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I agree with that but I think there could always come a time where you need to sell a property to reinvest in another property or another couple of properties.
Hi Rudiga,
From what you’ve explained it sounds like you’ve cross securitised your properties, while the loans may be separate you were able to borrow over 100% on the second IP because you used your first IP as security. From the opinions I got from others on here, it sounds like you may run into issues in selling one of the properties. From what I’ve read in books and magazines the biggest issue comes when one property drops in value, however I’m not qualified so hopefully one of the other people on this forum can provide a better understanding.
Rudra
Hey everyone,
Thanks for the comments, it's really reinforced my decision not to cross securitise the properties I have now and any future properties.
Terryw thanks for coments about going in with family and I appreciate where you're coming from but things are slightly different. I was actually the one who wanted to invest in property but wasn't in a position to because of various factors. My parents offered the equity in our family home and so added my name to it and I'm now responsible for the loan on the family home along with my parents. With the investment property I now have only my name and my dads is on it and that again was purely so I could secure the loan to get the property. Once my dad retires which will be in the next 5 to 10 years, I will be removing him from the loan and as such it will only be in my name.
Thanks again for everyones comments.
Rudra
Thanks for that guys, I did do a quick search and went through the threads on it which was quite useful. Initially we decided never to cross collaterise our investment property with our family home as a way to safe guard the family home to an extent if things went bad. However now that we have our first one and everything is going great we were going to look into all the options for structuring loans to get the second IP and wanted to know if this is a technique many people use not just with the family home and IP’s but also between different IP’s itself. Personally I’d like to keep my family home separate from any IP’s I buy, but am always open to change if it brings about better benefits.
Also Richard I visited your website and read your document on the ten disadvantages of cross collaterising and found it really interesting. I take it that represents your standpoint on this topic?
Rudra
Hi god_of_money,
Thanks and I believe I have made the right decision for me.
Yes I understand both Premium and Storm charged fees, however this doesn’t make them the same.
As I mentioned on another post in another topic, we got an independent valuation done before we purchased the property and it the value was higher than what we paid for it. We know what happened with West Point and this made us aware of companies such as this and as such we did the necessary checking before going into something like this.
Yes they both said that property and shares respectively would rise in value, however I think you will find the shares are more volatile than property and this isn’t something Premium told us, it is something we discovered from our own research before deciding to invest in property. Property values are going to decrease in this economic climate and we’re prepared for that to happen, however it should be noted that different areas will experience different fall levels. Where I currently live is the area in which we purchased and we have seen first hand how property prices have been affected by this economic downturn. Prices in our area have barely dropped if anything at all where as the closer we look towards the city we have seen massive drops in prices.
When I went to Premium Finance I didn’t go in blindly not knowing anything about property or the market, I had done my research for well over a year in the area I live in knowing that my first property would be in that area. I would like to thank everyone for their opinions and advice though, it’s always good to hear what other like minded people think.
Hey everyone,
Firstly we did get an independent valuation of the property we bought as we know all about West Point and Storm Financial. The valuation was above what we paid. We put a 10% deposit down on the property and used equity in our current house to get this. We did look on realestate.com about a year ago for properties in Logan (where we live) as we were new to investing we wanted to invest close to home for a bit of reassurance and because we knew the market in our area. We found properties and even put offers in, we decided to go through a mortgage broker to give us easiest option of finding the best loan but found they were useless and gave us the worst advice possible. At this point we decided to give it a break and wait a year, at this point we decided to see an accountant, who had been recommended to us by quite a few people, to see how we should be setting up our finances when we buy an IP. Our accountant actually recommended us to Premium Finance and he said he had examined their books and what they did and was happy with what they offered. Given his reputation we trusted him and made an appointment to see them.
As for the loss of 10k a year, this doesn’t phase me at all. I understand what you are saying that if I was expecting to sell in the next few years I would need massive captial gains. But I’m not expecting to sell in the next few years, I want to hold onto my property for at the very least 10 years and then decide.
As I said I’m happy with the service I was provided by Premium Finance and with the investment property I purchased. I have no doubts that some people will not have had a good experience and that some people will not agree with the way I went about investing in property, but it has worked for me. However I have made note of everyones opinions and suggestions and will definately take them into consideration when I purchase my next property.
god_of_money, just so I understand your standpoint,what you've basically stated is anyone building wealth through investment properties is creating their own grave of debt? Secondly do you understand exactly what happened with Storm Financial Services? Because I think if you looked at their business plan and compared it with Premium Finance you would find that there is a massive difference in how the 2 conduct business. Storm Financial Services actually focussed heavily on the share market and to invest in it by borrowing against the family home.
