SERVICEABILITY

Can I adopt you?!

Go for it, but see a broker about the right type of loans for your plans. Yes as you say if the loans for IP that you continue to take out are self-servicing and obviously there’s enough savings/equity coming in to form deposit components for each new loan then there really isn’t much of a ceiling.

Do you know much about structures for asset protection – namely trusts with companies as trustees? Talk to an accountant or look through some relevant posts, lots of contributors have put down heaps of good points about them here.

Happy investing
[]
Mel

QUICK SOMEONE ADOPT ME TOO!!!

No I’m serious! [] Any thoughts would be greatly appreciated.

Here’s my story…

The Story
Young fella started working for the first time in his life and found that the more you start making the more you can borrow. I was given approval for a $4000 Visa card while I was at uni with no income except Austudy. Eventually I got a couple more CC’s and did my best to rack up quite a hefty total. GROAN! I got into a decent job and am now making $38K before tax. I was finished uni now so I consolidated my $10500 CC debt into a new personal loan at 10.65% Much better.

With the job came the new car and the dealer finance to go with it. 14.25% I can hear you all groaning disapprovingly at me but hey.

So now I am at the stage where I want to get into this positive gearing thing, read the book in one day. I actually spent two hours on the seat outside the bookshop and ploughed through the first half of the book right then and there.

I have a major goal now. To work because I want to, not because I have to.

Here’s the big question…How do I get started? Sure I could ask a financial planner but how many did you guys know when you were 24? Who’s the real deal and who’s the slimey commission maker?

I figured the best people to ask would be the ones out there doing it. You guys (guys being a generic term only, sorry ladies no offence) have got the ball rolling already. Anyone who could glean me some pearls of wisdom??

Enough from me. Below is my rough finanial picture. I thank you all in advance and look forward to become a valuble part of this group.

The Facts

Assets:
$17000 – 2001 Nissan Pulsar
$1000 – 1985 Ford Laser
$1500 – Computer

Liabilities:
$17500 – Car Loan @ 14.25%
$8000 – Debt Consolidation Loan @ 10.65%
$25000 – HECS Debt Indexed Annually
$6000 – Supplement Loan (Through Centrelink)

Income
$38000 – Gross Wages

Expenditure
$452/month – Car Loan Repayments
$336/month – Debt Consolidation Repayments
$100/month – Mobile Phone Bill

Remaining income is quickly spent.

I have included some detail in the hope someone might want to stick their teeth into my case and help me out.

Look forward to hearing from anyone and working towards my goal.

Gidday mitch,
crashy is spot on. Reduce the debt as fast as you can. Minimise the use of your credit cards. Once paid down then have their limit reduced to absolute necessity for emergencies. The second car would be costing more in rego, fuel etc than what you have valued it at, or maybe you could quit the pulsar and keep the ford. Have a lifestyle change and go for the second job to reduce your debts as fast as possible. A bit of a slog now will help see you benefit in the long run.
Stay focused on the end result and it will happen sooner than you think.
Spider

Hi All,

Im a Newbie to this site.

I bought Steves book yesterday “From 0 to 130 properties in 3.5 years”. And a property lingo book to get started. Im eager to get my teeth into the book and investment.

Before knowing how much you can make positively gearing through leasing this is our history in a nutshell…..*room fades to black…[]

We purchased a house (Melbourne) for $140K around 2000, we sold it this year for $250K. In this time we also bought a vacant 20 acres block on land in the country for $90K, then sold it 6 months later “before we knew about Capital Gains Tax !!!!” for $145K.

We paid the solicitors and the Initial Loans.
We are now in this situation:

We have $140K cash to play with ..”all ours”
– no loans
– 2 cars (both paid in full)
– I earn $60K gross per year, as a programmer in the IT industry.
– we are renting back our house we sold (6mths for $5,000 paid up front.) so we can organise ourselves for investing.
– 1 wife, 2 kids, 6 cats, 3 dogs, 2 mice…. []

Our long term goal is to be financially independant and live in a nice Farmlet in the country, not working and enjoying the stress free life.

Im mostly through the property lingo book (finish it tonight).. then on to Steves book.

Im thinking I would like to use the “Buy and Hold” method, so we can get an ongoing income, more when the property is paid, and then have the option to sell the property for a profit which could be used to buy more property, etc….

In this situation, where we would like to start generating income and also find our family home to live in. What would be our next step ?

Do we purchase our home first, move in (we need to vacate by December 2003). Then purchase our first investment property to lease to a tenant.

Im growing addicted to this site, keep up the excellent work!!

Regards,
Arty

[][]

It surprises me how a number of people have written in loaded with non income producing debts, personal loans etc. wanting to jump into property and no deposit down and thus even more debt.
Unfortunately guys, there is no magic, but commitment to earn a salary, reduce personal debt ASAP, cut spending to bare minimum.
It basically takes a lot of seldiscipline, its the same as wanting to loose weight or get fit, you need to work at it and not expect instant gratification.
You may have to wait a few months, even a year or two, live modestly and save!
Even now, 8 properties later, we still live modestly, I hardly use my mobile etc.
Our only majorpersonal expense, he’s sending us broke!, is our teenage son and private school fees, but we don’t mind.
The vast majority of our income goes back to debt reduction or further investments, but we made a lot of mistakes along the way initially.
I think we are well on the way now, but there is no instant riches or gratification, only a slow hard work pathway.
I used to think it would happen straight away, but you need to learn to be patient.
I strongly suggest you attend Ed Burtons seminar in November in Melb,excellent value for a weekend, its all about assett protection, cash pos properties etc.
Read as many books as you can and educate yourself in the meantime.
Unfortunately we didn’t start out with the knowledge we have now and made some financially disastrous mistakes, we are now catching up nicely. You are very fortunate to educate yourself early on and have the right mindset at your age, so you are on the way.