES, and what percentage?

Blogs,

So, overall for the last 12 months until today, are you up or down with the shares, and how much percentage?

Forget the "Investment Firms".

They are expensive, and won't necessarily help you achieve your goals; despite what they promise.

You will learn more than enough info FOR FREE both here on Steve's forum, and over at Jan Somer's Somersoft Forum.

As well as that, read lots of books; Jan Somers, Steve's, Margaret Lomas, Noel Whittaker to name a few.

If you got a refund then you didn't get ripped off.

You got a free seminar.

What the papers may not have mentioned is that there are probably 35 repossessions normally. Slight increase, but it's newsworthy and sells papers and gets ratings.

They make it sound like the sky is falling in.

The same thing is happening here, and while there are repossessions in the tens of thousands lately, the actual percentage of homes going through this process is something like 2% over the whole country.

Mind you; the news will be good for the cashed up as there will be some bargains turning up here and there.

Not all repossessions end up with a fire-sale price either; the owner is losing their house, but that doesn't mean there are no other buyers around.

Banks sell the property on the open market, and in a booming market the house gets normal price. I've seen it numerous times; go the the mortgagee auction hoping for a good deal, and the bloody thing goes for market value.

Of course, in a flat market, the houses will sell cheaper, but then nearly all houses sell cheaper in a flat market when the buyers disappear.

A buyers agent is the price you pay for your lack of time (or commitment).

I don't believe that they will necessarily find you a better deal than you could find yourself either. They just do all the legwork for you in most cases.

The fees are around $5k or more per property. Some charge a flat fee, some a percentage.

The thing you need to ask yourself is; if you spent one full 40 hour week doing nothing but sourcing a property; or even two full 40 hour weeks; would your time be worth $5k or more?

I've never earned $2,500 per week ever, so for me it's a no-brainer. For someone on $150k or more per year, it may be cheaper for them to stay at work and farm out the search to the BA.

I MAKE the time and do it myself and save the $5k.

You can do most of your research at night or in the dead times via internet to learn values of an area etc, then, allocate a weekend or 3 to go and study that area to get the feel of where the best locations are.

If 40 hours of sacrifice netts you a $150k property that will in all likelihood double in value in the next 10 years (hopefully less), then it is worth it.

Others will say; well; out of a $150k cap growth, I only spent $5k for a BA, so it's worth it to me to spend the $5k.

Generally, this is what I have observed to be the case from my experience.

We bought a property right at the end of the boom in Melb in 2003. We didn't care that the market was about to slow down; it was when we could afford to buy. But even after that, when the papers, tv  and radio were saying there was a slump and prices were dropping, the property still had growth; just not great growth.

We will always here the stories of people doing their nuts on a property deal. It's the same as those stories on ACA about the horror renters who trash the properties.

It's a small percentage, and is usually a case of the investor not doing the correct research about the purchase.

Anyone can rush out and buy a property in a boom, and many people do, without doing solid research first. They pay too much, buy at the wrong time, their LVR's are dangerously high etc. This is when the disasters occur.

If you are a serious investor and have knowledge about how to research an area for factors that will ensure a long term cap growth, rent demand, amenities, position, your buying price, ability to add value, how you finance your deals, then it isn't hard to buy a property that will pretty much always be in demand, and therefore will always have a good value.

If you study the richest people in the world, you will see that they continue to accumulate growth and income producing assets. They buy far more than they ever sell.

With the gearing aspect; it is possible to buy positive cashflow after tax properties, that cost you nothing to hold, and go up in value steadily. The rents also go up, so the cashflow becomes positive very quickly.

I have the mindset of never sell Blogs.

The selling and purchasing costs, plus the cap gains tax will swallow a lot of the profit from the sales, as you need to re-invest the funds as soon as you have made the sale of the last asset.

That's not to say that I never will sell, but I believe that there is more money to be made by holding the properties, even when the market is flat, and accessing the equity to do more things.

For example, if I continue to buy a property every 2 years, and only buy in areas that are about to boom, or just starting, then after 10 years I have 5 properties, all bought in a boom, so will perform above the average for a good time.

Say they grow in value by 7% per year (which is about the historical average), then I have 5 properties doing that, and along the way I access some of the growing equity to maybe buy a business, or buy some shares, and of course; more properties.

Now, I have compounded the returns on the properties I own, even if they are not doing much for a time.

Don't forget; the rents are always going up along the way, and there will also be tax benefits and depreciation. The whole thing is like a tree growing upwards and outwards; it's exponential.

So, it's not just a simple case of selling to take a profit and re-investing the funds. I agree that in the short term selling will improve the cashflow, as you have more cash to offset the loans, but you are eroding away the cap growth that has been built up through the transaction costs and  cap gains tax.

My plan is to keep on accumulating (without selling) my whole life, and to be able to amass enough wealth and have a low enough LVR to be able to live off the equity. LVR currently is 58%, which is a good number to do it, but the asset value needs to grow a bit more.

On retirement, sell off enough of the assets to pay out any debt, and live in comfortable retirement on a good passive income.

In respect to selling; one of my strategies is to do smaller subdivisions whereby there are say 3-5 townhouses or units built. Maybe 3 or 4 are sold off, the loans are paid out and I am left with one or two units in the complex that are totally debt free and positively geared with massive tax benefits and deprecation. This would be a sell scenario for me, and would be repeated.