I would like to ask a question about the accumulation of property. Steve has acquired 130 properties using the income to purchase further properties. What about the asset itself? The lender will lend on a combination of LVR and income. If the valuation is done by a “conservative” valuer, do you go to another lender? Or does that put a stop to your lending power so you stop until you get some cash equity by paying down the loan as soon as possible. How many properties can you buy????
Thanks
Spider
Spider
I think to know how Steve did it, you probably have to go and see his seminars, and take notes, and still probably say ‘Oh’, but that won’t quite work for me, so I’ll have to add/subtract this, and see how I go.
I have found that some banks (managers) will not order a valuation if you are putting a 20% deposit and paying closing costs. This enables the loan to go through no probs as long as servicability is no issue.
The banks will take into account servicability, and if that doesn’t stack up, they won’t lend you anymore money no matter how much you put in as deposit. At this point, go to another bank/broker who can shop around to find a bank who will lend.
You could also spread the borrowing across ‘entities’ which will mean that the banks don’t look at every one to see how much they have borrowed, so can create different levels of borrowing to you personally.
Cheers
MelHi,
There is no magic formula really…
1. We worked as accountants to save up the capital to start investing.
2. Since we borrowed 80%, we needed to find 20% deposits.
3. We began with B&H, but soon realised that it would eat a lot of our capital, so we switched to the wrap strategy where we only needed bewteen $5k and $10k.
4. We sold some of our B&H property that had appreciated to access profits to buy more wraps. Later our wraps cashed us out and we used the profits to buy back into to B&H property.
5. All the while Dave worked as an accountant. I ‘sold’ information (forst) at wealthtipsonline and here at propertyinvesting.com. All the money we made went to buying property.
6. In the meantime I lived off $400 a month my wife gave me from her salary and Dave did likewise.
…oh, plus we both won lotto… [
]Have a great day,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Steve, my comment was more related to how the banks kept lending you money.
It seems that a lot of investors – me included at the moment, but I’m shopping for alternatives – get stopped by the banks as being rent reliant, not enough ‘income’ etc to qualify for the loans.
Cheers
MelHi Mel,
That’s why Dave and I continued with the accounting business and set up other businesses too.
Banks don’t want low-risk, they want no-risk. Strange isn’t it that they had crazy lending practices in the high rise market, yet didn’t budge much with traditional investing.
If worst comes to worse, do low-doc loans where they just ask for an income declaration and the source doesn’t matter.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Steve,
Many Thanks. I just needed to get my head around the borrowing aspect of accumulation. You might be interested in the story of three short term wraps I have in Brisbane. In anticipation of the Brisbane market surging I purchased three properties in Brisbane 2 years ago (Caseldine, Narangba and Highgate Hill). I sought out 3 future buyers by advertising in the local paper. basically, I factored in a capital gain of 5percent per year, the buyer paid all the outgoings (except mortgage) and I got a 3 year interest only loan with Colonial. I gave the buyer a three year option to purchase. The higher the risk the higher the non refundable deposit (unless they took up the option). One property the buyer had been bankrupt so I asked for a $15K deposit which I pumped into more property. To make a long story longer 2 of the properties have settled early (of course the buyer pays the breakout fees) and because I borrowed more than 80percent I get a proportion of the mortgage insurance back. A win win for everyone. Also the earlier the settlement the Cash on cash is enhanced dramatically.Mate, I loved your book
Spider
dam….
So it was you Steve, that won the $30 million lotto prize….
cheers
s.i.sThanks Mel
– Spider…cough, splutter, curse as Steve spills his cocktail all over the pool sunlounge.
Shhhh… people think I actually own property. Nah, that’s just a sidetrack… the smart money is in bluegums [
] and those scratchy lotto things.[
]Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
]
] and those scratchy lotto things.
]You must be logged in to reply to this topic. If you don't have an account, you can register here.
