Nathan’s investing style is just ONE form of MANY type of ways to invest (dont get me wrong, i love Nathan’s work!)

With any investing style you should NOT follow it to the T.

but rather learn from it and morph it to suit your financial + personal goals.

I have more then 100+ client who are under 30 who may not have as many IP as Nathan; but outcome/results are the same – Good base for wealth creation ( either from rental yield or Capital growth)

But be aware in property investing; it’s not about quantity but quality as well.

Regards
Michael

ferdinandch -you should only cross if it has a benefit to you and not to simply make the bank happy – note crossing your loans means you are not risking ONE property but 2+

Example of when cross MAY be worthwhile:

1. Reduce LMI significantly!
2. Only way to service/ pass the loan through and another banks are not an option.
3. Commercial purchases – where there is a massive drop in rates + terms and conditions.
4. Unique/specialized purchase ( is you think the purchase is worth the risk as well)

P.s you will find the NAB Borrowing Power Calculator is not up to date and is not the same cal that us broker or the bank credit manger uses anyway.

Regards

As often as you like- but generally i tell clients to wait 3 month –as prices won’t change for any time frame shorter then 3 month.

Some banks will only allow a Max of 2 equity release per year; after your 2nd one they will start to ask a LOT of questions and it does get harder.

Regards
Michael

Don’t top up what ever you do.
you will have to:

1. Draw this equity $20k as a SEPARATE loan ( also called a split loan) or LOC ( the choose is yours) – the money needs to be parked into a new separate ( normal or offset) account.

In any Mortgage/homeloans – the bank allows you to have up to 3-5 splits

Regards
Michael

that’s one of the big misinterpretation ppl have with CF properties….
you have the EXACT same property! but slightly different loan set up- so how can you say one is a CF property and the another is not??

Remember the end result if it’s CF or Negative replies within the deal/ property it self.

I can buy a property for $500,0000 and only rents for $300 p/w – so say i i use $300,000 deposit and have a $200,000 mortgage–> yes you get + rental income but no it’s not a CF property purchase as such.

Always look at the bigger picture and long term end results; not what you see or don’t see week by week.

If serviceability is going to be a problem; then yes i suggest a FULL i/o loan.

Regards
Michael

Really make a NEW offset account for EVERY new mortgage split- UNLESS the funds is going direct into a cheque or as a redraw on the new mortgage account.

Regards
Michael

HI Ferdinand,

I was in a simliar position as you 4 years ago; my partner also didn’t like the idea that i had a huge investment mortgage and a lot of “free cash “in the offset lying around.

Financially it made sense to do I/O with offset for my 6 IP- but at the same time i wanted my partner to sleep peacefully and to stop complaining … so i made all my IP Half:Half — 50% I/O and the another half P/I with a offset account attached to the p/I part only.

Really when you think about it- it’s hard to have more money in the offset then the mortgage ( well it will take a while ^^) – so instead to of making the whole loan connected to an offset- it made sense to connect it to the p/i part only

1. Wife is happy with having some P/I
2. My debt is reduced
3. the P/I part is paid off MUCH quicker- given it has the 100% offset against it.

So i really have 12+ loan accounts with 12+ mortgage account for 6 IP – headace? yes it is….accountants hates me? – yes he does…
was it worth it? ABSOLUTELY

Regards
Michael

I find it resolve a better solution and quicker solution to be “fair” rather then be nasty and do “everything” by the legal books etc.
i would- Go to the tenant’s place and have a “friendly” chat and just let them know you are the new owner and wanted to see if they have “found” a place to move out to …by doing this
1. you can confirm they are AWARE of a move
2. Build that “relationship”
3. Understand each another requirement — you never know maybe they only need an extra 2-3 days??

Regards
Michael

i would not WAIT till the problem arise…i would get the solicitor to contact the another side to confirm tenant has been given notice to leave and after the 11/8 it will be an vacant purchase.

Im just hoping the vendors has given the tenant the given time-frame and notice….if not there is not much you can do; as the tenants are protected as much as you are….and if it comes down to a tribunal im afraid the tenants would win if they are force out without their 30 days notice.

For vacant purchase i normally ask my clients to get a copy of the 30 days notice letter well ahead of settlement.

Regards
Michael

The other side would agree 90% of the time…but if you move in early;
1. the “pro-rated” rent and council rate etc needs to be re calculated and re-done
2. Can’t force tenant out

So not sure if it’s worth the hassle JUST to bring settlement 7 days forward.

Regards
Michael