ok this may be a stupid question, but right now my head is spinning and Im hoping by asking fellow investors I can get some perspective.
I had a plan. After reading steves book I worked out $60,000 investment property was my goal, The banks said I was ok to lend up to $160,000, which means, if my first IP works out (+cf or at least rent covers cost), I can buy another house in six months and probably keep going building up a portfolio.
Now its been hard trying to work out the perfect place to buy, Ive found many +cf properties in rural areas. and have had a lot of doubts about certain areas due to unknowns, mainly not knowing if an area is a good rent area etc. Will an area grow or will it decrease in value. etc. most likely typical fears, Ive lost focus a lot and keep kreepinmg way above my $60,000 limit just because I know the areas, or the houses look better and the information adds up better.
Ive even been sneaking a look at houses in brisbane (my home town) there are a lot of properties that I could afford, in ok areas, brisbane properties are guaranteed without a doubt to have CG but finding a +cf property would be near impossible, So Im sort of loosing focus, Im losing out on my instant gain if I play it safe, And I will be in large debt for a long time. this is what Steve mentions in his books about people losing interest because they just end up being in debt for a long time and lose focus.
Now this problem was something I was able to control, but my ex has thrown a spanner in the worx or maybe made the decision easier. Im confused right now so I have no idea which.
My ex wants to move to brisbane and wants me to buy a house and she will pay rent. I said no thats not my plan shes coming to brisbane in june / july and will need to rent a place regardless. So Ive got a long term tennant, who I can trust.
So should I stick to my plan, and focus on building my portfolio maybe by purchasing my second or third property in brisbane, if everything goes well with my first IP I wont be risking much at all, and tell her to just rent somewhere else till Im ready to buy a place in brisbane.
By buying in brisbane, my major concerns are not being able to buy another property for a long time and not bieng able to make an instant return. These two things are major reasons why I think steves book gave me that extra boost i needed to get me reinterested in property investing, I feel like Ive got the opportunity to make a choice right now if i make a mistake I have no way of recouping and Itll be a couple of years before I can get back to this position. If I make the right decision the skys the limit.
hehe aint life fun?
So yeh any thoughts, opinions, questions or just general heckling are appreciated. even a what youd do if you where in the same situation and why is good.
Tom
Tom.
This site is the home of positive cashflow.However most the people here are more into neg.and look at CG more than anything else.
I am +cf all the way and I think I am in the minority from the way people post to my threads.
So you are likely to get a few different viewpoints.
Personally if you got fired up reading 0-130 then read it again and get fired up again.
The reason you got fired up is because it makes a lot of sense.Especially to a beginner who doesnt need to be losing money by feeding an alligator.
An alligator is a property that you have to keep feeding for years and years in the hope that you will eventually make a capital gain.
To start off with you should stick to Steves principals and feel your way into the game.
He is a success and so can you be by emulating what he has done.
Go positive all the way my friend.
I know you can do it.
RussDont rent to the ex.Best not to know your tenants.They will try to take advantage of you.
WORD WORD WORD!
Ya NEVER rent to friends and family! Theyre late with the rent…..” The car broke down” “Had to pay for mum’s funeral” “the cat needed an operation” They also know how to track you down in the middle of the night when the toilet wont flush!I rekkon you should stick to your original project. Ive just been noticing some cheapies at Rocky. Id be looking in there is I was buying at the moment. Might be a bit more than 60k but still ok. But go up there and check the place out.
If in fact you decide to stick with Bris, go Ipswich, Logan or Pine Rivers.
OR if the ex is really such a good deal, why don’t you go halves in a house? You could both live there, share expenses adn you’d have access to greater equity![ohno] ….er just a thought.goodluck anyhow
Originally posted by RussH:Tom.
The reason you got fired up is because it makes a lot of sense.Especially to a beginner who doesnt need to be losing money by feeding an alligator.Sorry, RussH but I beg to differ on that notion! As you will notice from almost ALL “get rich my way” type books, their aim is to do just that “get you fired up”, however this is not an indication of being correct, and as for making sense, of course it will make sense to the reader; they aim to APPEAL, MOTIVE & make you say “I can, I can, I can”.
So little red engine, before you set off on your journey, be sure to get proper FINANCIAL COUNSEL before you run the risk of running out of steam!!
