HB Well my biggest concern is how do you suppose that in your first scenario Mitchy comes up with 100k for plant and equipment???

Commercial loans require 25% deposit, for a premises… if you propose someone is eligible for a 100k business loan could you please tell me how to acquire such a loan as I have a lot of interested clients? (seriously, I’m not being condescending, you obviously have a knack for starting out with nothing)

Look, I’m not against going into business, I hope one day that I could be like you HB… at 23 I created my own company and took a big risk going into business for myself, with something I am passionate about. I’ve been successful, however for the first year and a half I had to work 2 other jobs to pay for the costs it takes to get clients, I am very PRO-entrepreneurist!! I doubt I work 38 hours a week these days and have a great income affording me what I want, but I am lucky. I had a very down to earth mother, and a father who encouraged my business acumen. I was also born with certain talents that were fostered, I have a degree under my belt, and am thankful for everything that has ever happened to me…

You see, I look at my friends and acquantinces, and I’ve seen their misguided efforts at starting their own business, they either have an ability they are trying to sell, or simply came up with a plan one night and started a business… I’ve seen them fail and go into debt. They had no business acumen, they didn’t have a degree in marketing or work experience in the field they went into. Bottom line is, they didn’t know how to make their business PROFIT. There is nothing wrong with the product, they just don’t know how to market themselves, or bother putting money into marketing themselves. I’m not surprised why so many business’s fail, you have to play it so safe, by getting the knowledge and always setting goals, you have to be somebody that NEVER gives up. But a lot of people YOUNG OR OLD just don’t get it, they want a quick buck or they want to do what they love regardless of whether it makes a profit.

That is why I have to agree with property investing. If you do a bit of research, it doesn’t take much to make a lot of money.. in the LONG run especially. Being a mortgage broker I know how much easier it is for everyone, but I have the full respect of the banks underlying ‘risk factors’ and understand in more detail why some investments or higher gearing is a risk.

I’m not saying anyone in this forum is right, or wrong, the knowledge adds value, but I’m deeply opposed to one right solution for everybody. I do however think PI’ing is a realistic way to get ahead, in most cases the bank will require you to have an adequate deposit OR prove genuine savings (the ability to make repayments) to cover their risk, which in turn covers your own backside.

It is true, only a few succeed at business, and only a few really succeed, and that comes down to possibly a combination of luck, but largely, business acumen, and let me tell you, some people will probably never have that, or are quite happy to be employees.

I guess for someone who went into business for themselves is offering a conservative opinion, but that is how I’ve run my business. I’ve never used much credit, and paid to establish myself from working 70+ hour weeks, and let me tell you, it was hard, but also rewarding.

The best advice I can give anybody starting out is to get the knowledge, don’t look for quick answers, investigate, READ, LEARN be OPEN to opportunities that take EFFORT but always push your boundaries and LEARN work HARD. If you go down any avenue with these principles in place, you will have a much much larger chance of success.

Liz

Mortgage Lender
1300 780 826

Gee HB – HARSH![angry2]

Ok you have a point, and let me start by saying to Mitchy that in my professional opinion, you are talking about extending your own home LVR to 95%, then buying another investment at 95%, most banks will get a little jumpy about this, unless you can show VERY good servicing ability (income/incomings) you are going to have trouble.

You are overextending yourself and unless you are both very secure in your jobs and budgeting and have a tonne of research I wouldn’t consider it. If you did, perhaps leave the equity in your home and opt for a 100% product, but only if you feel like the rental and capital growth are worth it.

However, there is a big lesson to be learned for a lot of young guns out there, …save save save!!!

HB, yes you have a valid point, but as someone from the X generation I would like to acknowledge that yes I do believe that it is taking these generations longer to grow up, but not ALL of them. However I do believe there are valid REASONS behind what is going on in our society?? Do you think these children were BORN with the notion that they could have everything now??

People in my age bracket are very conscious of the need to get into property to establish themselves securely, ie. mitchy, is obviously trying to set herself up for family, her long term security. If she did go into further debt would she not be working her bumb off to pay it off??? We’d hope so, or she’d learn a quick lesson like the other statistics you quote.

In the meantime, if your daughter wants everything now, perhaps you might ask yourself whether you really blame yourself, as a mother, for her misgivings, or society in general, for it’s consumer based engine driving this economy…??[eh] And probably a tonne of other factors….

Anyway I’ll get back to WORK because frankly, most people in my generation know that we work the LONGEST hours of any generation. The statistics are all there….

Liz

Mortgage Lender
1300 780 826

Yeah me too Stu…

Usually all of the ‘creating’ comes from the clients!

How do you propose to cover your own living costs + a mortgage if a bank only considers 75% of rental income?

I think what people are implying is you might need a larger deposit so that you qualify for a ‘lo doc’ product, meaning a self-declaration of an income… which you probably don’t have.

Liz

Mortgage Lender
1300 780 826

Yeah pretty standard stuff, take it out if you want to access it in the next year. Remember break costs are payable in fixed rates if you want to get out of them. It’s no surprise to us brokers the one year rate is lower then a 3 year, as fixed rates are indicative of what the longer term market will be doing.

Heritage building society offer extremely flexible fixed rates and have no rate locking fees. Their fixed rates go up tommorrow though…

Liz

Mortgage Lender
1300 780 826

Or alternatively if you do not want to declare an income you could try a NO doc option up to 65% lvr. You just need to have an ABN for at least a day…

Liz

Mortgage Lender
1300 780 826