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  • Profile photo of YoungInvestorYoungInvestor
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    @younginvestor
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    March 5, 2010 - 10:45 am

    Johan,

    Do you live in Point Cook by any chance?

    Profile photo of YoungInvestorYoungInvestor
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    March 5, 2010 - 10:42 am

    There are many cash flow positive properties in Vic, just not Melbourne.

    And yes, I'm referring to normal, single title, residential property.

    Profile photo of YoungInvestorYoungInvestor
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    March 5, 2010 - 10:37 am

    Hi Sonya,

    The issue for banks is concentration risk.

    If the bank had to sell one house, they will most likely get a price close to market for it, even on a short term marketing plan.

    If they had to sell all 16 units "in one line" as they call it, then the value of each unit would be severely devalued. Hence the lower LVR.

    Profile photo of YoungInvestorYoungInvestor
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    March 5, 2010 - 8:24 am

    Hey all, hope the meeting went well…

    So… can you now please tell me where to buy positive cash flow property?

    Profile photo of YoungInvestorYoungInvestor
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    March 5, 2010 - 8:19 am

    Rich,

    Am I right in assuming that most lenders would want this done on commercial rates also?

    Profile photo of YoungInvestorYoungInvestor
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    March 5, 2010 - 8:12 am

    Hi J.W,

    80% for this type of lend is actually not too bad.

    There is quite a lot of concentration risk for the bank with all the properties being on the same block (despite being on seperate titles).

    The highest I have given out for this type of property is 85%, but it was to long term clients with a proven track record of successful projects.

    Profile photo of YoungInvestorYoungInvestor
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    March 5, 2010 - 8:01 am

    Keiko – In my experience, they will want around $180k-200k over 6 mths I would suggest if the position is mostly unsecured.

    If secured you might be able to return them $100k

    Profile photo of YoungInvestorYoungInvestor
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    March 4, 2010 - 6:26 am

    Haha cute.

    Can you show us the pimpin' house? (and the dodgy fridge)

    Profile photo of YoungInvestorYoungInvestor
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    March 2, 2010 - 11:27 am

    Hi Sonia,

    I did see the article too. I think it was actually Steve McKnight who said that we may adopt the European norm of renting for life.

    The way I see it, the middle class population will shrink, and in 20 years we will have a very defined group of "have's" and "have not's".

    With respect to D's comments, I totally agree that property prices have gone nuts – What I will say though is that there is no way we can continue growing at the same rates we have in the last 6 months for the next 3 years… By the end of next year the cash rate will probably be more like 5.5% which will make a big difference to affordability. There is definitely strong demand, but as the govt opens up more land to increase supply, whilist mortgages become more expensive, there will be a flattening, and maybe even a slight decrease in property prices. 

    Profile photo of YoungInvestorYoungInvestor
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    March 2, 2010 - 11:18 am

    Hi there,

    I might be missing something, but how does 95% reduce the monthly repayment?

    Profile photo of YoungInvestorYoungInvestor
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    March 2, 2010 - 10:23 am

    Yes!

    And in fact the best way to do it is with interest only loans. Make sure you pay all available funds into the offset account rather than reducing interest.

    Profile photo of YoungInvestorYoungInvestor
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    March 2, 2010 - 10:11 am

    G'day Paddy,

    Provided you are disciplined enough and will not spend the money, your investment loan should be interest only, and accompanied by an offset account – There are dozens of articles on this topic throughout the site so I won't go into detail on it, but feel free to have a search around to see the reasons behind.

    The debt % does make a difference to what you can purchase down the track if prices stagnate for a while or even go backwards. It is worth considering what else you may need/want to purchase in the near future, and this adds more weight to reasons behind having an offset account for your spare cash. (ie: redraw for personal purposes against an investment loan can be a pain in the a$$ at tax time).

    Profile photo of YoungInvestorYoungInvestor
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    March 2, 2010 - 10:05 am

    $1.9 mil for that? Would love to know the land size…

    Profile photo of YoungInvestorYoungInvestor
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    March 1, 2010 - 11:20 am

    Hi TVP,

    It is certainly possible to get property with a loan of $180k. You just might need to consider purchasing outside of the area where you live.

    Profile photo of YoungInvestorYoungInvestor
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    March 1, 2010 - 10:11 am

    Hi propertyboy,

    What did it say in the one that you signed though?

    Profile photo of YoungInvestorYoungInvestor
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    March 1, 2010 - 8:44 am

    Hi D,

    Which acctant do you use?

    Happy for you to PM the details if you would prefer not to post publicly.

    Profile photo of YoungInvestorYoungInvestor
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    February 28, 2010 - 10:46 am

    If you intend to buy at auction, make sure you take your cheque book along!

    Also, you need your structure ready to go – Will you buy in a personal name or a trust? If individual, joint or individual?

    Profile photo of YoungInvestorYoungInvestor
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    February 28, 2010 - 10:05 am

    Hi Carlito,

    The reason for this is that it preserves the deductibility of the loan, whilst still reducing the interest.

    This means that if you need to use the offset money for something later on, you don't need to do a re-draw from the loan (which may not be tax deductible if you are using it for personal use).

    Hope this makes sense. Let me know if it doesn't and I will explain further.

    Profile photo of YoungInvestorYoungInvestor
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    February 28, 2010 - 9:31 am

    If less, you will generally be fine.

    If more, you may need to re-do the approval to make sure you can get the little bit extra.

    Profile photo of YoungInvestorYoungInvestor
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    February 28, 2010 - 4:18 am

    Not sure if I can make it this week either – Got a wedding rehearsal :) lol

    What time is it again?

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