Forum Replies Created
landlord to be, I think halving and then adding a couple of zeros actually fits in with our ‘maths’ brains better. You’re right, it’s exactly the same, but try to multiply 123 * 500 without a calculator!
Cheers
MelPhil
I suggest you do a bit of reading of the posts over the last few weeks. Bill is adamant that we are at the end of the ‘6 year bull market’, and that prices will drop by up to 30% – I think. Instead of giving you his ‘message’ I do suggest you read recent posts.
Or email him, he’s a really helpful guy, and he is happy to help anybody out. He’s extremely experienced (ex Real Estate Agency owner), and he leaves his email in every post.
Cheers
MelIf your value is $220K, the bank will lend you 80% of that, which is $176K.
So if you make the whole loan a LOC, the ‘limit’ will be $176K, and you will ‘owe’ $114K (plus the costs to set it up). You don’t physically take the money, and then pay it back. It’s just like an increase on the limit of your credit card. It’s just there!
The second you spend any of the money, they will charge you interest, so yes, your payments will increase. There is no time limit on spending the money though.
So at present I am getting all my properties revalued, pulling out the equity and having one LOC which has a high ‘limit’ but vey little ‘owing’, so when it comes time to buy some more, I am effectively ‘cashed up’.
Cheers
Melsis
there have been a couple of posts on this topic. One ‘ballpark’ figure, and I think one of the Josh’s posted one that he learnt in a finance class. Sorry I can’t remember when/where, but they have been in the last month if you want to do a search for them.
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MelRiffraff I think you’ll find that crashy was in strife for advertising his course for sale – completely different.
I think most of us picked up that yours was not at all ‘hypothetical’, and hence caused us to answer.
A LOC is like a personal overdraft – or a really big credit card. You have a limit, and if you spend the money, you pay the interest. If you don’t spend the money, there is no interest. It can have a cheque book, ATM card, internet banking etc. linked to it, and you would (for a PPOR loan anyway) park all your income and savings there until you needed to spend any money.
A redraw facility is usually part of a P&I loan, and when you have made ‘extra’ (that is over and above what you have to for the loan term) payments, the bank will let you ‘redraw’, usually there is a minimum amount, and could cost $50 per time.
With a LOC, there is no minimum, and is far more flexible. But it’s a trap for small players who are no good with credit cards etc., and there is a (usually) .1% or so extra on the interest rate.
Cheers
MelHi Phil and welcome to the forum, and the world of investing.
The 11 second solution is just a filter that Steve uses to weed out the unprofitable houses, or just to cut down the number that he looks at. You’ve got to remember that his aim was to buy many, quickly, and so they all had to pay for themselves quite well from day one. Plus, it was an excellent market for rental when he started.
I think the deals are there still, but you’ve got to know what you want. If you want capital gain, as opposed to cashflow (which is what Steve wanted), then you might be willing to take a lesser rental now. If you don’t have too many properties, negative gearing can become positive cashflow if there’s enough depreciation, and so it won’t cost you anything.
You and your wife need to sit down, and map out your plan (as Steve and Dave did – I’m guessing the wives had a little input too[?]), and then formulate your strategy from there.
I know if you ask Billfromoz, he will say not to buy now, but to wait a couple of years.
Cheers
MelHi all Canberrans
Anybody interested in meeting up again?
Cheers
MelArty, I’m surprised your kids had the restraint to plant rather than to eat!! I know we didn’t as kids, cos chocolate was a very rare treat! It used to take me months to eat my easter eggs, especially ones that came as big ducks, or anything like that.[
]Cheers
MelJudith, re selling your PPR, grab Bill’s ideas and sell it yourself! That should speed up the process.
I think you need to ‘go with the flow’ in regards to your plan. As long as the deviation isn’t 180 degrees, or even 90, and you know that it’s a small step on the path (maybe smaller than your plan allowed, but hey you’re moving forward right?) toward your goals, then that’s a GOOD direction.
Cheers
MelI agree Paul. I don’t know about any inner circle – or maybe I haven’t been invited?
