Hi gang, long time since I’ve been to visit, but, I’ve been too busy buying my first 2 IP’s after procrastinating for 4 years !
Both properties are apartments which I purchased and then leased back to the company that runs the complex, like a holiday resort. IP1 earns +ve $48 per week and IP2 earns $65 per week. I think that’s pretty good on 25 year leases with cpi increases anually, but I have borrowed 110 % on both which has cost me around 15k in equitty from my house (which has around 85k equitty left now).
I’m happy with the extra $113 per week but I’m not sure if I could be using my equity more effectively to create better returns. I know to create better returns I’ll have to find a problem and fix it, then sell it , but, starting out I do like the comfort of this type of deal. I pay no other outgoings or fees and I know my tenant will look after my property very well as it’s in their best intrests to do so.
Any thoughts would be greatly appreciated !
Thanks
Russ.p.s. Gee it feels nice to have got off the starting blocks !!!!!![biggrin]
Russ,
Congratulations. Sounds like you have a couple of good deals there.
The way I look at investments is that if a deal is making money for you at a reasonable risk level then you are on a winner.
Sure there may be better deals but sometimes (ie. the current market which is stagnating) you are better off with something you KNOW is good than with something which MAY be better.
Kind Regards,
Tim.No matter what I say, what I believe, and what I do, I’m bankrupt without love. (1 Corinthians 13:3b – The Message)
It seems like good positive cash deals.
If you do 5 more deals the same with your remaining 85k equity, you should be spinning another $12500 per year.
So $17500 return on 100k equity (effectively a no money down scenario) is an impressive 17.5% deal on your equity and still hold the properties for capital gain.
Even if you wrapped, you would have to put a lot more time in, and still only squeeze out 30 – 40% returns at best. Of course, you would be getting the deposits back to do twice as many deals.
If you are happy with this level of return,…cool[cap]….easy money!!!
But, if you deep down in your heart want more, then you may have to become much more aggressive in your investing. Do not settle for a good deal, if you really wanted a better one.
I would suggest you revisit your investing goals and time frame to see if these investments help you on your way to your end aim.[biggrin]
Live, Learn and GrowLifexperience
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