Its up to you but for goodness sake don't pay P. Pay the cash into an offset account (which will lower the I paid on the loan) and can be withdrawn later for more purchases.

Just your opinion. Might not be right?? Depending on where you are buying these properties – you may well be right!

Well it is really not creating "equity". You are just using a loan account to put your "savings" into. It is a strategy though and you have to be congratulated for having one. Many don't. Not my cup of tea though – to each his own.

Better than low IR at deposit at bank – Yes absolutely. Better than using an offset account – Absolutely not, No. Better than a different strategy altogether? dunno – depends on your risk factor and personal circumstances.

For those who don't spend $6K pa on an RPData subscription the best 2 (small $s) pay sites are:

http://onthehouse.yahoo.com.au/
A $9.95 annual susbcription fee

http://streetsales.com.au/v1/app?page=Home&service=page
Pricing from $19.95 for 3 hours per state.

Be very careful of domain or re.com sold figures as they are REA advised and often wrong on later closer inspection.

Brett, you and the projects sound better now – yes. Probably would have been better to not leave out all the "key pieces" of information in the first instance but I realise where you're coming from.

Development is a risky business – ask Mr Raptis. But it can be done at a profit – ask Harry Trigubof.  You need to have a min of 20-25% profit in it and more usually 30%+ before you even begin. The margin on that duplex looks very thin at $40K – but it is not clear from your post whether that is just your cut or the profit on the whole deal.

Anyhows all the best with it. Let us know how you get on.

Hi Brett,

What kind of help did you have in mind? We are based on the NSW Central Coast.

  I have seen a lot of contracts in my time but I've never seen one with a valuation in it.  However, was this valuation done by the same valuer as hired by your lender? Most valuers will only value at their valuation or the contract price, whichever is the LOWER. Additionally, valuations can be different from the same valuer depending on the reason for the valuation.

  Yes, but most lenders will not reval within 6 months of a purchase.

  Their valuer probably did the val at the contract price.

OK. You are competeing with FHBs at this lower priced end of the market. The thing in your favour is that most FHBs being Gen Y want evertyhing in their first home and no work to do.

Yes, as buyers Agents we regularly do this. Think of it this way: Why would a Real Estate Agency spend time, effort & money advertising a property, putting up signs and window displays and holding “Open For Inspections”, when they could make one or two simple phone calls to their “contacts” (Buyers Agents and investors) to gain a quick sale on a good property?

That can indeed be the case. Or it may be that it is "ugly" and does not have wide market appeal. If you, with your knowledge of how to change it, can make it attractive, then this could represent good buying for you.

For every $1 spent on your reno you need a min of $1.50 back in end valuation but more normally $2 – $3 back in end val. This should also translate into better rental return and quality of tenant you attract. Remember to include the price of your own time into the reno costs for the calcs.

So either hire a professional – like a BA – who do this all day everyday for a living OR get more practice yourself OR enlist the help of a trusted experienced friend BUT certainly when you do find something that you think fits the bill – get a pest & building report done.

Yes, probably and No, not necessarily. Look ,the FHB market price range is still hot. Most REAs are lazy – they do not bother calling people back at the moment anyway. We work with them all the time and 50% of them don't call us back – we have to chase them. The good ones call back and those that know they get repeat business from you will tend to call you back. But most will only keep you in mind if you keep putting yourself in front of them.

Who cares? Owners have an emotional attachment to their home – yes they will get offended. If you care too much they will walk all over you. You need some emotional detachment.

For us in our business and even when buying for ourselves, we will do a search and get maybe 120 properties that are possibilities. Then we do more reseach on each one – on our desktop PC and this gets us maybe 2 to 3 dozen properties. Then we go inspect each one of these and make a short-list of sometimes only 1 property – at most 2 – 3 properties. Sometimes zero properties!
So depending on our inspections we might only make one offer on one property. We might negotiate a bit backwards and forwards on this one property but we will never offer more than we have worked out what the market worth is. If this results in a purchase – fine. If not we move to property #2 and so on.

We are not really into putting multiple low ball offers out into the marketplace. We can't afford the reputation that gets us. It is a strategy that can work though. You might be able to make it work for you if you are comfortable with it.

For a first time poster you offer some very good advice LK – or at least you are supporting my confirmation bias.

Their lending criteria may have changed but it used to be that if you could show good steady income from share trading or option premium they would take it into account – but you had to have a 2 year history of it.

Sheran, I'm sure your Mother is just thrilled

Excellent – the market did move up in the last few years for you.

huh????? You have held it for only 4 years and it has generated some equity for you already but you think you'd be a dummy to hold it? What the?

  What? you have some terminal disease? or are we just talking you have no job and no money? If the latter (as I suspect) then that is a very, very poor excuse to sell a growing asset. You'll spend the cash and in a short period you'll still have no job and no money + no investment property either. My suggestion is "get a haircut and get a job" and I say that in the nicest possible way.

Yep, probably right.

I'd keep it – but I'm just a greedy landlord in it for the money

Yes, if you take the view that the market will drop from here and decide to sell there's no better time than when the free cash give-away is on.

Dreamin' – you don't have any money remember and it is tenanted. What are you thinking of doing? Turfing the tenant out while you do a reno and then not collecting rent?

  That was NOT a newbie mistake – plenty of experienced investors did the same thing.  Yes its a crappy situation to be in but no-one really saw the GFC thing coming or coming as fast as it did. (except for those experts who have correctly predicted 17 of the last 3 recessions that we've had). All indications were that interest rates were heading skyward and you acted to protect yourself – you are to be congratulated for that. Don't beat yourself up.

2 things wrong with this thinking:
1. No lender is going to lend to an unemployed person or someone with a short work history in the current credit crunch environment
2. Hoping that prices will come down is not a weath creation strategy and it might prove to be a fallacy.

I don't have anyhting to do with Neil Jenman one way or the other, but he seems to like the idea of Buyers Agents.
http://www.jenman.com.au/news_story.php?id=89