I am an as fresh as they come with PI and feel hesitant to put my opinion in but I love the concept and spend hours each day researching, thinking about ideas for new investments and/or how I can further my portfolio.
 
I bought a large block in New Norfolk (out of Hobart), a house in Central Frankston (VIC) that I'm subdividing and intend on building which make my portfolio +cf , My salary is only $46k gross. All in the last 6 months since my 21st bday.

People have to think outside the box. If you cant do it on your salary, think of another style of PI, team up with someone or a few.

I have plenty of ideas but can only take one at a time.

Have a look at Frankston and the infrastructure taking place shortly. Alot of growth and on the beach.

Depends on what your after. I have purchased in central Frankston – with a large block that is being subdivided currently and intentions to build a 3 bed 2 bath townhouse/unit. Will be +ve cf after completion.

Richard,

Ok so I understand i would have to service the new loan for whatever amount. And may or may not be possible with my current salaray.

Im still not sure how gaining the extra land in the backyard can be used to my  advantage. So your saying that the equity gained cant be used as cash. I still have to prove and be able to service the new loan aswell as the existing.

What im trying to get at is: do you think it would be possible to be able to fund such a project based on my figures- and if any equity gained can somehow help??

Thanks again. How long did it take you to get to where you – over 30 cashflow positive properties? And you can live off the positive cashflow?

Richard,

I have been reading your posts in other threads – they are very helpful and provide great info. So basically your saying that even with equity gained, i still have to be able to service the full $200k loan? I cant use equity gained as a deposit therefore only needing to borrow less?

Im a little confused as i have read some of the other threads about equity being used to purchase second IP. Is this totally different if your constructing as I wouldnt be receiving a rental income?

Thanks for your time

Thanks quickchick!

There are so may little things involved and extra’s that pop up. Especially when your a total freshman.

The land in Tassie I am waiting for a while as the subdivision has to be timed. Waiting for access from the top of the block aswell as the bottom.

You made a good point, I will email the s/d company and ask them about gas, water etc.

I appreciate your response.

Sasha

Hi Everyone, this is my first post. I have spent the last 2 days reading the whole thread. I plan on moving to regional areas after my first project listed below. Please take the time to have a read

Im 21 and have been learning/researching/networking property as a whole for the last 6 months now. I have just finished Steve's book '0-130'. I think the concept of cf+ property investing is the way to go for sure! I absolutely love property and I believe strongly I have found the area I want to put my time towards.

In September 09 I purchased my first piece of property in New Norfolk Tasmania, overlooks the Derwent River, mountain and snow views (winter), about 25-30 mins from Hobart. It's a large block on a bit of a slope that can def be subdiveded as others on the street have done so. $45000. I was going to try and build but talked myself out of it as I was even more of a noob then. Currently holding a bit under $250 p/m interest only repayments.

As i was so excited over my first property investment i naturally wanted to do more. I bought a 3 bedroom, 1 bathroom in Central Frankston, down the road along the beach from Melbourne $310k. It too had a large block which I have commenced the process of subdivision, plans and permits are being worked on currently. Unfortunately the previous landlord hadnt pushed for a rental increase for sometime so it was a little under market value. Current tenants have been asked to leave by 1st of May where I will do a 2 week clean up, paint the inside and get fresh tenants in and the prop will be back at market value for approx $300 p/w. (thats the plan anyway).

Now obviously I have 2 negatively geared properties. After the increased rent out by over $400 p/m. The company that is doing the s/d guarantees council approval otherwise money back. So.. With the gained equity of the backyard as a seperate piece of land- proposed value anywhere between $120k-$150k plus a portion of my salary. I intend to construct a 3 bedroom unit or townhouse. Finance obviously like always will be the major issue. Speaking to my broker and the s/d company i should be right.

Proposed rent will be $315-$325 + $300 for existing dwelling. Conservatively $600 p/w.
Construction $200k??? – equity gained over 100k.     funds needed $100k loan
Final result = 2x dwellings $2500 p/m rent.   Interest repayments for 2 dwellings + tassie block $2100 around.
Equity gained approx $200k.

Can anybody please give thoughts, crticism, anything!!! On this idea.

P.S Frankston is an area that is set to boom. $500million marina being built (Melbournes new port), Freeway extension (18 minutes closer to city), new state of the art huge golf course, the list goes on.

Thankyou immensely.