Forum Replies Created
- Originally posted by Jaradnkaren:
what about a deposit?
When I buy residential I put down a $1000 deposit. What should I offer for a 1 mil + property?
I think the first thing you’re going to have to do is find out how much the bank is willing to lend you on the property. As far as i know, commercial property is leveraged alot less than residential (65-75%). Start there and work your way backwards.
Lumwood.
– “Life is what happens when your busy making other plans” –
IMO I wouldn’t worry about paying out your home load with capital gains. Instead, set up a line of credit on your IP and use the capital gains to purchase more CF+ve property. Then use a portion of your cashflow to pay off your PPoR mortgage.
– “Life is what happens when your busy making other plans” –
Sounds to me like your a bit of a novice. Which is ok, we all have to start somewhere. You are keen that is good, but do you have the dedication to stick it out? Right until you have reached your goal?
Its not just a case of buying property and renting it out, hey bingo million dollar portfolio. If you dont know what you’re doing you could quickly turn your 10k into -90k if your not careful.
Read, read, read and read some more. You can never stop building your wealth of information, especially in real estate. Once you have the knowledge you will understand where you have to go next.
You obviously have a goal in mind, but how are you going to get there? What are you waypoints to your goal? Your mini-goals to reach your mega-goal so to say?
As to the figures, once you have read enough you will begin to understand how the due dilligence process is run, this includes analysis of your investment figures. A purchase price and an approx weekly rental aren’t all you’ll need. My calculations produce a rough 3.5% CoCR. Is that good enough for you to reach your goal? What about the area it’s in? New Farm is good, and up market, but the area is also a bit derilict is some places. Growth rate/potential? Vacancy Rate? Potential for Capital Growth?
These are just some of the questions you need to ask yourself before you jump in head first. Make sure you can swim before you jump in the deep end. So fisrt things first. Make sure you know what your doing.
– “Life is what happens when your busy making other plans” –
The way I understand it is the FHOG can only be used for a PPOR and not for investment purposes. You have to live in the property for 12 months after the purchase date, and then on you can do what you like with the residence. (someone correct me if i’m wrong)
– “Life is what happens when your busy making other plans” –
Initially it would be hard to understand and it would take a little while for the idea that everything I have is gone for good. But eventually I would get back up on my feet.
1) Find out where i made the mistake and learn how i can avoid making the same mistake again.
2) Obtain a job where i can earn money to clear my name of bad debt and begin to put money aside for investments
3) Find the deals and away I go…When tax time comes around you can make deductions on all of your repayments with interest only. Rather than just the interest portion of PI. When financed with PI your principal decreases each year because you are paying off… dah! However, with interest only you dont pay anything off your interest, so the interest is always going to be calculated on the same principal, meaning you can make a tax deduction on the entire payment as opposed to only part with PI.
make sense? i’m not sure… basically IO is recommended for taxation purposes. It can increase the deductions you make and at the end of the financial year can sometimes turn a negatively geared property to a positive one.
Knowledge is power, and without the knowledge you can’t possibly hope to be successful at property investing. My suggestion to you is READ! Read everything and anything you can find on business/real estate/selling, Audio Tapes, Websites and Forums such as this one all add to the knowledge you must have before stepping out into the marketplace.
Once you have read a bit you will then begin to understand the steps you must take in order to reach your goals.
Begin with Robert Kiyosaki’s Rich Dad, Poor Dad. After you have finished that hopefully things become a bit more clear for you and a path may begin to form.
One thing you need to understand is that good property deals come around all the time. Looking for 30 mins is great. however, you may not be looking in the right place, or looking hard enough. The 30 second rule may be fine but deals are structured using your imagination not what “rule” says. Sure the 30 sec rule can find you awesome deals… But it is only one of many ways of finding great deals. Try playing with the numbers a bit more.
Dolf De Roos’ method of finding property is the 100-10-3-1 rule… You look at 100 properties, place offers on 10 (the most promising), more than likely you will have 3+- accepted and you chose the one to purchase. (That’s a basic run down, read his books to find out more.)
Maybe you haven’t looked at enough property yet. Sometimes you have to be looking for months upon months before you find deals. Main reason for this is, you need to become aquainted with, and gain a feel for what the value etc of property really is. You look for ages and then after months of looking and inspecting etc, you begin to understand why the 3brm house for sale at 210k is a better deal than the 4brm house 3 doors down for 190k.
I may not have explained it clearly enough, but basically don’t lose heart, keep looking and looking and looking. Great deals can be found anywhere, anytime, they just need to be found and that may take more than just abiding by one rule.
