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Thanks for the replies.
I’m currently working as an employee but my investing is starting to push me to the higher tax bracket. I’m not too worried about the cost of any advice at this stage as I would rather have everything set up right the first time.
Thank you for your comments.
DaveHi FireCaesar,
Well I live in an area in QLD that has just been through the biggest boom we’ve seen so I’ve been very fortunate.
I’ve been just buying well under value homes and selling pretty much straight away to raise a bit of capital for deposits etc for when i need to focus on longer term properties when the market cools as it has done this over the last couple of months.
First house i bought was for $67k and sold it for $80k. Second one was $60k and sold for $115k. Third one I partnered with a friend of mine, bought $140k sold $189k. 4th bought for $130k with none of my own money invested and we will do a bit of a reno and then probably sell it under a lease option with a 5 year option.
As I said the market has been very very kind with median prices more than doubling since i started however now will be the real test to find +cashflow properties for longer term investments.
Best Regards,
Dave MHi,
There are 100% loans out there at fairly competitive rates like the wizard one. They are also releasing a 105% and 110% product sometime however I don’t know any specifics on them.
If you don’t go down that road then perhaps think about what return you are currently getting on your managed fund and what return you will get out of the Investment property.
Remember that leverage is the most powerfull thing there is. With $35k deposit you can get a loan on a 95% lend (if I’ve done my math right)of $700,000!!!
Now how many investment properties can you buy with that sort of money??Lets say you only buy 2 properties that are valued at $250k. Do you think that it is possible to buy these properties at $225k? Well with a bit of negotiation I’m sure it is possible.
Now, have you just made $50k (in equity) for simply using the leverage you get with a 95% loan. If you were to sell those 2 properties now for even $245k each, you will still have made $40k AND you will also get back the original $35K or whatever deposit you put in. Now that is over a 100% cash on cash return. I’m not sure what the returns you would get if you simply kept them as rentals, however i think $40k for doing not much at all is a fantastic return that will alow you to buy even more properties.(if you like you can stick that $35k back into the managed funds and use the money you just made to keep investing)
The Golden rule here is to use the leverage the banks offer and always remember that you make your money when you buy not when you sell.
Now I hope that makes some sort of sence as it is late, however I’m just offering another view point that you may find helpful.
Best of luck with your future investments.
Dave M
Good on you Regan.
Do you numbers and if they add up then just go for it. I turned 21 a few months back and I’m now on my 4th property after 2 years and I can say that it’s a lot of fun seeing your hard earned cash grow all by itself.
Also I’d recomend you set a goal that you want to reach by they time your 21 or something to keep you focused. Mine is to have $1m net worth by 25.
Best of luck and have fun.
DaveHi Mini,
Just a quick question, how do you make your money by simply assigning your interest in a property.Best Regards,
Dave
