Hi all.Something I do not yet understand is how do you take the step from having one cashflow positive property to having two.My fiancee and I have slowly begun looking for our first property after spending plenty of hours educating ourselves(and continue doing so)and the past 10 months saving money for our deposit.We do not have other equity in a house,this will be our 1st morgage and we are happy to continue renting ourselves to enable us to implement this cashflow positive strategy.We dont need to be millionaires,we just want to build a portfolio of cashflow positive properties providing ourselves with a comfortable living and allowing us to continue with our other business interests.Is it a matter of saving for a 2nd deposit after we have purchased our 1st property?Do we build up equity in our 1st property and use that to finance the 2nd purchase?How do you create that flow on effect where by you can continue to buy the next property?We appreciate any advice or comments. Regards
Hi Gavan,
You mentioned you dont want to be millionaires, but want to build up a portfolio of cashflow properties – approximately how many are you looking to acquire by when? The reason I ask is because when it comes to financing your deposit, if you are not looking to acquire several properties over a short amount of time, then either saving up yourself for your second deposit or using the growing (presumably) equity of your first property are both common approaches. Naturally these approaches take time, which is why if you are looking at aquiring more properties quickly, you’ll want to investigate more creative methods, such as the ‘wrapping’ strategy. As I have yet to use this strategy myself I’m not in any position to explain it in detail, however there are plenty of people on the forum (such as Steve) who have a great deal of experience and will be able to explain it to you
Regards,
Brett []“Even if you’re on the right track you’ll get run over if you just sit there.”
Hey Gavan,
Mate you have a few options open to you. You can take the slow and steady road and save for further deposits or revalue the current property and use the equity. Both these options are sound and will get you there. I personally think you are very lucky in that you have had to get creative early. Some people (me included) are supposedly “lucky” in that we have sufficient deposits for ultiple properties and therefore have not had to get very creative. To be honest I believe the sooner you run out of money the better……I here you thinking, “Is this guy mad???” Well yes but that is another story…..
Why the sooner the better. Well it makes you go creative early. Once you have learnt the skill of doing a no money down deal then how money properties are you limited to ?? Think about it. No (or very low) money down means that you have a virtually unlimited potential for acquiring properties. The person who has deposits and gets stuck in the need for deposits ( I was) doesn’t look outside the square. I now try and do no money down deals first then go the traditional method second. Now how to do this. Well read the book “Nothing Down in the nineties” bu Robert G Allen. But in a simple 20 second blurb…..
Seek the vendors who will leave money in the deal sufficient for the deposit on the mortgage. You can ask them to vendor finance you. Some people ask for a cash back at settlement (check this out with your solicitor). Meaning that the vendor gives them 20% (or whatever) at settlement therfore leading to an effective no money down.
You could seek to take a lease option over the property from the seller. I guess the long and short of it is there are many ways to do these transactions and you are lucky (believe it or not) that you have got here now. If (and I mean if) you have the tenacity to find a solution then you have unlocked a very big door. There are potentially no deals that are to big.Be encouraged Gavan you stand on the threshold of really discovering the success that people like Burley, Kiyosaki, Buffet, and even McKnight have discovered before you. When you only use OPM (other peoples money) then you are never limited by the deals you can do (as long as they are cash positive).
Hope this helps.
Enjoy
AD [:0)]“Carpe diem, quam minimum credula postero.”
Lat., “Seize the day, put no trust in tomorrow.”
-Horace, OdesAD
I would like to thank you for the advice you give, I have read much of your advice in the past month and it is always, real, honest thoughful and practical, you know no bullshit![
]With regards to this immediate advice above, I think from a newbie point of view that it has probably given me the greatest insite into what could lay ahead.
I had heard around here … no money down … OPM … get creative … but they were just words. You really just painted a picture – in your crazy way[:0)].(LOL)
So thank you this was a defining moment, everyone is about ready to vomit, but thank you for expanding my investment strategy outlook.
I was also wondering if there are other books you’d reccomend that are similar to nothing down in the 90’s.
Cheers
Leigh K[]“If you will take on your self-doubt and laziness, you will find the door to your freedom.”
-Robert Kiyosaki
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