>>I’ve talked to a finance broker about this and he came back and said that the lenders would not consider the vendor finance as a deposit from me but I still had to come up with 10% (or whatever). Is this true of all lenders?<<

Absolute balderdash. There is more than one way to skin a cat.

It is however essential that you will be able to service the loan AND have some cash reserves in case there are tenant problems.

I am sure that any of the brokers on this site can help you.

Getting a detailed explanation in this thread is something else again.

I cannot understand why so many people are so desperate to know all the ins and outs in great detail when the whole thing appears for most of these questioners to be merely a theoretical question.

Is it not sufficient to know that it can be done ?

When the time comes and you are ready go and see a mortgage broker and a solicitor. In that order.

Pisces

>>*Not anymore since the vendor has gone broke and the property is in a foreclosure now and is identified as a ‘high risk’ by the R/E agents.<<

That is an opportunity to pick up the property below market price Penguin.

Anyone who buys a property relying on having a tenant has some marbles missing as one’s security doesn’t lie in the tenant so much as in the location.

The moment the property is vacant possession the competition to buy is likely to diminish thus making it easier for you to buy something at a better price.

>>is deemed as a high risk by the R/E agents<<

It is best not to rely too much on what they say. Most are notorious for not knowing what they are talking about. If they were really smart they would be buying instead of trying ro pick up some commission here and there. Most estate agents barely make a living.

Rely on your own research.

Pisces

Here is the report Yack is talking about

http://www.propertyreview.com.au/archives/2004/18022004/headline/data/PMI%20Group%20-%20BIS%20Shrapnel%20Residential%20State%20of%20Play%20report.pdf

Pisces
Auspac Finance

I think I know what it is SIS.

You went on holidays to Fiji recently (true) and met the daughter of one of the Chiefs there and you’ve been promised a BIG, BIG, dowry if you marry her.

Now you are depressed because the thought of no longer having the challenge to struggle to achieve something depresses you and you are now torn between marrying and becoming rich [] or doing your own thing and becoming rich. [:o)]

Pisces

Chan of course with all his clones will, without a shadow of doubt, out earn anyone else in this business.

That is called Multi Level marketing

Pisces

>>You go to a party, you see an attractive boy/girl across the room. HE/SHE COMES OVER and says, “Hi, I hear you’re great in bed”.

Whereupon you pull a blow up doll of yourself out of your bag and say “$ 10 a quickie”.

That is short term rental marketing.

>>You go to a party, you see an attractive boy/girl across the room. HE/SHE COMES OVER and says, “Hi, I hear you’re great in bed”.

Whereupon you sell him/her a blow up doll of yourself.<<

In addititon to selling the doll you also sell him/her two dozen of different colour and shapes condoms.

That is multi marketing

>>I would argue that because PPOR mortgage rpts are made with after tax dollars, outside of RE booms, an IP is a better tax vehicle.<<

Look at it this way Bruce, you’ve got to live somewhere, nothing can change that.

So cashing in and moving onto the next one can be a very profitable venture.

Pisces

Hi Jay, I noticed that this is your first post on this site. Welcome.

Your post made me sit up and question what I said earlier on.

You said : “The profit on EVERY house is tax free if you never sell.. simple refinance and use the money to purchase further property.”

Firstly it is one way to ‘step up’, going from one house to a better house (in a better neighbourhood perhaps or to a larger house or to a house in the same neighbourhood but with say a view) and one is even able to repeat this process several times over a number of years.

How else does one get into a position to improve one’s own home without putting pressure onto oneself by taking on a larger loan ?

Secondly it enables one to put some C-A-S-H into one’s pocket without incurring a tax liability.

Thirdly one may even be able to ‘retire’ some of one’s (own) homeloan debt. That doesn’t mean of course that one cannot borrow on the new home (to buy an investment property).

Fourthly, if one is prepared to accept the inconvenience of moving house in order to obtain non taxable CASH as well as buy a replacement house below market value, isn’t one better off than taking on a loan (or increasing one’s present (own) home loan to ‘step up’?

Fifthly, I see some problems in retaining the present own home and turning it into an investment property
if ever the time does come that one (for one reason or another) were to decide to sell that particular property.

It looks to me as if one may well have a problem with the taxation department on one’s hands as far as the taxfree dollars, which are presently locked into the property, are concerned.

Perhaps I am a little bit too paranoic there ? I just think it nice to have a clear cut situation there, not some fuzzy situation which may cause a dispute.

I would however very much welcome other people’s point of view about the subject !!

Pisces

Gee, you are putting me on the spot here as everyone has different criteria.

Personally I would judge that an increase in value of between $ 100 K to $ 200 K should be ample to start thinking of cashing in and putting some non taxable money into one’s pockets.

I guess one way of looking at things is that if one were in a position to sell one’s home for say a profit like mentioned above AND at the same time one is able to replace it with a suitable home in the same market say 15% below market value (or a house which one will be able to add value to by undertaking some renovations) one would be doing extremely well and it looks to me a foregone conclusion for many people as to what decision they ought to consider making.

One problem one may enounter is objection by one’s partner who may look at the home in a different light, in a, what shall we call it, a more emotional way.

The decision to sell and replace it with another home depends totally on the individual’s position and outlook.

Pisces