Hi, who out there has bought a property using a 100% bank loan and started making money on it immediately, i.e. the rent covers interest and leaves them with a small, humble profit at the end of the week??
I recently read in PropertyInvestor magazine that a couple ONLY buy properties that are positively geared. That to me sounds so exciting that I wana jump on a plane and go to these areas and buy as many as i can.
However, WHERE are these properties?? I mean are these stories slightly exaggerated or what? I’ve only ever bought in Sydney so the idea of a positively geared property makes me more excited than a kid in a candy shop
Try reading a few posts. Someone asks this every second day.
No where
It is difficuilt to buy properties in Australia that have both cashflow and capital growth. Many properties in regional areas in Australia are overpriced. There are certainly opportunities outside Australia with New Zealand and the United States being just two countries. There may well be some great opportunities in China as well. However with all opportuinities there are always issues and shortfalls so it is important that you do you research
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand The United States Property Researcher and education
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Hi M_K
i’m not suprised you are finding it near impossible to get cashflow with 100% down.
What Nigel says is true you will have to look off shore. But 100% down will be hard offshore. In NZ you will need at least 10% but usually 20% and in the USA you will need to put in 20%.
I doubt you will even find anything in NZ thats cashflow if you had to get a 100% loan, as interest rates are very high in NZ., you will need to find something returning about 12% gross to break even. In the US returns are higher than NZ but the 0% down will be a big problem.
On a personal note i don’t think you should be investing with nothing down, unless you are buying something with instant equity. As Robert Kiyosaki says “the profit is made when you buy not when you sell”.
Buying in australia something with equity in it and cashflow is near impossible.
all the best
regards westan
Over 100 deals done in the USA in 2005
Buy in the USA email me at [email protected]Hey Don,
Those figures for your new place sure sound exciting – congratulations. I would like to ask: is it common for property with that sort of yield to be sold in NZ?
Yep I am all about balance – I own a couple of Sydney properties which are milking me dry at the moment so I thought while I wait for the next boom explosion let’s do something different and buy a property that will actually put money in my pocket immediately
Cheers,
Mk.Hi there – I just purchase 2 properties in Hobart there are giving me a 7% net return, so when borrowing at say 6.6%, it is positively cash flowed from the start.
They are out there. And funnly enough, the ANZ bank recently reported that the Hobart market is the only undervalued capital city real estate market in Australia – by 13%
hi M_K
you can still develop in australia and produce posi properties.
its not easy but yes is very possible sorry not possible actual.
some are out side the cbd cities but posi with growth depending where they are.
you won’t find them on the net or waiting for some one to ring you and tell were they are you need to go bush and find them.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]Hi, I think it is possible to find good investment properties. I bought a house in Bulgaria (close to the coast) for 5000paunds last summer and 2months ago another house in Bulgaria for 1000paunds. You just have to look for them.
Originally posted by westan:
On a personal note i don’t think you should be investing with nothing down, unless you are buying something with instant equity. As Robert Kiyosaki says “the profit is made when you buy not when you sell”.Can you please elaborate on this further? To me it seems as though borrowing as much of the value as possible is always a good idea – if you are -ve gearing it seems like the most tax effective thing to do. Why use your money and tie it up when you can use the banks?
I have just started building an IP borrowing 100% + costs – only cash i put down myself was a $1,000 deposit. The property is 700K worth. I know this is the home of +ve cashflow, but I’d like to hear why the above is a bad idea.
Adam
I am desperate to buy something already i have been searching for six months but have not come up with some thing i am looking to spend 250k in a capital gaing suburb . looking for some reason why the prop is cheap. have bben looking in frankston but need someone to lead me to specific deal.
MK,
I have been investing in the US doing flips for the last year whereby I have all my money tied up in the deal and it is pretty slow going it is profitable but the numbers probably dont justify the time effort and risk involved. I have been looking into various other investing methods of minimising money in and increasing CoC return as I don’t want to have to much capital overseas.
I have just started a new method of investing called “subject to” which is very low money down about 3% where you buy a house subject to the existing loan. I have been watching these guys do it for 18 months and decided to try one for myself.
