Hi guys
I’m just starting out in property investing and I think this forum is great. Very educational indeed. I’d like a few opinions regarding my situation if possible. I’ve never owned a property before. I have around $350K cash and $40K shares. I was thinking of purchasing a property around $280K to live in which leaves me $110K balance. With this I was gonna borrow $310K to purchase an investment property worth $420K around the inner city using a buyer’s advocate. I have done all the specific’s such as making sure I can service this loan & applying for FHOG. I am on a lowly gross salary of $50K.
My question is if this strategy is quite smart or is there an obviously better way to utilise my funds that I’m missing (eg, renting a place to live and utilising all my funds for an investment property)? What would you guys do in my situation?
Enlad,
At least you got a strategy to start of. For me I will do the following:
1. Buy PPOR $280k and use $84k (30%) as deposit which leave you another $266k in cash.
2. Buy your first IP at $420k with $84k (20%) as deposit which leave you another $182k in cash
3. Buy 5 x $100k ($500k) +ve cash flow properties and use $100k (20%) as deposit which leave you $82k in cash.This $82k cash you use it for legal/fees and charges and I am pretty sure that will leave you somethings which you should keep in the secure account for emergency.
Kind regards
Chan Dollars
[Retire Young, Retire Rich] [strum]Thanks Chan
My problem is that I won’t be able to service a $900K debt on my salary (probably even with the rental). Also, I forgot to mention I’m in Vic and $100K properties are hard to come by I think.
I hope to be able to do this one day though but I probably shouldn’t aim too high at the moment? It’s all exhilerating and daunting at the same time.
Anyone in Melb willing to hire their property consultancy services out for a fee that is lower then the current buyer’s advocates of 2% of property purchase? I’d be interested
Enlad,
$932k is not a lot because in step 2. is -ve gearing and step 3. is +ve gearing there it will help each other out.
You only need to service your PPOR.
Kind regards
Chan Dollars
[Retire Young, Retire Rich] [strum]<<<<<Anyone in Melb willing to hire their property consultancy services out for a fee that is lower then the current buyer’s advocates of 2% of property purchase? I’d be interested
>>>>Why not do it yourself? I live in Melb. You know what area, type of ppor and cost of ppor you want to live in.
My suggestion – do it yourself – I am familiar with Bayside surburbs of Melb. Got any questions, use the forum, PM or email me.
enlad,
You said in a post that it was all exhilirating. What is exhilirating about asking someone else to find a property for you? That is one of the bext parts of this game! The rest can be hard and boring.
If you are gonna spend big bucks on property, do your own homework, bud.
kay henry
Like Yack and Kay said do it yourself is the best because you will learns heap from it along the way.
Kind regards
Chan Dollars
[Retire Young, Retire Rich] [strum]Thanks guys
I’m currently into my second book property investment book. I’m building on my bookish knowledge of the topic but I’m thinking it will be nerve racking when actually putting the money down. In my opinion nothing beats good old fashion experience. My plan was to hire someone for the first property to confirm what I learnt from the books and then proceed myself. Didn’t you guys feel nervous in the beginning?
Originally posted by enlad:Thanks guys
I’m currently into my second book property investment book. I’m building on my bookish knowledge of the topic but I’m thinking it will be nerve racking when actually putting the money down. In my opinion nothing beats good old fashion experience. My plan was to hire someone for the first property to confirm what I learnt from the books and then proceed myself. Didn’t you guys feel nervous in the beginning?
Yes very much so, but feel the fear and do it anyway, just make sure u do your numbers and due dilligence. Minimise the risk
Regards Bear
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DONT MISS OUT!!!!!enlad,
Yes, I did feel nervous :o) And I had very little idea of what I was doing. I read Jan Somers, who was one of the very few aussie authors who was around at the time. My partner and I were visited by a Mortgage Broker to help us out in finding out what we could borrow, and there was no boom at the time, so there was no great rush to fix everything up. times have changed though, and buyer’s advocates now exist, so i can understand that you wish to get some help- I didn’t mean to be harsh before :o)
I actually won a prize a few years ago- a buyer’s advocate prize- and it’s so a woman – a RE agent who is a BA- can advoate on my behalf- kind of makes me feel weird giving someone else control over my money/bidding.
Best of luck with it all, enlad :o)
kay henry
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