HI all, in an earlier reply, leigh wrote :
Steve and Dave outline a ‘no brainer’ 10 year retirement plan in their Wrap Secrets Revealed Kit which will see you retire on >$100k PA. I’ve also seen similar plans in books elsewhere.
A very basic overview (off the top of my head).
First 5 years
Purchase 1 property a quarter.Second 5 years
Reduce debtThe properties are based on $70k value, 10% deposit (which you will need to save) and positive returns of $50/week each. You will also need to re-invest your returns over the 10 years and continue to save the equivilent 10% deposits each quarter over the second 5 year period to put towards debt reduction.
My advice is to work out what you want to achieve and when you want to achieve it. From there spend a few months investigating different strategies to be a position to decide which strategy/s will best suit your current situation and personal qualities. There are no standard templates to success which will suit everyones personalities and current situations.
Cheers, LeighIs anyone out there following this plan or something like it? How is it going? Is it achievable?
Hi All,
For the bonus chapter just follow this link:https://www.propertyinvesting.com/bonuschapter
See ya!
hi all,
is anyone out there following dave and steves 10 year retirement plan? Or are you following a different strategy? Care to share?anch
Hi anch,
yes, I’m following this plan.
I am just about to get a fourth property. Will let you know….this is where leverage steps in so I’ll keep you all posted…!
cheers-
Minihi mini,
excuse my ignorance, can you explain what you mean by leverage kicking in?thanks
anchhi anch,
“leverage
Definition 1
The degree to which an investor or business is utilizing borrowed money. “(i’m not ‘leveraged’ at all right now)
“Companies that are highly leveraged may be at risk of bankruptcy if they are unable to make payments on their debt; they may also be unable to find new lenders in the future. Leverage is not always bad, however; it can increase the shareholders’ return on their investment and often there are tax advantages associated with borrowing. also called financial leverage.
Definition 2
What the debt/equity ratio measures. “also means “gearing”
So basically….if you have 100K you can either buy 3 X 33K properties for cash. no leverage. Or you can use it as a ten percent deposit and buy 1 million dollars worth of properties. Or a 2o percent deposit and buy 500K worth of properties.
what i did is buy the first properties outright (cash) and renovated two before tenanting them. so hopefully now i not only have the increased equity brought about by renovating them (which I am about to find out exactly how much that is, when I get my valuation results!!!) – which I can hopefully borrow against to a certain percentage using a ‘revolving line of credit’ – and as well I have the cashflow from all the rents to add to my ‘yes i can service a loan thanks lender’ factor.
I want to borrow against the three to get a fourth, and then eventually … ‘repeat formula’. The reason i didn’t get finance first is that I wanted to get my regular documentable income on paper up a bit first, i.e. “serviceability” that the banks look for – important for me, as i am a freelance self-employed person in my work. It did take me a few months to find the deals, buy them and settle, and renovate. some people might thing I could go a bit faster, but i’m going as fast as i care to for now.
I had some really top advice to do it in this order for my particular personal financial situation, so i have. (basically I depreciate my whole life as i work from home, the equipment I own depreciates at a whopping 15 percent PA ….and I have a LOT of gear!!. My accountant is great etc….but it doesn’t make me the cookie cutter mortgage applicant. I’m not like most people with “regular jobs” who can get finance first up easily. Anyway… I’m now at the stage where I’m about to try for finance for the first time ever! doh!
hence the part where leverage kicks in…using the banks money at 7 percent to buy houses returning 15 percent or more….make sense???
PS
Did you know that loads of entire *countries* are highly ‘leveraged’ to the world bank? including the one I’m in and the one next door? and that the world bank is privately owned and was started after WWII to lend countries money to rebuild?
…..what about the US!!! i read the US is in debt to the world bank to the tune of US $18,000 per PERSON.
Basically, a lot of countries could very well go bust one day if the world bank calls in their loans.
in fact, it already has happened to some countries.
just an aside on the subject of leverage.
Hi MiniMogul, Whilst we’re on the subject of the good old USA The US also owes a lot of money to Japan and if Japan called that debt in the US economy would probably crash O/night and they owe UN peace keeping fees that are equivilant to all the other UN peace keeping nations put together.
C2
“Is it true the more you owe the more you grow until the bank steps in?”
C2 oh yes the dreaded yew-ess-aye
“they owe UN peace keeping fees that are equivilant to all the other UN peace keeping nations put together. “
haha, that makes sense, it’s kind of like how if you crashed your last three cars your insurance premium goes up…
so, minimogul,
i guess each person needs to make the best use of the banks money (leverage) without putting themselves in too much danger. A bit of a fine line perhaps.
if I want to follow the plan (getting a +ve property per quarter) should I be buying in many different places or is it OK to stick to a few towns I know well?
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