My personal opinion; read less, talk more…words on paper paint a blurred picture, or at least, an incomplete one. You need to do alot of homework before it all “gels”.
Jo
In my opinion (qualifier) you are on the right track. Look for a property with a price that does not scare you, that is +CF and (forgive my bluntness) forget your ex. She is ex for a reason isn’t she? (OK not my business)
So go and buy yourself an asset and not a liability. Think about it, would you rather have money coming in your pocket or money going out your pocket?
Furthermore, do you want to have control of your property and be able to choose your tenant or do you want to re-marry? (Oops done it again shut up Marc!)May God bless you
and prosper you.
MarcHi Word,
its hard gonna be a hard choice, many people are gonna tell you +ve cashflow, while i agree to some what, im a negative gearer and enjoy the capital gains, personally a few extra dollars a week in a +ve cashflow property is fine, but how many +ve cashflow properties are you going to need, to support the life style you want and small luxuries life has to offer…
Cheers,
sisA lot of what you do is dependant on your age.
If you are young and earning top dollars you can afford to go the -ve way and build up heaps of gain over the years.
But if you are getting a bit older then it pays to go for +cf so you can enjoy the benefits straight away.
The older you get the less risk you should take.
If you dont have much money you shouldnt take too much risk either.
Russ.Im happy with a neg cash flow property at present
i mean just negative
but i have the growth on my side with it, so it works in another way for me. Tax planning in the pipeline.I do rent two properties to family – I dont have a problem, and I do have leases. They know point blank, that i will be callous when it comes to business, there are no friends in business and they are tenants like the others.
I think you need to know the family members well enough, I wouldnt rent to an ex though. Oh what a nightmare.
elves
” a blind man may see what a sighted man may not”
apologies all for the quick reply but, been a busy week and may not get a chance to reply on the weekend, dont want to drag this topic of second page.
thank you to everyone who replied I have read thru the replies twice and am overwhelmed with the great response. Specail thanx to the extremely conflicting arguements, it makes things a lot easier having both sides of the argument fleshed out.
Tom
Hi Word!
My personal opinion is to sit down and work out the nuts and bolts…….
You could work out …
Do I want the income?-Money now and freedom to work or not work?
Do I want the Capital Gains? – Money later and choose to sit back and work for some time into the future before getting a return on that blood sweat and tears?Or …. really nut it out by asking yourself …
“What is my vision? – What do I see my self doing in the near future? – it may be spend time with family… it might be sipping umbrella drinks on the beach of a tropical island.. It might be helping the needy…. find out what really makes you tick and you can then focus on … the “How do I get there!” …If you can only see the vission in black and white and not colour… how long do you think you will remain focused?…
Anyway… best of luck in whatever you need to do to get you where ever you need to go.
All the Best,
Kiwi
[biggrin]Hi Word,
I think I agree with KiwiFulla and to all the replies to some degree. Personally I would never mix business and pleasure. That way everyone inderstands the rules. I have a sister who has worked in real estate for over 10 years and she has always rented and lived the highlife and if that’s her choice, then good on her (I’ve also done the same in the past). She did buy a house 4 years ago and spent every cent and then some from her divorce pay out on turning it into Buckingham palace. After 4 months she fell behind in her bank repayments and had to sell. I offered to buy it off her and save her an extra $20k+ but ‘sibbling rivalry’ killed her of any thought of doing that. She sold the property and I didn’t buy it as it would cause more waves. Today the property is worth double to what she paid. She still rents and yet has always had her fingers on the pulse by being in the real estate industry yet expects me to buy a place for her to rent. That doesn’t coincide with the reason why I buy property and she would have or create every excuse not to pay the rent. That being said, my other 2 cents worth is to concentrate on your goal/reason why you want to invest in property. If you liked the book Steve wrote and that’s what you want to do then also throw into the melting pot what stage in life are you at (commencing into the workforce – close to retirement?, I hate my job – I love my job?, etc,etc.) From this you’ll form a strategy to seek your goals. Good luck!
Regards,
Gatsby.A couple of numbers for word-
If the bank will lend you 160k, then why not buy 2 pos/neutral/slightly neg geared, in the same area which you think will go well in the long run?
As for renting to the ex- well, in the same way that you have let someone else marry her, let someone else tenant her!
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