100 percent equity on three NZ properties.
Reason – firstly risk mitigation. Not kidding you, I could hardly find a single person with a good thing to say about the three properties I bought, at the time, that thought they were a good idea. Most people thought I was making a terrible mistake and would lose money. (of course those people didn’t KNOW, and weren’t investors…heheh) ALSO i am self employed and work in Entertainment so not a cookie cutter person for finance, and not buying cookie cutter properties. Also the properties were so cheap that even the banks may have screwed up their noses at them for finance!! They were less than half most bank’s minimum lends!!!so thought I would leave them a year, see if they COULD support themselves if financed, (they so can – I’m over 20 percent returns with all three now, and 70 percent capital gains based on the current market.) also thought I would do the renos and get them tenanted in the new reno’d state, using the increased equity and rental and serviceability in the future when I finance all three to get more properties. It’s been a year now and at any point I will at least double my portfolio to six properties if not more in the next year, the problem with doing that is 90 percent procrastination (after realising it’s ALWAYS a good time to buy properties, so there’s no rush) and 10 percent too busy….OK, 100 percent procrastination, cause i really could fit it in if i wanted…
Yes, note to self, i really must get on to that…
cheers-
Minijoy to the world
Hi SPT,
Seeing as you have the cashflow to fund the debt, why not consider buying old house on block zoned duplex.
Then build two (or add one if you can retain the existing house)
You then have choice of keeping both for rental or keep one sell one to reduce debt.
You end up with new property which will have minimal maintenance costs and maximum depreciation deductions.
Only downside is that you have to fund the borrowings during construction with no tenant to help cashflow, but the interest cost is deductible during the whole process ( tax ruling based on the Steele case)as long as the intent of the purchase/development was to build an income producing property.
I have found this speeds up the equity process without having to wait for the market to increase/improve, by tapping and realising the potential of the land value via the subdivision process..Cheers, KP
I’ve got about 70% debt, but would happily increase it to 80% if only the bank would lend me some more money – but then I would probably have to get a job[confused2]..
Then I would invest in some cashflow investments (not property) and (if I had got one) quit my job![biggrin]
Cheers
Melhehe- too funny Mel- quitting your job before you have one
Did you buy into that Paddo place, mel?
kay henry
I did Kay – settlement tomorrow[biggrin]
The biggest cashflow drain I will ever own! But I haven’t seen any 3 bed terraces 4 sale under $850K recently, so I’m more than happy so far![specool]
Cheers
MelCongratulations Mel! You coming to sydney for the settlement? or staying home?
Paddington is an excellent choice, Mel. Perfect spot for an investment
)kay henry
Hi KP
Thanks for the reply. We have looked into building a couple of units a while back, but initial investigations found the figures did not add up. Rightly or wrongly we have only been looking for positive cashflow properties. This is not to say we will not do it in the future.
Could someone please enlighten me?
How do you reply to someone ‘Originally posted by *******’?
How do you add smilie faces to your text?Regards
SPT
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