Hi all,
I thought it was about time I posted something [biggrin] I’ve been reading the forums for a while now and am eager to get into Property Investing. I’ve read Steve’s first book 0-130, and almost finished his 2nd one (great resources both of them!!). I’ve been doing a lot of research over the past few months and think it’s about time I took the plunge did a few deals.
I currently have no IPs and also don’t own a home. I have about $60k in cash which can be used for serveral deposits (i’m guessing?). I’d like to get into the NZ market, using the ‘Problem + Solution = Profit’ technique outlined in Steve’s new book.
To begin with, I have been looking at properties mainly below the $100k mark. I am a little confused as to how I should structure these deals. For example: if I was to purchase an IP for $50k, would I be better off buying the property outright, i.e. using 100% cash? Or would it be a better idea to buy using a 20% deposit and 80% finance, and use the remainder of my savings for deposits on other properties using the 20% rule? If I was to purchase using 100% cash, then purchase additional IPs by using the equity from my first IP, would that mean that the interest charged on the loan would be higher? Being a newbie I’m not sure on the implications on either approach, or which is better. Could someone please give some insight into both of these approaches?
Thanks in advance!
Regards,
oziBefore I parted with my hard earned $60k cash – I would also read the two books by Peter Spann. Or maybe a Jan Somers as well.
Property Investing is a long term proposition and I would read his approach as well.
Then decide which is best for you. Me I prefer the Peter Spann approach.
I will buy using 20% deposit instead of using all your money for one property. as yack suggested you might want to read more books if you have read only Steve books.
Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]NZ loan pre approval from Australia in 48 hours
Hi Ozi,
You may want to consider using the $60K towards multiple deposits; How far you can stretch the $60K will depend on purchase price and the loan to value ratio (LVR) 80/20 90/10 etc.
Keep in mind part of the $60K will be required to cover purchase costs.Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Thanks for the replies everyone.
Yes, I do plan to do more research. I believe the learning part of investing never stops, it’s an ongoing thing. But sooner or later one must use the knowledge they’ve aquired and take action. Sometimes more is learnt by jumping straight into the deep end
Yack, can you specify the names of the books you recommend by Peter Spann and Jan Somers? Also, what is the Peter Spann approach?
Steven, I guess it makes sense what you are saying…. try and stretch the $60k as far as possible. The only reason I was considering using all my savings on the one deal is to minimise/eliminate finance, hence less/no interest on my first deal, which would mean more cashflow wouldn’t it? I guess if I was to use an LVR of 80/20 for my first deal, the remaining savings I have could be parked into an offset account on the loan, to reduce interest. Is this what most people do?
Regards,
oziUnder the Guru Watch forum – look for the topic entitled Peter Spann.
Its well worth the read even if its a little long. The names of the books are there.
He basically says buy growth properties (normally cities) that are normally ve-, renovate to increase equity and rents, use increased equity to buy next and repeat the process.
Thanks heaps yack! I will check it out.
Check out his two books on this website
http://www.businessmall.com.au/cache/item-299public.html?cache=no
http://www.businessmall.com.au/cache/item-410public.html?cache=no
Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]NZ loan pre approval from Australia in 48 hours
Hi Ozi,
If you intend to purchase multiple properties, then you may want to consider using the $60K towards multiple deposits,However, If you intend this purchase to be the last for some time, then in this case using all of the $60K towards this purchase may be more beneficial.
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIAPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Thanks again Steven – much appreciated.
ozi
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