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I suppose it shouldn't be too hard to create an excel template for the number crunching. Here's Microsoft's list of common examples of Excel formulas. This may be of help to you.
If you were considered more on the "self-employed" camp, then I think you would have to at least prove to lenders that you had about 2 years worth of consistent income. So I suppose you'd need to think hard about the consequences of moving from full-time work to being a contractor/consultant, as a more "self-employed" person.
Go for number 3. That's my personal opinion. It's the one with the least amount of hassle, and you still get to achieve your outcomes of getting more equity for deposits.
Although as you mentioned, seems like you'll be able to only tap into about $44K. There are bargain properties that you could buy with that amount for deposit money, but do you have any other cash for deposit money? How much were you planning to spend for your first IP – as in, what was the price range of your intended IPs?
What's the research for?
There was a lot of hype about Whyalla because of the potential of the Olympic Dams project. I was keeping my eye on alot of the properties around the area, as I saw a number of positive geared properties, which could potentially have high capital growth prospects too. Was seriously about to invest in a number of the properties there.
Now that the project's been delayed for so long, and now there's uncertainty about it, I've moved on at least for now.
I agree that 100% loans are already a thing of the past. I haven't seen them in Australia anyway in recent times, nor have used them. I've always had to save up for deposits or at least tap into equity to invest.
I don't know, has anyone ever seen 100% loans in Australia?
Thanks for the warning. I'm sure that other investors will be grateful too.
I spends lots of time in South East Asia as I love to travel, and have thought many times to start doing investments overseas. Although I have been warned of many of those shady agents and companies within Asia. That's why I still prefer to invest in Australia, and would only think of investing in Asia after NZ and USA.
I think that would depend very much on the terms of your contract. I think you could suggest certain types of maintenance for the buyer, but the title still remains with you.
The advantage of this is that the buyers are likely to maintain the place and keep it well because their increased sense of ownership, but you still have title so just in case they default on their payments and contract obligations, you can take the property back from them.
That's from what I know, but I think you'd need to talk to your lawyer about this carefully.
Where are you planning to buy land?
I've seen a number of investors doing that sort of thing you're talking about with transportable homes mainly in coastal areas and rural areas.
I agree that if your idea of a "solid investment" is a high yield, then you are better off looking elsewhere, as there are other properties with higher yields. Also, there are other properties with better cashflow potential too.
Although it really does depend on what yoru investment goals are?
Dubstep,
Yes, it's true that you would act somewhat like a bank, although there are some advantages for both you and the buyer if you did vendor finance.
For the buyer, if you did vendor finance then the buyer would not have to go through stringent loan application procedures that may rule them out from a conventional loan. Also, you could decide to let them buy the house from you for a very small deposit or you could even finance their deposit too.
For you, the advantage of vendor finance is that you could slightly raise the interest rate for the buyer, higher than the interest rates that banks are using, so that you actually can get some cashflow, but it also helps since you're taking on the risks.
Hey bugeye,
That's a good strategy to go for, and in the long term can and will make you wealthy if you continue and repeat the process again and again.
A good mortgage broker can help you with the loan process.
Have you started looking for properties already? Found any good ones that suit your goals so far?
I think a good way to figure out whether to move forward, and whether it's a good investment for you is to use an excel spreadsheet, and type out all the expenses and costs to develop the granny flat on one column and add them up.
Then look around at other granny flats renting out in your neighbourhood, or you could even ask a local property manager, and figure out what granny flats are renting for. Then I suppose you could figure out the potential yield you'd get. If the yield is worth it, then go for it. If not, then I'd suggest investing in something else.
For me personally, I like investing in properties that already have the granny flat included.
I missed the show, and I was trying to look it up on youtube or google, but I did come across Cherie's ACA story from 2010, which was in a more positive light. You can check it out here
I too was thinking of getting some her stuff before, as renos aren't my strength even though finding, researching and investing in properties is. I think she's been doing some seminar rounds lately.
Gday Steve,
I've been checking out properties around WA, and I have seen positive cashflow properties in Kambalda recently.
I suppose the economics of the area has its pros and cons. The pro being that you're more likely to find cheap properties that are positive cashflow, and would be in demand by the mining sector for a higher rental income. The con being that it is too dependent on the mines there.
In my personal opinion, I would only invest there if the returns are high enough for me to take on the risks. If yes, then I would go for it. If no, then I would move on. You'll have to determine what rewards you want to at least achieve. Also, you could also potentially suggest a lower price when negotiating due to those higher risks, which may make it a sweeter deal for you.
At the moment, I'm watching for positive cashflow properties all across Australia, but I'm particularly analysing properties in NSW, QLD and VIC right now
With regards to granny flats, it's important to adhere to the Council rules, as I know of people deciding not to follow them and some of them got caught. It also is just good for your peace of mind, even though it may cost you more in expenses for approval.
A quick way for your to get general advice for the Council rules is to just call up your local council and ask your questions. They should be helpful to you. Although if you want more specific services to go to your house and check your granny flat adherence, then there are paid services for that too, whcih you can find doing a google search.
From a personal perspective, I think 2 things that have made me successful (well in my own mind and according to my own standards, I am successful) are these:
1) I set goals,I write them down, and then I create plans to achieve them, then I work the plans. A great tip, is to also know why you want to achieve those goals – including the emotional reasons.
2) I have a mindset of continuous, never ending improvement. I always aim and strive to improve myself in the most important aspects of my life – business, relationships, money, fun, family, etc
Hi reandebris, hey jbrogz,hello avena, g'day orsonstarus, welcome carlescrowley and howdy kentotoole and a big hello to all the other newbies to propertyinvesting.com
It's so nice to meet you all. Continue to share your storeis and ask your questions, and our community will be happy to help you on your property investing journey.
Hey Crows,
You mentioned that you had the problem of finding positive cashflow properties but many of them were in areas that had no real CG prospects and were known to be troubled areas, and you were confused about what to do.
I agree that there are some CF+ properties that are located in those kinds of areas. In my opinion, what I do is that I look at the potential cash-on-cash returns, and if the returns are so high and the monthly positive cashflow is so high, I tend to favor that potential cashflow over the risk., because I could then potentially use that cashflow to manufacture increased capital growth for the property, as well as to pay for any potential repairs/insurance for any issues being in a troubled area. I suppose you need to figure out what's your risk profile and how much you're willing to have in returns to make you feel confident to take the certain risks.
If you find that a property is too risky given the rewards, then just move on and look for another positive cashflow property that is worthwhile.
