WHAT TO DO

It’s getting late, I’m seeing lots of little zero’s …… good for you Mr Gus. Frankly I’d do a bit of both – buy some cash flow crappy/capital growth huge ones outright and buy some cash flow +ve/cap growth low ones, trying to keep the balance solidly income producing.

Keep us up to date, this should be interesting!!

Cheers,
Mel

Hi there,

Is that $1.05 million? Wow – well it depends on your attitude toward debt and how leveraged you want to be – if you used it for multiple property deposits then you certainly have the opportunity to make huge gains, but perhaps you could look at going for a 60 or 70% lvr on some higher capital growth properties (which might be +cf at this lvr too).

Or you could wrap and probably have enough to cover – what… 20 or 30 houses without any problem?

-Nick

Sorry Freshstart. We chat about investing but we don’t cross that line. If you wish to advertise your needs check with [email protected] first and clear it with them. Sorry to intercede but the rules are clear when you join up.

Enjoy
AD [:0)]
(Andrew)

“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”

Maximus, you have it messed up. The $1,050,000
is a LOC, that means that whether borrowing against
the LOC or the new property interest will still
be payable.

It doesn’t matter if Gus places a 100% deposit
funded by the LOC, a property yielding less than
the interest rate will be cashflow -ve.

It’s all borrowed money.

andy

It’s a good point – maybe a short-term/higher-return development would be better given that LOC interest rates are high for long term lends, but v v cheap for short term.

[]
Mel

Well done, Diamond Gus – my suggestion would be to consider purchasing properties that could be reno’ed, or are simply at a discount. Anything that could give Capital Growth instantly by throwing cash at it (an LOC is as good as cash isn’t it?)

Use the LOC to fund them completely, reno them, then refinance after they have been spruced up. Or, if buying at a discount, settle them, do “what’s required” (paint, new kitchen, etc) then refinance – without any Bank clauses re 80% of purchase price holding you back. Banks do penalise us in this way, so keeping them out of the settlement loop should give you more room to move.

At this time, you also choose the best finance out there, and refinance to suit your purposes (70%, 80% or even 90%). A lot depends on just what and where the property is. And depends on YOUR requirements too (do you want +ve cashflow, or growth, or both? and in what proportions)

After refinancing, you repay your LOC, then do it all again (in fact, with over $1m to play with, you could be doing several at once)

Just having access to such a huge chunk of cash should ease your way into many different scenario’s. Half your luck …[]

Benny

Hi Diamond Gus,[][?]
You need to get back to basics. To start with identify your goals. What do you want in the short, medium and long term? Which is more important to you, tax reduction, asset growth or return on investment ie cash flow? Are you an aggressive or careful investor?
After these questions are answered then strategies can be worked out for you.
Regards,

Bryce Inglis
[email protected]
http://www.ipal.com.au

quote”You need to get back to basics. To start with identify your goals. What do you want in the short, medium and long term? Which is more important to you, tax reduction, asset growth or return on investment ie cash flow? Are you an aggressive or careful investor?
After these questions are answered then strategies can be worked out for you.”

Well done Bruce – glad someone hasn;t been dazzled by numbers.