Hi again,
In reading some posts below, I now have another question (cause I think your all so inventive/interesting & wise!)
If you were me, what would you do….
We own one house outright, it is worth about $270,000 on a bank valuation. (in real life, around $300,000, we live in this home and are currently renovating it.
We borrowed on a low doc loan (both self-employed) to buy our investment property by morgaging property 1. This second one was bought for $230,000 inc buying costs) is rented for $220 per week (not cash flow positive) and is currently worth about 270,000 (bank value) or about 285,000 real life.
Now here’s the kicker….we want to be full-time property investors by may next year. No jokes.
We are thinking of selling both homes, after renovating and doing some minor developing, (duplex’s and such)
BUT… What would you do in this situation?
Denyell
Hi Denyell,
Brave plan. What I would do is work out a detailed plan, work out some basic figures and research, research, research!
Seriously, don’t rush into anything without doing your groundwork first.
I wouldn’t sell my PPOR, because then I’d have to start paying rent. If I really wanted to get into developing, I’d sell my IP and use my equity to start with a small project. Probably a dual occ. See how I go, see if I can handle all the drama that goes along with it. If that works out well then I would move on to the next project, maybe a little bigger this time……
But that’s just what i would do, I haven’t thought it through very carefully, so there may be some holes in my plan…
Cheers,
sue [biggrin]“Be careful not to step on the flowers when you’re reaching for the stars”
Sell everything, buy houses around the 100k mark, use 10-20% deposits to buy them, then wrap the whole lot.
It sounds like your investment property has no loan as you have used a loan on your home. This is a good way to buy property as you can pay cash.
This is what I would do.
Get a LOC on the investment property for as much as you can. Then go out and buy undervalued property for cash using this LOC. do minro rejuvenations, and then get a LOC on this property based on the value, not purchase price. if you buy well and add value for little outlay, you may be able to get 100% finance.
eg buy for $80,000 do it up, 4 weeks later get finance @ 80% lvr based on the value of $100,000 = $80,000 loan = 100% finance.
And just repeat the process. I wouldn’t sell any, and try to remain in current home for a while.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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