Hi s.r.prop,I think Domain allow private sellers.  There's also the following website:http://www.thepropertydeveloper.com.au/Cheers,Michael

Hi James,I'm working on $2,000/m2 on my MUH development in Sydney's Northern Beaches.  That's a lot more than you're factoring in, but I won't be using a project builder as its a complex build requiring an excavated basement carpark and lift etc.  Remember, units are normally more expensive than free-standing houses as there's a lot of dead air i…[Read more]

Hi Boshie,I also live in the Northern Beaches, and also on a Battleaxe block with views.  Come to think of it, I'm also a property developer too given I'm currently at council with a MUH DA for a three-unit development in the heart of Mona Vale.The first thing I'd do is check your zoning.  Pittwater Council have an online faccility that allows y…[Read more]

Nice posts!

Methinks Techno = Michael Whyte in 8 years time. Remarkable similarities…

Resiwealth, nice post too! I’m gonna come see you some day soon. Like your style too much not to.

Cheers,
Michael

Hi all,

WizardfromOz, thanks for the positive feedback. I feel a bit battered here every now and again, but persist with my posts in the hope that it at least lends a little bit of insight for those that may be interested.

I like what See Change has said above. I agree that you need to move with the market, and a balanced approach of growth…[Read more]

Originally posted by SeeChange:
I think there is a place for living off equity , but to use it as a plan for retirement ( unless you’re loaded with a very low LVR ) is too risky.

See Change,

I agree. That’s why on the other thread I suggested that “If you find this too risky” then just up your equity assumptions until you’re happy with it. My…[Read more]

Borginvestor,

You miss the point that drawing down equity does not reduce your year ending net equity. The approach is based on drawing equity “in arrears” from the growth in your portfolio. You should never draw more than its growth or you would reduce your net position.

In fact you should never draw more than growth less CPI indexation so…[Read more]

Steve,

How about a danger of NOT using equity to fund retirement:

1. Paying way too much tax on your income. By living off equity you can get away with paying “tax” at the prevailing cost of capital.

But I recognise that its not for everyone, and that your asset strategy and structure can either be conducive to this or not. You need a…[Read more]

Maximus,

That’s “combined” income. [biggrin]

I’m a supply chain executive in a manufacturing company and I’m on $140K. My wife is a solicitor and she’s on $60K. She’s applying for jobs at the $100K mark as we speak, so maybe I’ll need $240K in passive income in retirement! [blink]

Or then again, maybe $100K would do just nicely thank you very…[Read more]

Hmmm….

Some very interesting posts. For me:

Age now 35
Age planning on retiring 45
Age financially free 40

You could argue I’m financially free now, but my net asset worth is still a lazy little over $500K. I want net asset worth of around the $2M mark to “retire” on. But retirement for me is just actively managing my investment…[Read more]

Yack,

I hear you loud and clear, but I’m a bit more on the Don and Liz kinda approach right now. Property is only one aspect of my structure and as a percentage I’m going to scale it back from where it would otherwise be in a strong growth cycle.

I am however about to buy another property but am picking my sub market carefully. I still like…[Read more]

Dr. X,

Amen to that!

I thought I was an exception to the rule in that I detest commercial television. I do love home theatre though as a bit of escapism, so I’m with Turboz on that one. They can be a bit violent of course, but as yet I don’t have any kids and I’m grown up enough to see them as pure entertainment.

And to think that some people…[Read more]

Old Skool Skata,

Originally posted by Michael Whyte:Rental income on IPs covers the other expenses not listed below

My example is really rough, but the thing to remember is that the total structure is “neutral” which means cash expenses is covered by cash income. You just live off the equity growth…

Its a rudimentary example, but if the…[Read more]

Adrolia,

This is by no means financial advice. But for that price you could pick up a nice new townhouse in or around Mount Gravatt that would rent for around the $250 a week mark. Wouldn’t be CF +ve, but would be a nice yield and a good potential growth area.

You get good deductions on its being new too.

I’m looking at doing just that myself…[Read more]

Rob and others,

The main point being overlooked in the discussion to date is the point that the structure is neutrally geared. So, you don’t need to cover the borrowing costs (7%) with your capital growth (5%) to be able to stay ahead. You’re neutral on holding so all of your growth is gain.

I’ll try and illustrate this with a simple…[Read more]

Bradles,

Sounds like you’ve got a good plan to me. I’m a Peter Spann / Jan Somers / Steve Navra kinda investor too and so your particular strategy sits well with me. I do take the point though, that you shouldn’t overcommit yourself. Leverage is great for maximising your growth, but it needs to be done within your comfortable servicing levels…[Read more]

Terry,

No problem. Below is “my take” on some of the key messages Steve delivered. This is by no means his complete teachings, and in all honesty is probably a misrepresentation of his material. It is just my personal key messages from the day:

Steve Navra Course Summary

The core message from Steve’s course is one of “making your mon…[Read more]

SeeChange,

Agree completely, just did his course last Saturday and the best $150 I ever spent. Looking forward to the full blown plan now…

But I think you know this. [biggrin]

Cheers,
Michael.

All,

Apologies for the double post but I didn’t know this topic had moved threads out of the development thread. For me living off equity is certainly the main game and is absolutely what I aspire to do. Let me work a sample scenario through using some simple numbers:

Year1 opening: Net asset worth $2M, total assets employed $4M (50%…[Read more]

Rob,

I think you missed the point on how this would actually pan out. Terry is correct in assuming a neutral position on the portfolio, so living of your portfolio income is not an option. Let me work one through using some simple numbers:

Year1 opening: Net asset worth $2M, total assets employed $4M (50% borrowings neutral gearing)
LOC: $100K…[Read more]