I feel that I’ve got to ‘know’ a lot of people on this forum through posting, and reading others posts, but the more stars represents the number of times you’ve typed a message, not the number of properties you own. Just ask Arty, he’s said quite a few times that most of his posts have been in Forum Fun, yet he’s the highest (or is it Poltergeist at the moment – there’s a competition between the two of them) poster on the boards.
I answer people’s posts because sometimes i know the answer – and don’t like to see somebody with an unanswered question. That’s given me as many posts as I have. Plus, I type fast, so I reckon that helps too!
Cheers
MelFellas, aren’t there ‘redraw’ facilities still around?
Bill, I know a lot of people who do not like LOCs, not least for the fact that you are ofte charged a higher interest rate, and a higher monthly fee. Full offset accounts, or redraw facilities (although there is a fee to ‘redraw’) serve the same purpose with perhaps less fees involved.
Sorry for getting involved and becoming a ‘mug’ but if someone asks a question that I can answer, well, I do!
Cheers
MelThanks for that Terry. So it looks like you can still rent from a discretionary trust and negative gear, but have to carry the losses forward against future income.
Also, it only says that if you are the trustee or the director of corporate trustee. What if, for example, my family’s unit trust had some friends as trustees? This scenario I believe is also a way in which Australians mimic the American Nevada corporation, where nobody knows the shareholders (yeah, you can’t own the shares in the company then too!)
Cheers
MelHi Myydral
You need to contact a quantity surveyor – somebody like deppro or many of the other ones out there, they will prepare all this for you!
Cheers
MelSigh![
]If you guys only read the posts properly it would have been easy to ascertain that I said it. shaun, you even copied it!!
‘young at postings’? What else can it mean but relatively few postings compared to the others that Muppet listed?
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Melriffraff you can indeed rent a house off your own trust. However, if it is ‘negatively geared’ the trust losses cannot be passed down to yourselves (unless a unit trust I think and then the ato might want a closer look). Any losses must be carried forward in the trust.
However, it can offset (again I think!) other income losses the trust is having, so with depreciation you could theoretically have distributions from the trust that are ‘tax free’ – speak to your accountant!!!!
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MelNope, no CGT on refinance. CGT is only payable on Sale or Transfer. Refinancing $$ are not taxed in any way, which is the beauty about the growth.
Cheers
MelWelcome to the forum Coondoo.
There are several ways to get 100% finance that I will list off the top of my head. Hopefully otheres that read will add to the list.
1. Use equity in other house/s you own to provide the deposit and costs, and borrow 80-90% on the investment.
2. Have a ‘partner’ who puts up the money. None in for you, and half the pie.
3. Get the vendor to ‘leave some money in’ the deal. You then borrow the rest.
Remember, No Money Down doesn’t necessarily mean there’s no cash – it’s just not YOUR cash.
Cheers
MelHi Yezzum and welcome.
I’m not sure about NSW, but it’s my experience that the bond collected can be ‘up to four weeks’, so six wouldn’t be allowed.
As to pets, a LOT of landlords have a no pets policy. I suggest the first question you ask either private landlords or real estate agents is ‘will i be allowed to have cats?’ There are some out there. You might also find that extra $$ per week will be required. However, if you want to live somewhere where there are MANY vacant units, you might find a landlord who is happy to have a tenant with any extras just to get the place rented.
Cheers
MelOn a place I’m looking at that is $60K, the rates appear to be about $1300 a year, so it could be a correct figure. Mine’s a massive block though, so maybe that has something to do with it.
Cheers
MelStill in school, I am having trouble reconciling with this post and it’s truthfulness regarding the 20 properties when you have just posted in the General Investing Forum the following:
quote:
Count me into. 21 years old 11 IP, aim for 17 IP before the year ends, only been investing for about 8-9 months as well.I am happy to help, but at the moment I am unsure as to whether you are ‘having a lend’ or being a bit ‘boastful’ of that which is not true.
Cheers
Mel
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