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Robbie B
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@robbie-b
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May 22, 2005 - 7:53 am
You know we belong together…
You and I forever and ever…
No matter where you are…
You’re my guiding star…
Sorry, the Home and Away tune had to be done!
I personally buy anywhere the numbers are right. If I bought where I live, I would be broke! I live in Sydney.
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Robbie B
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May 22, 2005 - 7:46 am
Absolutely… I would have commented otherwise! ))
They are some good cash-flow increasing ideas.
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Robbie B
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May 22, 2005 - 7:44 am
Originally posted by dmichie:
I’ll leave it for other readers to decide which of us has more of a vested interest in the health of the property market.
You obviously do. You have purely selfish reasons.
Unless you are from another planet or just looking around the forum with your one eye closed (as usual), you would know that I no longer write loans. In any case, even if I did, in an upward market, people buy and in a downward market, people consolidate or refinance.
I have also publicly stated that I intend to no longer directly invest in property.
Can you please tell me how I have a “vested interest” in the health of the property market?
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Robbie B
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May 22, 2005 - 7:36 am
In your situation, I would not use a bridging loan unless serviceability was the issue. If you can service the additional debt, it gives you a lot of time to sell your QLD residence. An example (assuming a 500k purchase price in VIC) is below…
Loan 1: $94,000
Loan 2: $125,000 interest only variable loan
Loan 3: $400,000 interest only variable loan with offset account
Loan 1 (secured against your current home) is your existing debt which will be deductible when you move out until you sell the house and pay the loan back.
Loan 2 (secured against your current home) is used for 20% deposit and stamp duty and other costs on the new purchase. This avoids mortgage insurance and will be deductible until you move into your new home.
Loan 3 (secured against your new home) is 80% of the home value and avoids mortgage insurance. It will be deductible until you move into the home.
Once you sell the QLD home, you pay out Loan 1 and Loan 2 and you can place any additional funds into the offset account attached to loan 3. This will reduce the cost of the loan but still leave the cash available for other investments or expenditure when ‘NEEDED’.
To not mix up your deductible and non-deductible debt, I would split Loan 3 into two. One would be the balance after being paid down and the other would be a limit equal to what you paid down on Loan 3 which will keep your borrowing at 80%. Keep everything interest only.
I hope you understand my explanation and I am happy to explain it in more depth if you need me to.
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Robbie B
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May 22, 2005 - 5:20 am
Maybe look elsewhere. TAS prices increased at ridiculous levels due to some current affairs show stories and this was unsustainable. People from the mainland saw the lower prices in comparison to other areas (where there is actually a demand for property) and they pushed the prices through the roof when they snapped them up. I think the market in TAS is just correcting itself back to what it should be. Very low!
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Robbie B
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May 22, 2005 - 5:16 am
hmackay, there is one major problem with your theory…
No lender will provide high LVR loans on the inner city glut of units as mortgage insurance won’t touch them. For those not using mortgage insurance, the interest rate is much higher but I cannot see them refinancing at 100% LVR as may be the case here.
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Robbie B
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May 22, 2005 - 5:12 am
Regarding the giving of advice, a mortgage adviser provides mortgage advice. A financial planner provides financial advice (excluding mortgages). An accountant provides taxation advice. A solicitor provides legal advice…. and so on. None of these individuals can provide ‘specific’ advice in other areas UNLESS they are qualified in multiple areas.
For example, some Mortgage Advisers are also qualified as Financial Planners or Accountants. Some are even Solicitors.
Instead of a mentor, I think a ‘team’ will serve you much better.
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Robbie B
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May 22, 2005 - 4:57 am
I find bridging loans to have their place. They are good to help you get into that next property if you are ‘certain’ you don’t want the previous one any more (as Richard pointed out) AND you do not have the funds available.
The benefit with them is that you will only be required to service on the ‘end debt’ (what will be left when you sell your existing home and pay it into your new loan) with some of the lenders so you can hold more funds in the interim period.
The biggest problem, especially in a downward market, is not achieving your expected sale price and being stuck with the two loans or an end loan higher than what you expected. If you do your numbers and can sustain these levels in the event of not selling your existing home, I do not see a problem using them.
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Robbie B
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May 22, 2005 - 4:52 am
Originally posted by dmichie:
One thing I have learned from successful people is that if you surround yourself with negative people, it will bring you down.
Robert, that is so much psycho-babble. Surrounding yourself with yes men is the surest route to failure. A good dose of skepticism, cynicism and questioning of the conventional wisdom will see you go further.
dmichie, I think surrey summed up the difference between ‘yes men’ and ‘positive people’ very well. Regarding ‘skepticism, cynicism and questioning of the conventional wisdom’, no-one does this more than I do which is clearly evident by many of my posts.
