Starting out

The best advice I can give is to do SOMETHING.
Go and see some RE agents. Talk to your bank/broker about finance so you know what you can afford. Find out how much places are renting for and selling for. Think outside the proverbial square.

There are lots of other things you can do, but you must do something and get the ball rolling.

James

Jump in with both feet.

If you have to pay mortgage insurance, do it, if you have to buy the worst house in the suburb, do it etc.

Use the net to find an area that you can afford and meets your required property profile and talk to a number of banks, brokers etc. as they all have different criteria and you will find someone who will supply you some OPM.

Go for it

U got the ball rolling already, keep learning from books and the forum, maybe even attend Steve’s seminar in April, then build up the confidence and build up a network and then start buying.

Jumping in both feet 1st right at the start can be dangerous.

Regards Bear

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G`day Elwood,if you are renting, buy your own home!
If you are buying your own home,get a valuation done and see what equity you have.Banks love real estate,and will lend against it.If you have equity in your house,speak to your bank manager about R.E. investment. He will be able to tell you if you can proceed.If you have little equity,put any extra $ into your home loan.It cost`s you nothing but an hour of your time to check it out.Heck, make appointments with 3 other bank manager`s and ask the same questions of them all.If at the end of the day they all say no,what have you lost;a few hours of your time. If one say`s “yes” we want your business, you`re on your way!!

My 2c

The journey of a thousand Miles begins with a single step !

As has been stated, as Nike says “Just Do It”..

Actually, attend your local library, look at the property investing book’s, and as a broader picture maybe read one of Noel Whittakers books, Robert Kiyosaki’s is a great read, The richest man in Babylon is a classic… P.S -Library’s free ( ask them to get Steve’s book )

If you have some dollars to spend, see some of the recomended reading on this site..purchase Steve’s book ( Proceeds to Charity ) and get a ‘feel’ for what we’re talking about..

Practice investing… look at properties in your real estate agent’s windows, imagine purchasing one, now what are your cost’s, what rental would you recieve, how much interest will you be paying..

Join in this forum as you have done so..and read a ‘lot’ of the post’s..then ask some more questions..many here much more qualified than i are willing to help!

REDWING

“Money is a currency, like electricity and it requires momentum to make it Effective”

Just a different opinion regarding mortgage insurance. Kay mentioned ‘i disagree about paying lender´s mortgage insurance- that`s money down the toilet’.

Saving for the first deposit is definitely the hardest part of purchasing property, be it for investment or PPOR. LMI enables you to enter the market much more quickly than if you needed to save the additional 10%. It also allows you to leverage greater borrowings and therfore, theoretically more purchases, if you so choose.

For example, to purchase an IP in the following example (I have excluded costs)

IP Purchase Price: $250,000
Loan 90% LVR: $225,000
Deposit: $25,000
LMI (1.9%): $ 4,265
Total: $29,265

Loan 80% LVR: $200,000
Deposit Required: $50,000

Annual Salary: $50,000
Annual After Tax Income: $38,078

Assuming you can save 50% of net income
1 year $19,039
Time taken to save $29,265 is approx 1.5 years
Time taken to save $50,000 is approx 2.6 years

Assuming 5% capital growth, then waiting another 1 year in this scenario would add another $12,500 to the purchase price, thus adding another 1.5 months to save the additional deposit amount.

Assuming you can save 75% of net income
1 year saving $28,559
Time taken to save $29,625 is approx 1 year
Time taken to save $50,000 is approx 1.75 years

Waiting another 0.75 years for the 20% deposit, would add another month for the deposit.

I have used 50 & 75% as savings ratio of net income, to underscore the point that, even with a exceptionally high saving rate, LMI allows you benefits that outweigh the actual cost.

Whilst not everyones cup of tea, they have a place in your financing strategies, and from personal experience have and will be paying asignificant role in mine.

James

hi Elwood,

Welcome to the forum. I think I have already started your journey into PI by joining this forum. The thing to do now is to set out our plan and following it.

I am a newbie myself here and have been devoted much of my time here reading posts and reply. I admit the information here is very helpful. People are very willing to spare their time to give you advice and opinion. This is great, and I really thanksful for the advices that I get here.

As as newbie, what i have done so far:

1. Participate in this forum to learn more
2. Ask mortgage brokers to discuss about my borrowing capacity (learn a lot of jargon as well)
3 Rearching for properties; done online and through the newspapers
4 Talk to real estate agents, sellers
5 Travel to inspect the properties (if the number does stack up)

One thing I forgot to mention is that: Steve’s book and “Rich Dad Poor Dad” really motivated me and got me going. Hope you will enjoy your PI journey.

Cheers,

CT

Apart from all of the above read and re-read. Books like 0-130 properties in 3.5 years, rich dad poor dad’s retire young retire rich, Anita bell’s your investment property. There’s plenty of others. Good luck!

I too am a newbie having spent the past few years share trading and continue to do so but have now diversified into property. Wish I had started three years ago. I found the hardest thing was to actually do something. I read every book I could find, went to seminars etc (in both shares and property) and found myself just looking for that next book etc. I was procrastinating severely.

Here is what I have done.

I joined a group of like minded people and formed a property investing group with 8 units investing a $2000 lump sum and $50 per week after that. After six months we bought our first property for $125,000 ($160 rent) twelve months later we purchased another two, $108,000 ($150 rent) and $55,000 ($120 rent) all in different areas. The first house is now worth an extra $40,000 which we will use to set up a line of credit to buy more at $0 down. Six months after joining this group we purchased our own property, 4 br house, indoor (in shed) pool and 30 odd acres for $325,000 with 20% deposit. Is is now worth around $450,000 and we are using the equity to fund 5% deposits and closing costs and have purchased another three properties $83,000 ($140 rent), $68,000 ($120 rent), $66,500 ($120 rent) and $45,000 at auction with no tenant but should get $125 rent. We will now take a breather to let things settle before buying more. We started by just buying a property that was close to neutrally geared now we are looking for CF+ properties in largish regional towns and city suburbs.

My advice is to just start. Read all you can, search for potential properties, see your accountant, bank manager or broker then go out and buy. You can not get anywhere if you do not take action.

Cheers.