Forum Replies Created
I am also interested in the whole overseas thing, at least so I know what my options are. My business partner convinced me to hold off on the investing just for a few months while we’re building our business, as I am the programmer creating the system that is our business model, and I need to focus. (his words). Our business is going to fund both of us jumping into the +ve cashflow property market. (in a nutshell, we’re building an extremely useful online service for real estate agents, but I won’t say anymore for now)
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098ah, cool, thanks for clearing that up!
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098good points. I don’t mind if the tenant walks away because it means I’ve collected above-market rent for the period, which suits me just fine. What do you mean by “it is also easier to withdraw any increase in equity”?
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098ouch.. i think i heard about that 99 year lease thing… how does it work? are there any easy loopholes around it?
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098Oh, I forgot to mention, I’m 24 years old… hoping to get my first property shortly!
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098Hi Bella, I’m fairly new here too (less than a month) and I’ve been using my time so far to research and learn about how the property investment game is played. I haven’t bought my first property yet (waiting for a couple of small hitches to be resolved first) but I have learned a lot so far. First of all, you’ll find that pretty much everyone who frequents these boards is against negative gearing. The reason for this is that negative gearing creates consistent loss in exchange for potential long term reward, and pretty much everyone here is focussed on the cash flow from day 1 investment solutions. Mainly, these are:
1. buy-and-hold, using Steve’s 11-second solution (i.e. divide the loan amount by 500 to get the minimum rental you should be receiving each week; this ensures your mortgage is completely covered by the rent)
2. wraps: this is where you buy a property and on-sell it to someone else at a slightly inflated interest rate, thus giving yourself cashflow from day 1 and helping out the person in that they don’t need to qualify for a bank loan.
3. lease options: this is where you buy a property and lease it to someone, giving them an option to buy at a set price after a period of time.options 2 and 3 don’t allow you to keep the property indefinitely but they do allow you to make both lump sums of cash and effectively get above-market rent while you are in control of the property.
I would suggest, like AD said, that you take a look at the fast track tape in the resources section, and also that you start researching options 2 and 3, as they are where you’ll be able to create financial freedom for yourself sooner rather than later.
Also, to find out more about negative gearing (pros and cons) check out:
https://www.propertyinvesting.com/strategies/negativegearingThe other strategies are at https://www.propertyinvesting.com/strategies
And don’t forget that you can ask as many questions as you like, people here are very friendly and usually more than happy to answer your questions.
cheers,
Nathan
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098Sooshie, thanks for the advice. I actually do have 1 or 2 people I can think of who might be able to help me out if worst comes to worst.
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098Oh, I forgot to ask. Since property management costs are based on the rent collected, if I set up a lease option deal where the rent is, say, $100 above market rent because it’s being credited to the final strike price, so for example, if normal rent is $120 and I’m charging $220pw with $100pw credited to the purchase, is the 6-8% property manegement fee going to be taken from the $120 or from the $220?
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098Ah, right, thanks. That certainly makes sense, considering the cash on cash. I also am after immediate cashflow, rather than very long term money that may as well be a dream for how real it seems.
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098yep that does, thanks
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098ah, cool. thanks! so, when you say allowing for vacancies, I assume you are mainly referring to the time between when I make my first mortgage payment and when the tenant comes on board?
Edited by – [email protected] on 10/01/2003 3:59:58 PM
Hi Steve, thanks for taking a look. I think one big thing for me is it showed the difference between the normal way people would do it and lose money, and a lesser-known way of doing it (i.e. lease option) and make money.
Question, what is B&H? Also, with rental management, are you simply talking about maintenance and stuff? How would I work out this figure?
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098ah, thanks. It’s always confusing when you see a post using unexplained jargon and you have no idea what they’re talking about.
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098The context was from this post:
http://mastermindforum.com/phorum/read.php3?f=2&i=24273&t=24273quote from the message: “I have a couple that won a HUD bid, but can not qualify for a loan. The deal is that we’ll do a double closing, I’ll get the title, and then “sell” to them on a lease/option.”
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098AD, I’d love to have a chat whenever is good for you. My number is as per my signature, or I can call you if you prefer. I only have internet at work at the moment, unfortunately, and it’s heavily firewalled, so I can’t chat online yet. Not until mid-february once I move house and can get my broadband connection on.
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098I have also lately been making sure I say not, “why can’t i?”, but “how can i?”. As a result, I’ve now gotten in contact with a mortgage broker (David and Hilary O’brien) and the wheels are now turning to try and see what I can qualify for. I’m also learning about wraps and how the contracts work and stuff like that, so hopefully it’s full steam ahead, even if I still feel like I don’t know what I’m doing!
Actually my biggest concern right now is lack of understanding in regards to why my calculations always always put me in the negative instead of the positive. I want my first property to positive cashflow from the word go, as I am not interested in all that negative gearing stuff. Also, I need to study my chosen area(s) more in detail so that I have a better chance of putting a good deal together. Problem with that is, of course, it helps to know what to look for when doing that studying! But it’s all a journey I guess, and as I keep hearing, if you don’t jump in and be willing to make some mistakes, you’ll never progress.
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098ok, so how am getting a return on my investment if I’m in the negative as far as my cashflow is concerned?
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098$495 for the NSW contract.. ouch! But hey, it’s an investment in my future, I suppose, especialliy since the alternative, paying 1000’s in lawyer fees, is a lot more expensive
They didn’t have a contract for the ACT yet… which is where I live so I guess I should focus my initial efforts in the Queanbeyan area, which is close enough to virtually be in canberra, yet is in NSW.
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098Thanks Dan. Actually, although I have little understanding of the difference between a P&I loan and an interest-only loan, I contacted a mortgage broker today to see what it will take to help me make the first step into getting my first investment property, so I guess I’m going to learn all about loans very shortly!
Question: What is “Yield”?
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098Ok, My three main goals for 2003 (to be revised once I get a better understanding of the property game and what the limitations are), are:
* Eliminate my credit card, computer and car loans
* Acquire my first 5 (or more) investment properties, and all must have positive cashflow from day 1
* Finish writing my website content management system software so that I can earn PI capital from clients who use my software
email: g e n e r a l g h e r k i n @ y a h o o . c o m
phone: 0405 411 098
They didn’t have a contract for the ACT yet… which is where I live so I guess I should focus my initial efforts in the Queanbeyan area, which is close enough to virtually be in canberra, yet is in NSW.
