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Thanks :)
Always like what donald trump did when he was younger – Buy an old hotel and renovate, but lease to permanent tennants. Bottom floor offices and top residence.
Was back here to get my profile pic and saw my old post.
I still remember how excited & proud my mum was to see her son in a magazine – of course she showed everyone.
Ive hit 50+ properties this year but more in brisbane & sydney suburbian areas – its very unlikley will buy any more in regional towns only beacause i dont need to anymore.
In last 24 months I’ve been focusing on dual dwellings in the form of auxillary units which have been very good income & equity wise.
Personally I would pay 20% deposit on all properties either in equity or cash.
When you have 2 or 3 properties it is ok to cross them, just make sure the loan has a switching facility so when your loan security goes up in value you can do a partial discharge and release the second security.
Look for properties that you can immediately add value eg 1 bed unit converted to 2 bed unit or 3 bed house with convertable garage into a bedroom or simply do a reno.
Dont stress too much about having a 80% LVR to start with, over time this will automatically decrease.
I would keep a minimum of $20k aside when starting, once you have 5 or more increase your buffer to $50k and dont use it for investing.
Brisbane market is moving at the moment so you will get some good auto equity.
Always think ahead – after your first purchase ask yourself what the next step will be. If you cant move forward then your stuck, you always what to be in a position to move forward.
Get interest only for 2-5 years, this will allow you rents to increase over that time to manage P&I easily without affecting your lifestyle.
And most important you need a goal, place a monetary figure on it and work out how many properties to achieve that. My first goal was FREEDOM ;)
UPDATE: Rams has taken 80% rental income.
The changes in response to APRA have been rolling on for a number of months now – I originally wrote an article here: http://www.precisionfunding.com.au/apra-the-evolving-lending-climate-for-investors-challenges-and-opportunities/
In short borrowing capacity has reduced for all, maximum LVR’s for a large numbers of lenders reduced or restricted and interest rates increased for investors.
Certainly not the end of the world, but more than ever points of the need for a strategically planned finance structure.Thanks. Ive tried to avoid smaller lenders but it looks like the best option short term until the big 4 change their policies again.
I bought 4 units there end of 2013. Even though the values have only increased by ~$30,000 each, the rents on each have increased by $55 p/w each.
Regarding growth corridor. It is a smaller one than Gold coast to Brisbane corridor but still has a ton of future potential.
Pretty much any houses around low $200k will do well in next 18months.
Im buying anything in that price range without too much consideration for equity growth as it will be automatic for the short term.
South : Limit beenliegh
North: Limit Caboolture
East: anywhere (except eastern islands)
West: Limit Carol parkIf you have 20% deposit and stay away from Mortgage insurance you can. But considering its student accommodation you may need 30% deposit.Also would be a big help if its for both students and residents like Shafston mansions in Brisbane
I use Commonwealth bank to finance these in the beginning.
Studios can never compete with a 2 bed unit in capital, but has its benefits in extra income returns. So its best to only buy one or two.
Freckle wrote:He's leveraged to the gills with circumspect valuations. Darryls in that very dangerous phase where he's waiting for equity growth to reduce leverage to a point that is sustainable long term. His $200k earner is gross TO and will in the main be consumed by servicing.It's the most adverse risk profile you can have as a PI. The market moves against you in even a small way and you can be gone faster than a speeding bullet.
This stuff isn't rocket science. Most people are risk averse but when you're risking OPM things take on a different perspective.
Most of what you said is true.
Ive protected myself from interest fluctuation by fixing the loan for 2-5 years, if anything drastic happens then i can sell.
My current LVR is around 70% on all properties,
My current interest repayments are ~$55,000 p/a fixed for 2-5years, most of the houses i bought in broken hill were around 30k. When i did the original plan – for every $130k in income i would have $40k in expenses, and just worked back from that.
Early 2014 im buying unencumbered property for more cash flow and reducing my LVR to 60%. As Steve said, theres two phases – acquisition and consolidation. I think there will always be some loans against the properties, my ideal LVR is 20%.
You cant ask for everything when kick starting a company from scratch, however I was more scared of being someone elses puppet working for someone else. In the end i would do all this again not to EVER have a job again.
ryan mclean wrote:May I just ask…what difference does it make?I thought you do't get control over who the valuer is anyway? It is up to the bank to choose their own valuer
Well commonwealth bank allow customers to do their own vals, i had a property valued in September in Milton QLD for $140k via commonwealth bank valuation request.
Only 2 weeks ago I used Valex to revalue the property, the valuer phoned me and asked the purpose for the val, i said it was for stamp duty AND loan purposes. The value came in at $180k. Same valuer CBRE, same property condition. Cost me $220 but i got $40k equity which was the real value in the first place.
Valuers are scared of the bank, but even more scared of the government undervaluing property for stamp duty purposes.
yellina wrote:Dear WestnBlue,I am Hari Yellina Property Investor.
I had privilege to get ANZ Valuation reports, which are done in house. They use APM Home price guide. I am not sure about commbank.
Thank you
Hari Yellina
Property Investor.
Cool. Just want to suss them out.
Do they allow customers to do thier own valuations through APM?
RamkiSydney wrote:Thanks westnblue, the property I am looking at in Alderley is about 800 sqm land with two road facing in about high 500's. Do you think its an okay deal?Thats normal price aka retail for alderley, the suburb is very diverse. Only way i would personally buy that is if it has subdivision potential as its a blue chip area.
* try and stay away from that evil shopping center, all the back streets are very good (attached location of shopping area) when you see it youll understand
RamkiSydney wrote:Hi Guys,I am new to Brisbane property market and visiting the city this weekend to visit some properties in Alderley, Coopers Plains & Chermside. It would be great if you guys can give some information about these suburbs.
Alderley is considered a good suburb however the local shops there are disintegrating, slowly store owners are closing up – almost half of them.
Chermside is the best of the three you have chermside shopping center close by and a main rd straight to the city including clem7.
Coopers plains is industrial area, very run down.
Jamie M wrote:Which lender was this?Cheers
Jamie
Commonwealth bank. Its really a lottery who you get in credit in Sydney. Problems only happened when properties where crossed.
I do have a plan in place to resolve all this. Just want this one to settle first.
This was the reason to do cash out instead of cross collateralizing, both seem to have pitfalls. Although crossing properties is the worst option.
its true, this is the last time im crossing any property – its been a nightmare for me and the bank manager.
OK i understand now.
What if i had an unencumbered property and the value was 100k and drew out 80k against it. Would it still be in the same position – aka the entire loan interest not being tax deductible?
Yes just picked a 2bed unit up in Southport for $160k rent at $250 p/w tenants been there for 7 years. Close to beach.
Im pretty much buying anything with 2bed Under $180k. Im hoping to get 3 more by may next year. Gold coast is in a very good position for capital growth in the next 24 months – and thats automatic equity.
I cant see your angle…. Im drawing equity to pay for more property for the SAME company.
And if you say thats wrong, well cross collateralizing is the same thing just more risky. How many people have drawn equity to go and buy more property – Nearly everyone I know.
Already have, accountant said theres no problem, just a but more work for him. The properties are in a company/trust and as long as the cashout is used for other company properties theres no harm.