I am asset rich but cash poor.
I currently have over $300-350k in assets (PPOR freehold), but only $10k more or less in cash.
My strategy in PI is to buy & hold +ve cash flow IP’s using a LOC on my PPOR. This is to finance the deposit, buying costs (stamp duty, conveyancing) & any reno costs to get an IP up to scratch & create extra equity (eg paint, carport etc.).
To the experienced IP’s is this a wise move to get my property portfolio up & running?
Please note that I intend to factor in a 1-2% increase on my current loan interest rates in my calculations. Just to make sure I don’t go negative on the deals as rates increase.
Any thoughts or advice would be appreciated before I “jump out of the frying & into the fire”.
After reading Richard Branson’s autobiography, I discovered he used the banks money a lot to get most of his businesses off the ground. But only after he was convinced that they would turn a profit soon & he would be able to repay the debt.
Cheers,
David Paxton
“You Only Live Twice”David
I don’t think there really is any other way other than to borrow money.
Your strategy sounds quite conservative (in factoring in your payments based on higher rates[
]) and so I don’t see a huge problem for you in investing in this manner.Personally, if I have any loans, I will never have ‘spare cash’ as it will be working to reduce my interest bill in one way or the other (offset or LOC), but ready to use to fund the next purchase.
Cheers
Mel
]) and so I don’t see a huge problem for you in investing in this manner.You must be logged in to reply to this topic. If you don't have an account, you can register here.
