They all need to be re-structured properly. Did you originally deal with a banker or broker?

Regards

Shahin

Will it be easy to finance? – Depending on the LVR and title. 3 dwellings on one title is fine with most lenders however each lender will have an LVR threshold that they will lend to so its important you choose a lender that goes to the LVR ceiling that you need it to go to. As an example, ANZ only goes to 70% on multi dwellings on a single title. 

Generally speaking yes second dwellings do have a positive impact but it depends on the area. Before you subdivide make sure you speak to at least 2 agents and gen an idea of resale values for both the front house and the back. Also determine rental values so you have a back up plan.

The biggest pitfall of the adding a second dwelling is council and construction costs. These are massive variables. Make sure you do your research on these 2 things before purchasing.

Regards

Shahin

Ok so you have been cross securitised. Let's park that for the time being. Do you remember how much LMI you originally paid?

If the loans were set up correctly and based on today's figure – you would be paying around $12k in LMI.

The thing is that in these scenarios – many combine the two and they paid LMI on the higher loan amount and LVR instead of paying LMI on each loan split and LVR which in turn means a lower premium. 

Its too late to change now but you need to be wary of this when you are purchasing further IP's. 

Regards

Shahin

Absolutely. That's the idea – to make equity and re-invest that equity. There are different ways to create CG which in turn defines your strategy. Renovation is one but you need to ensure you do not overpay as there may be other investors with the same idea which often results in people overpaying for the property.

Regards

Shahin

Let's clarify – no one is saying don't buy negatively geared property. The message is don't buy negatively geared property that is not going to be superseded by what you will get back in CG during 'x' period of time.

So let's use one simple strategy/example – you can pick up a dump in Rozelle and pay below market, renovate it and sell it for a profit. It will cost you $20k during the 2 years to hold it but after all the costs of buying and selling you make a profit of $100k. This is where negative gearing is just another 'cost'. 

However if your idea is to just buy and have it negatively geared for the next 10 years with a cost of $100k but the CG will only be $110k then the question is whether making $10k profit in 10 years was a wise purchase.

Regards

Shahin

You will not find anything 10km from Sydney which is Positively Geared unless its a development site and you develop the property. This option of course requires serious capital. 

What's your IP strategy? This should in many ways dictate what to buy and thus where to buy.

Regards

Shahin

Yes – its best to have your finance pre approved prior to you starting to looking for properties. That way you now exactly how much you can borrow. Make sure that your banker or broker gets a credit assessed pre-approval instead of a system pre-approval. Most banks are now offering this. 

Also when you are applying for finance you need to ensure you apply for the maximum rather than what you think you will buy in case you may need to go a little higher than what you had planned. That way you know your finance is guaranteed.

Also make sure that your loans are setup/structured correctly.

Regards

Shahin

Get a good conveyancer – especially one that is sharp and quick to respond. For example, if you find a good property then you want the conveyancer to look at the COS straight away and order the Building and Pest Inspection immediately. Finance Broker does not need to be local but if you prefer the face to face interaction and someone that also has knowledge of the local area then it helps. Same story with the Finance Broker – you need them to be responsive and quick amongst many other things.

Buyers Agents are worth the money but like many professions – there are many poor BA's. 

You should also get a good Building and Pest Inspector. The last thing you want is to think you have landed yourself a bargain only to find out that one of the piers are sinking and the house is snapping in half. They cost $600 on average BUT make sure you get a good one and not a cheap one. It is a necessity to get one done before the cooling off period. Some even get it done before they sign the contract (it really depends on the situation).

Many brokers will have access to either APM, RP Data or Residex Reports – those reports are very handy to get an idea of recent sales. 

Regards

Shahin

It is a huge risk to go overseas and do this type of work. Huge cudos to him.

Regards

Shahin

Negative gearing is a benefit and not the sole reason you invest in property. Remember that at the end of the day negative gearing means that you are losing money.

Have you thought about CG? Have you come up with a IP strategy? Have you thought of medium to long term?

Regards

Shahin