No-one is disputing your comments about a downturn in the market because it is obvious and anyone can see it. What we discussed (numerous times now) is the level of that downturn, your alterior motives for pushing such a negative outlook and the opportunities available in any market.
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Robbie B
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May 22, 2005 - 4:28 am
The reason I asked if a SMSF could trade covered calls in the US market was because I used to do this and it cost me less than $10 USD per trade through Ameritrade. The market is deep and the choices are numerous. It was difficult to not make money!
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Robbie B
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May 22, 2005 - 4:19 am
A valuation for mortgage purposes usually does come in lower than a standard valuation. However, if the lender you choose does under value the property, you have something strong to fall back on if your own valuation is solid.
As for the LOC, assuming you had other property with sufficient equity, save your money and use a standard loan instead!
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Robbie B
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May 21, 2005 - 5:46 pm
If I was a moderator, I would delete everything!!!!!!!!!!!
How annoying would that be?
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Robbie B
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May 21, 2005 - 5:43 pm
Originally posted by christobell:
It sounds like a similar situation to me, I bought a lemon from the Investors Club in Alexandria, Sydney 4yrs ago when there were hardly any apartments around Alexandria and then whamo all of a sudden there everywhere. I have tried on a few occasions to sell mine but unsuccessfully. The only saving thing is the rents are increasing around there, perhaps they are around your area now as well, if can hang on for a few years.
Hi christobell,
Surely not! The Investors Club can’t have sold you a “lemon”!!! They have such a long list of criteria to satisfy before offering a property for sale to their members. Any one of a number of those criteria would have identified the approval of thousands of units in Alexandria long before you bought. I knew about the problem in 1999 when I sold my inner city unit.
Maybe they will take it off your hands and flog it to another member. They still have a lot of stock in Alexandria and surrounding areas being offered for sale. Go figure!!!
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Robbie B
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May 21, 2005 - 5:37 pm
We tried that via email. It never ends with dmichie. Email after email of negative propaganda kept coming. One thing I have learned from successful people is that if you surround yourself with negative people, it will bring you down.
I just find it astounding that anyone would base their whole property purchase strategy on the collapse of an economy! This may amount to one or two purchases every ten years. No thanks… I look for opportunities regardless of the current economic climate.
By the way, I don’t drink beer and the Northern and Eastern Beaches locals will never see eye to eye on anything. The Northerners think they are better than us but everyone knows the best are in the East!!! )))
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Robbie B
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May 21, 2005 - 5:32 pm
Are none of the ‘living off equity’ advocates willing to respond to the questions I put forth above?
Have I scared everyone off or can no-one answer sufficiently to support this very restricted use ‘strategy’?
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Robbie B
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May 21, 2005 - 5:28 pm
I thought it was a finger stutter!
You can buy in blocks of 1,000. I have also seen less.
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Robbie B
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May 21, 2005 - 5:26 pm
Most will do it in specific circumstances. Most won’t because they want to see your ‘hurt money’ put into the deal.
When you say you secured the property ‘off-market’, what do you mean?
If it is from a relative or friend, this falls into the category of ‘advantageous purchase’ and you should have no trouble obtaining 80% of the valuation amount if the vendor provides a letter supporting your claim.
I will wait to hear the ‘off-market’ definition before I add to this.
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Robbie B
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May 21, 2005 - 8:59 am
Big assumption dmichie. Try owning Sydney property in the current market and you will learn something real.
As for people talking positively, these are single posts here and there. It is not a constand bombardment of negativity and articles saying the same thing over and over in different threads. They also post regarding a diverse range of issues.
Move on already! We know what you are saying about the economy and don’t need to hear it again and again and again and again….
Personally, I am so sick of hearing it!
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Robbie B
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May 21, 2005 - 8:39 am
As Kay says, ‘Google is your friend’!
Everyone goes to realestate.com.au
As for a mentor, I noticed you left us lowly mortgage adviser / brokers off your list. BOO HOO!!!
I really don’t see the need to look for a single mentor who does things one way (and they may be wrong) when there is such a great tool like this website that has hundreds of experienced individuals freely giving advice so you get a range to choose from. Why settle for one mentor when you can have hundreds???
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Robbie B
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May 21, 2005 - 8:22 am
It happens when a discussion diverges. I think this site just needs stronger moderation from a content perspective to tidy things up but, seeing moderation is voluntary, this is difficult to expect due to the time requirement.
I still like it here and just ignore posts of which I do not like the title or find do not interest me.
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