Thanks Derek. Interesting to read your insights. Much appreciated.

Thanks Richard,

Have dropped you a line and received your advice by email.

Thanks again for your assistance and i will be following up with you with what we have discussed as it was very informative.
It is almost like a secret discovery yet the information was already there for everyone to see!  

For everyone who is looking at investing or increasing their investments, there is no better solution than getting the structure right from the beginning. It will save you thousands of dollars and allow you to keep the ball rolling with more investments.

Don't be foolish thinking you can do it yourself as i can assure you i have read many property investor magazines and even hundreds of post on this forum but there are still little issues one can miss and mess it up.

I already knew about the basic stucture such as not to cross collateralise and have seperate LOC's for both personal and investment as i have been reading this forum for a while now but there is much more to it than this.

Find a mentor like Richard who will save you the headaches later on. Get it right from the beginning.
Ten seconds of your personal time can save 10 years off your investment time 

Thanks again Richard

Robert  

Thanks L.A Aussie for your comments.

It's great to hear your stories of those people you know who have done well for themselves and in particular the franchise industry.
 
I found out today that the fish and chip shop in manning road, Manning, Perth just got SOLD for $120K and the new owners bought the land to go with it! Boy that was quick.

I thought about the hours for a fish and chip shop and  they do seem crappy hours. Since my potential business partner is in dire straights with his finances, it would not be possible to include him in my business plan.

A cousin of mine is in the real estate business and she does flipping for a living with her husband. They have been on the move from house to house in Perth for the last 15 years and now Melbourne as they buy one property, use it as their PPoR until they sell it, make a profit and move to the next one and repeat this process over and over. What a crazy lifestyle considering they have 2 kids who have to keep changing schools! On the plus side, they have made millions this way. 

I like the idea of making this kind of money but not the lifestyle! One idea i had would be the same as many other novices in property who would find rundown properties to renovate and then sell. Best case scenario: My renovation skills would be the typical renovator type such as paint walls, tiling, replace carpets, update kitchen and bathroom with new fitouts. Worst case scenario: Could not do major fitouts and structural changes. 

It looks like i'm going to have to get more active in figuring out what the next step i am going to take. Find a business partner, in what business line, invest in property. Decisions, decisions…

Going back to a 9-5 job is not too appealing and every time i come back to this forum to seek ideas and advice, i get the investor bug and realise it should be business and investing in property or if employed be a high income earner and buy property.

I will start looking at apartments for sale in Perth and start making some offers on them i reckon before starting a business. Can't afford much over $250K and am taking on board the possibility of interest rates hiking up to the 10% mark over the next couple of years.

Glad to see someone has replied…
Thanks
Robert

Thanks Marc for the valuable information. It is great to find a forum such as this one and have such a positive response from people like yourself. 

I am new to investing and it is opening my eyes to new possibilities. Despite having a degree in Accounting but not working in this industry, i have no clue about structuring finances for investments as we were never taught this! I guess i need to teach myself and learn from others in this forum!

I hope it can also help all the others out there who are looking to buy their first PPoR. As the rental costs in Perth are getting out of control, i figured i could try and find a CF+ property and see how i go if i move into it so if i couldn't make the repayments in a year or so due to the upcoming interest rate hikes or my fluctuating income goes down then i would have to go back to my folks place and rent it out as CF+

I have considered moving back to my PPoR (3 bdrmHouse) and then rent out the apartment like you mentioned although i figure the rent from the house can be increased every year at a higher rate than a 1 bdrm apartment and the depreciation (House built 2002) and interest can be claimed. As i am still new to all this i have read that others have an interest only loan and offset account so i could structure it this way. My current ANZ loan is P&I and no offset. The apartment would be built pre-1987 and as my price limit to buy is $180K, i could not claim any depreciation on the building  except for the internal fittings etc. The advantage is having an IO loan to claim the interest.  I still need to do some calculations to compare the benefits of moving into the PPoR but your advice on refinancing is exactly what i needed to hear.

The reason is that i contacted Ratebusters the other day for a line of credit of $100K and am told i would need to refinance my existing house loan $90K from ANZ over to them to release it from the ANZ bank and use the equity. The LOC at Ratebusters is really not a LOC but an offest account to reduce the total loan balance ($190K less $100K offset) so the interest payable is the same as LOC. Feeling confused i looked around on the net to see if there is any advice on all this. Furthermore i am told all loans at Ratebusters is Mortage insured and the upfront fees is in the thousands, however, the interest rate is lower which i calculated would be better off than the banks in the long term. My reason for not going to Ratebusters is my concerns of them increasing their interest rates at any time (i know the banks can also do this too), not knowing who they borrow their funds from (US market?), no branches and they are in Adelaide and i am in Perth. I know now, from this forum not to borrow again from the ANZ bank if i buy the apartment as i would be cross collateralising or is this only if you have more than 2 properties with the same lender without future investments in property being financially messy?

I figure as well that a 5% return is too low as for an investment property. My calculations show that the house i am currently renting out is only cash flow positive at 11.5% because i am a low income earner and depreciation/interest deductions dont make much difference to my tax. The house is rented for $220p/w and i owe $90K. Loan repayments $165p/w plus annual rates $850, water rates $550, landlord mortgage insurance $330, property management fees 8.5% plus gst. i try to look for a 8.5% return on the apartment and then hope for capital appreciation and increase in rent returns.

I guess finding an apartment at the auctions is out of the question so i keep trying now to go out into the market and keep sourcing. 

Thanks again for the informative advice.

Robert