What Premium helped me do was assess my current situation to see what I could comfortably afford but also identify properties which would work for me. They haven't put me under a sea of debt, in fact it is only costing me $200 a week to own my investment property and thats not just the cost of the loan but also rates etc… I haven't even had to change my standard of living and am extremely comfortable.
I understand you and many others might have had a bad experience with them but I haven't and am extremely pleased with the outcomes I achieved with Premium Finance.
god_of_money, yes I have heard of Storm Financial Services but the difference between them and Premium is I'm not investing in Premium Finance. There is absolutely no investing done with Premium Finance, yes there is payment of $5000 which I paid AFTER my property purchase went through. The $5000 was money well spent in my books as it made the process easier and as it is a once off payment and allows me to go back to them in the future at no cost. I plan on utilising them again this year when I purchase my second investment property.
Hi everyone,
Happened to come across the forum when I was doing a search for premium finance because I was looking for their website as they going to use my testimonial on it. I was quite surprised at all the negative comments on here because I used their services and didn't have any issues at all. Now most people on this forum will probably say I work for them and why am I posting the day I registered. Well I don't work for them and only reason I registered was because I thought I'd give my 2 cents. Also I've used this same post on another thread about Premium Finance, and thought I'd paste it here too. All the below applies though and am happy to have anyone contact me to talk about it further.
I found out about Premium Finance through my accountant who I trust and figured I had nothing to lose by seeing these people. I had previously looked at investment properties on my own and had a heap of trouble finding property and dealing with the banks. When I visited their Brisbane office I went with an open mind not expecting anything out of it. The first person we dealt with took our details and finances and passed it to another person who analysed it all to see what our borrowing power was. They explained throughout the whole process what they did and we even asked them about Westpoint because it was the first worst case scenario to come to mind. They explained what Westpoint did and how they differed. Basically they help people build wealth through investment properties, they told us they don't own any properties and simply work with real estate agents to find property which would fit the type we were looking for.
After our day with them they showed us a property and we liked what we saw and asked to put a deposit down. They didn't force us to make a decision there and weren't under any pressure. Can't remember the exact date we went to see them but the property settled end of January and we've got tenants in and haven't had any issues.
I will happily refer people to Premium Finance and no doubt there will be a few people wanting me to prove that I don't work with them so if you want to contact me just let me know and I'll give you my details. No doubt there have been some bad experiences for some people but I don't think its fair to judge a place purely based on these.
Hopefully I hear what a few of you think and have the chance to say more about my experience
Cheers
RudraHi everyone,
Happened to come across the forum when I was doing a search for premium finance because I was looking for their website as they going to use my testimonial on it. I was quite surprised at all the negative comments on here because I used their services and didn't have any issues at all. Now most people on this forum will probably say I work for them and why am I posting the day I registered. Well I don't work for them and only reason I registered was because I thought I'd give my 2 cents.
I found out about Premium Finance through my accountant who I trust and figured I had nothing to lose by seeing these people. I had previously looked at investment properties on my own and had a heap of trouble finding property and dealing with the banks. When I visited their Brisbane office I went with an open mind not expecting anything out of it. The first person we dealt with took our details and finances and passed it to another person who analysed it all to see what our borrowing power was. They explained throughout the whole process what they did and we even asked them about Westpoint because it was the first worst case scenario to come to mind. They explained what Westpoint did and how they differed. Basically they help people build wealth through investment properties, they told us they don't own any properties and simply work with real estate agents to find property which would fit the type we were looking for.
After our day with them they showed us a property and we liked what we saw and asked to put a deposit down. They didn't force us to make a decision there and weren't under any pressure. Can't remember the exact date we went to see them but the property settled end of January and we've got tenants in and haven't had any issues.
I will happily refer people to Premium Finance and no doubt there will be a few people wanting me to prove that I don't work with them so if you want to contact me just let me know and I'll give you my details. No doubt there have been some bad experiences for some people but I don't think its fair to judge a place purely based on these.
Hopefully I hear what a few of you think and have the chance to say more about my experience
Cheers
Rudra
