hellooo
Meeting with a buyers agent next week and took a turn at setting my investment goals. Ive ordered a tonne of books but due to SARS containers are used up clearing the backlog and the’re not here yet.
Please be gentle but do critically assess my objectives as this is my first launch into investing (outside my PPOR which will be paid off in 1.5yrs after final construction) and I dont want the agent ‘dissing’ me from the first meeting (cheeky mood [}
]):Financial goal: Retire at Age 40 (32 now)
Property portfolio: 30+ properties with substantial equity
Assumptions:
* Business will contribute $100K per year for 2 years only towards deposits
* Finance not an issue
* All property purchases will have up to 20% depositProperty Choices: Inner city, houses rather than apartments, brick (no weatherboard), close to amens & transport
Phase one:
* Cash flow positive, cap growth short term (5 years)
* Prices at around $200-$300K mark?
* Trade up for improved cash flow to replace business income and then sustainable income
* Business Structure could be relieved as primary asset income source for the individual
* PPOR – nil debt within next 2 yearsPhase two:
* Can achieve reasonable cash flow if net effect significantly reduces current business tax problem but capital growth is strong to achieve
Financial Goal.Phase three:
* Cash flow positive, substantial cap gains growth long term (10 years)
* Superannuation scheme (retire at age 40, no current super)
* Passive income of a min of $5000 per week.Whatcha think?[
]Jars
By the way, I NEED A NEW FINANCE BROKER. Enquire within.
Thanks
Jars
Hi Jars
Re: ASIC search on David McRae – not sure why it came up blank – you’ll have to ask him. Be sure to let him know (Stuart Wemyss – ProSolution) I referred you. He’s a nice guy and knows his stuff. He should be able to add value.
With respect to the above… I’m not sure I understand. Is your basic objective to purchase capital growth properties, complete minor improvements to increase rental income and pay down debt to ensure they are cash flow positive?
If that’s the case then is sound good however consider:
– effective structure (do you have a partner to share taxable income with, estate planning issue, etc.)
– Likely capital growth over next 10 years.
– Ability to be able to “buy well” and improve to create instant equity.I know these all sound a bit vague but its a hard question to answer.
How about diversifying your strategy. Perhaps you could do a couple of different things:
– Buy and hold in inner-city for capital growth (as above).
– Buy-reno-sell to create instant equity.
– Buy cash flow positive property in an area that you speculate will increase in value significantly (therefore aiming for high capital growth and yield).
– Commercial property.That way if the market falls in one area then your strategy does not suffer too much.
Anyway I’m just thinking out loud (or typing out loud…whatever).
Finance broker – where do I need to apply? Feel free to check out my website at http://www.prosolution.com.au.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Jars,
sounds like a plan! Just be careful not to confuse cashflow positive with positively geared.
I personally feel that you will need to mix both from what you are saying.
Positively geared (ie you loose money on the property to reduce tax, ending up with a higher after tax income), to reduce your tax bill and positive cashflow to provide more income, thus prevent you from maxing out you credit, also there will come a point where pos geared properties alone will reduce your after tax income (unless you want to eat your equity, not a good idea!) thus reducing your serviceability and lifestyle.
Don’t be put off positive cashflow properties by people who say that they get lower cap gains, because to get one you have to buy in hicksville towns that are going nowhere. Because it’s not true, I’m fighting to save one of the two deals that I’ve got going at the moment, because the vendor wants to pull out, because in the 8 weeks since signing the contract the property value has increased by about 50%. Even though the area has had a major industry collapse, in the last month.
Goes to show high cap gains aren’t just for the capital cities.Sorry got off the topic a bit, my point was mix up your portfilio a bit to maxamise your ability to grow it.
Good luck,
Scott S
“Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
-anonOk. Firsly, 90 people read it, 2 replies – hmmm. Perhaps people discriminate against ducks?
Right.
Hi Stuart, yes I know your site well and will be in touch. No partner (typical of a career-minded late bloomer but its all under a discretionary trust tax structure??). I like your ideas re spreading risks.
Scott, I think Im going to have to read that a few times and chat again to the accountant. Im a tad confused. I very much appreciate your feedback though and youre spot on – I got them confused, you got me on that – must learn more, faster, better!
Jars
whoa! scott, what suburb did u buy in?
are u in vic?Jars,
Question… ??
What is your ultimate goal?
Retire by 40 is great, but for what purpose? What do you want to do after 40? If you live to 90ish, that’s a lot of golf! What is driving you to achieve this goal?
I can’t fault your approach, and theres much to learn so the journey should be fun, but what’s at the end?
As a suggestion, if your purpose beyond the goal is clear, and if it drives you to be there, then your view of the world will highlight the things around you that will make your journey easier and obsticles appear smaller.
This sort of clarity could just push you over some of the bigger hurdles should you be confornted by them.
All the best
Brendan
Hi Brendan
Retire at 40 means financially free and stress free. Stress is a big issue for me and I just want the stress to end. After 40, its freedom of choice. I think it would take till Im 90 to learn golf and play it well enough.
Will advise re the buyers agents soon
Jars
Hi Jars,
Know what you mean about stress and financial freedom! [xx(]
Are you looking to have these properties in a trust or all under your name? As this will be your source of income have you considered tax issues?
Hope this does not sound insulting as this is my road map also, so any insight would be of interest to me.
Cheers
Adam
[8D]Sorry Jars, I hope I wasn’t too confusing![
]Hi Fullout no they are in central QLD and interstate investors are just pushing the prices up at a stupid rate, I just hope that there are more deals like this in the place before it settles down. I do think that these prices are a little inflated by the demand, but demand still seems strong when all signs would to me now say stay away!
Cheers
Scott S
P.S. i’m sure nobody’s got any thing against black ducks![]“Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
-anonGatbe7
Its all under a discretionary trust – all set up, firing to go! I has also thought about a separate trust for every property, such that one never encroaches on the other. That could be a tad overboard.
Jars
Ok Stuart, Ive emailed you to have a chat. Contact me when you get the opp. jars
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