G’day everyone!
I’m c[
]urrently a university student who’ll be graduating in july 04′. I’m only woking casually which provides enough income to live. I was just wondering what options i have in terms of building a property portfolio with the limited cashflow i have now. I would love to hear any constructive comments from anyone especially from those that have successfully purchased property in a similar predicament!
Cheers, Mike! []Mike, for you to invest it looks like you are going to need partners. Either parents who are willing to go guarantor (and lend deposits), or money partners who will get the loans and you can split the profits, using your finding the deal as your input.
Cheers
Melmelbear
Correct me if I have misunderstood my guy, but our “bank bloke” said that they will no longer be taking guarentors anymore for any type of loan …
Anyway, Mikey! you need to find some spondullies and I think a smart young thing like you can get really creative … as mel said partners, what about finding a hot deal and selling it to an investor, put your thinking cap on – when you open your mind to the greater possibility the way will be made clear. Profound huh, just made that up. There you go – selling new proverbs.
Good luck pal
Leigh K[
]Carve your own path and lead the way …
Hey ENJOLady
Your bank bloke is probably right, but also wrong[
]. I know a while ago my Dad was going guarantor (we jointly owned a property, but I wanted to take the debt on, not him, and he had to sign as the security holder as well), and had to go see a separate solicitor to have them explain to him what he was doing. That solicitor actually told him that they wouldn’t do it again as they were unhappy that the banks were walking away from their ‘risk’ and passing it onto the solicitor.But I do know people who are still going guarantor, and I think a few have mentioned it on this forum as well. Another way of ‘going guarantor’ is to buy the property jointly (better with the folks than other investors) in a 99/1 split, which enables the 1% to have income taken into account for the loan.
I think it probably comes down to contacting a mortgage broker if your current bank won’t help, and they should be able to find somebody who will as they have so many to choose from.
Cheers
Melinvesting without any cashflow equals risk….borrowing the entire amount to purchase a property on top of that equals tons of risk….
Ok, even if you can get finance either for 100 percent or else
maybe a combination of either a vendor or parent financed deposit and the bank, or you have a property wrapped to you etc, i would strongly recommend having your financial sh*&$t totally together i.e. zero consumer debt (i.e. what’s the point of trying to make 10 percent on an investment if you are simultaneously paying off finance at 11-27 percent interest on money you owe for consumer debt??)a savings record – and a cash deposit to use as a buffer.
i would say enough for three months of repayments in case something goes horribly wrong (anything from an unexpected expense like the hot water cylinder blowing up, leaking roof, losing a tenant, to you losing your job, being unable to work, a family emergency etc).you want to make sure you can sail through the first year of owning your property. if not a few years!
it’s not a given that any fool can make money on any property at any time. and if you don’t understand that you could get burned. the buffer and good financial habits and not over-committing yourself with the borrowing will ensure you don’t. however not having much of an income and borrowing the whole lot – well, i personally wouldn’t be comfortable with that unless I had other properties first AND the yield was stupendous like 20 percent.
all in all, for you at this stage of your life, i’d say start saving for a deposit and wait a while for the predicted price drop…get a second job and work your a$%#ss off for 8 months or so. work an extra 3 nights a week, save $300 bucks a week for 8 months and you’ll have $9600 at least.
then by the time you finish uni in july 04 you’ll have a deposit…might be a good time to aim for. banks love lending to people with incomes…cheers-
miniHi Mikey,
Broz and I are in the same sort of situation, we are both 20 and yet to graduate.
We are both waiting to see what happens with property prices in the next couple of years before we go ahead, we want to wait till we have 2 incomes to eliminate alot of risk, and it would seem wise to wait at your age especially as property prices may drop 10-20% in the next couple of years, while rents will prob slowly rise.
Our approach is a little different from Steves, we don’t want it to take up lots of our time, so we want to pay houses off as fast as possible, you can see the outlines of our plan in my spreadsheet, or in the “A different approach” topic,
Regards
Fudge111[
]Hi
These days lenders don’t like letting anyone guarrantee a loan unless they are on title. A better way of doing it would be for a parent or someone to use a LOC and lend you the money.Another strategy, if you don;t have much money you could try and lease option a property form someone and then on lease option it at a higher rent with a higher option fee. ie a sandwich lease option. easier said than done tho!
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Mikey,
Since you mention that you are looking for a portfolio I am guessing that you will be applying for an investment loan. If this is the case then you would normally be able to borrow around 90% of the value of the property, if you were using the future income to service the loan. If the purchase was owner occupied then this would be a different story and you would be able to borrow a higher percentage, though you would not be able to use the future income in the serviceability.Mark
]urrently a university student who’ll be graduating in july 04′. I’m only woking casually which provides enough income to live. I was just wondering what options i have in terms of building a property portfolio with the limited cashflow i have now. I would love to hear any constructive comments from anyone especially from those that have successfully purchased property in a similar predicament!
]
]. I know a while ago my Dad was going guarantor (we jointly owned a property, but I wanted to take the debt on, not him, and he had to sign as the security holder as well), and had to go see a separate solicitor to have them explain to him what he was doing. That solicitor actually told him that they wouldn’t do it again as they were unhappy that the banks were walking away from their ‘risk’ and passing it onto the solicitor.
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