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  • Profile photo of larrytheinvestorlarrytheinvestor
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    May 2, 2011 - 5:42 am

    Hey

    I was just wondering do the banks actually lend you so much money.. for example:

    I buy house number 1 with a loan of $170K and its neutral geared. Will the banks actually lend me more money to buy another house even thought i already have $170k dept? Is there not a limit that they will lend to a single individual on a 50K p/a income?

    For house number five they will be lending to someone with over $500K of dept.. and a 50k income?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 29, 2011 - 8:14 am

    How much would you have in your bank if you liquidated all your IP’s and paid off all the loans Nathan? (if you dont mind me asking)

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 29, 2011 - 5:13 am
    Nathan Birch wrote:
    Sorry I meant 34 buy n holds at 25. Damn iphone.

    Hey Nathan, how many do you still have loans for?

    Say you fixed an interest only loan for 7 years, what happens when you finish the 7 years.. do you have to pay the loan back?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 29, 2011 - 4:05 am

    Would it not have been better to keep the house, re-finance and then draw on the equity and use it to buy another IP?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 29, 2011 - 1:29 am

    Can you pre-pay a variable interest only loan?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 28, 2011 - 11:15 am

    [“PROFIT: $30,768*
    *Before tax”]

    How much will you pay in CGT?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 27, 2011 - 6:55 am

    What tools/methods do you use to research a suburb?
    The things I came off the top of my head were: walking around the area, checking public transport, shops, entertainment and avaliability of jobs, checking upcoming developments, checking zoning on the area you want to invest in… medium house prices, medium rents..
    Have I missed anything?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 27, 2011 - 2:58 am

    Thanks Angel.

    How much does a quality property manager charge for their services? I assume you only need one when you have developed a large portfolio of houses (10+ maybe?).

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 26, 2011 - 8:54 am

    I’m in QLD :(

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 26, 2011 - 5:45 am

    Do you think nathans method is the ‘best’ method to use Angel?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 26, 2011 - 4:41 am

    How does this work: The newer the property the better the depreciation benefits for tax minimisation benefits?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 26, 2011 - 2:42 am

    If I buy a house fo $200 k, renovate it and then sell it for $250k that means I will be paying ~ 25k in CGT however if i used the 50K profit as a downpayment on another house does that mean I pay no tax on it?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 25, 2011 - 1:49 am

    thanks angel, i had a think about it and worked it out however your example is really useful, thanks

    However at the end of the day I would have 10 homeloans and 10 properties. However it says that the houses will double from 200K to 400K… would they really go up by such a large amount?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 25, 2011 - 12:28 am

    *edited* * *: i just worked it out by myself.

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 24, 2011 - 6:03 am

    Also wanted to check whether this is correct: (i found it on this forum)

    For IP always use IO never P/I.

    Is this good advice?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 24, 2011 - 5:23 am

    thanks.

    Equity is your assets – dept right? So if i have a house that is worth $400 000 and I have paid off $200 000 of the loan that means I have $200 000 in equity. So then I can borrow this money and add it back to the original loan right? So i would then have a $400 000 loan to repay but i would have $200 000 in cash that I could use to invest. Sort of like liquidating an asset?

    However if i get a interest only loan that means that I will never be paying off the actual loan, only the interest. So that is why banks have a lower interest rate for interest only loans and a higher one for a normal loan?

    So that is equity..

    CAN YOU PLEASE TELL ME IF I AM ON THE RIGHT TRACK HERE?

    If i have bought a house for $200 000
    I have a down payment of $30 000
    (that means i have an instant equity of 30 000)

    I renovate it for a cost of $10 000 and reevaluate it and it comes to $240 000
    So that means I now have an equity of $70 000 and a loan of $170 000

    So if the property is CF+ or CF= then the monthly repayments of the $170 000 loan are covered.
    So i take the $70 000 and use it as a down payment on a new property, using my income to cover the interest that I pay on the equity loan. I then get a new home loan and use it to pay for a new property.

    Then i repeat?

    However using this method I will end up with tons of loans and if I lose a tenant then I am basically stuffed :(
    So it would be better to sell the house to get rid of the first loan and then buy the second house…

    ?

    Profile photo of larrytheinvestorlarrytheinvestor
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    April 22, 2011 - 7:34 am

    Do you also buy properties all over australia or do you stick to one area? How would you manage tenents if you live in another state?
    How do you obtain finance for a property? Do you go for a interest only loan?
    How does equity work (from what i understand it works similar to this  (please correcct me if I am wrong) : Buy a house for $200 000 right, so you get a 95% loan and put 5% down in cash. So then you can 'borrow' equity and take $200 000 from the house and get another loan to buy another house? is that how it works.. ?

    Profile photo of larrytheinvestorlarrytheinvestor
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    January 11, 2011 - 5:57 am

    Hey thanks for the replies.

    Can i get a real life example of the sort of price-range you work in, amount you spend on renovations how much rent is, how much the loan costs you, how much you sell for?
    Sort of along the lines of: buy property for $300 000, rent for $_ _ _, renovations cost $_ _ _, rent after renovations $_ _ _, sold for $_ _ _, loan repayments: $_ _ _?
    Average amounts are fine.

    Also do you do this in your spare time or as a full time job/career?

    Thank you so much,
    Cheers
    -Larry

    Profile photo of larrytheinvestorlarrytheinvestor
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    January 9, 2011 - 4:13 am

    Can i ask what sort of properties do you go for? Do you aim to purchase cashflow positive properties or do you aim to renovate the property to make it cahsflow positive or do you just aim to fix it up and sell it for profit using rent to lessen the amount you have to pay on the loan?

    Profile photo of larrytheinvestorlarrytheinvestor
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    January 8, 2011 - 10:32 am

    thanks, so there are rental properties that would produce positive cashflow (ie pay for themselves) ??
    are they hard to find? Why would the tenant not just take a loan out on the house if the amount of rent will cover the loan???

    Sorry about the newbie questions but im new to this.

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