The property itself will cash flow about $100 +ve a month. I got an independent valuation on it that came back at $182,000 there is a $144,000 outstanding 6.5% fixed P&I loan on the property for which I will takeover loan repayments (but not the loan obligation its non recourse on me) which is $1488 a month including rates and insurance. I have put the house in a local land trust of which my Australian company is trustee and the beneficial interest is owned by my US company which gets all the tax benefits including depreciation. The trust details do not need to go onto public record and can only be disclosed under demand of a court order. So this all suits me down to the ground but I am being cautious and aint taking anything for granted. If it all works out I will get more.
No loan costs, no credit check, no legals, no stamp duty, no deposit only cost was a fee to the previous owner and the company to facilitate the deal and my independent inspection and valuation $400. Whilst its good that it shouldn’t cost me to hold I am holding it for either short term equity release or medium term growth.
I am marketing it as a lease option property for 3k deposit, 1595 monthly lease fee with $100 of the lease going towards the sale and sale price of 179K after twelve months.
Got a fright when I looked it up on google earth and all I could see was a road and dirt, its a new build and wasn’t there on the dated image google earth use…!!!
I personally believe +ve is everywhere, but its not like it use to be in Australia, now instead of just finding the property one also needs to be creative like subdivisions for instance, find a block crunch the numbers divide it in 2 build 2 houses, flats, units or what ever, sell one and if you crunched the numbers properly u should have one +ve property left and not only is it a good +ve u know as its new u wont have to spend any more money on it.
Hope that helps
Regards Bear
[strum]Originally posted by davidholihan:Hi there – I just purchase 2 properties in Hobart there are giving me a 7% net return, so when borrowing at say 6.6%, it is positively cash flowed from the start.
They are out there. And funnly enough, the ANZ bank recently reported that the Hobart market is the only undervalued capital city real estate market in Australia – by 13%
Only just…. surely rates and insurance eats into that profit? Have you factored in a repair budget as well?
Don’t forget a depreciation schedule which can add a few dollars in cashflow depending upon age of the properties.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by proper property:I am desperate to buy something already i have been searching for six months but have not come up with some thing i am looking to spend 250k in a capital gaing suburb . looking for some reason why the prop is cheap. have bben looking in frankston but need someone to lead me to specific deal.
Perhaps you need to engage a buyers agent to put some deals on the table for you?
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by proper property:I am desperate to buy something already i have been searching for six months but have not come up with some thing
Hi PP,
I am not sure if your comments are an accurate reflection of your level of ‘enthusiasm’ or not but it is important you maintain a business like approach to decision making.
A vendor may sense your enthusiasm and you could end up buying something for the wrong reasons or with minimal research.
While you may be sensing frustration (desperation?) at the moment just remember you will find yourself a property – it just may take a while.
On a related matter I wonder if part of the reason you are yet to find a property is because you are looking for a perfect property. They rarely (do not?) exist.
A possible alternative is for you to create a list of ‘must have’ property features and a second list of ‘like to have’ feature and focus on the must have list initially. Use this as your primary sifter and the ‘like to have’ can be the final determiner.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958
Skype – derekjones2113giving me a 7% net return, so when borrowing at say 6.6%, it is positively cash flowed from the start.Only just…. surely rates and insurance eats into that profit? Have you factored in a repair budget as well?
I use the term “nett” to mean everything has been paid for except the mortgage. Maybe my definition is different to others.
If a prop is doing 8% nett, and the mortgage is 7%, it is making money for you.
The 8% nett might be say 11% gross minus all of the costs (rates / water rates / land tax / insurances / repairs etc etc etc).
What do others understand of the term “nett” ??
Originally posted by Dazzling:giving me a 7% net return, so when borrowing at say 6.6%, it is positively cash flowed from the start.Only just…. surely rates and insurance eats into that profit? Have you factored in a repair budget as well?
I use the term “nett” to mean everything has been paid for except the mortgage. Maybe my definition is different to others.
If a prop is doing 8% nett, and the mortgage is 7%, it is making money for you.
The 8% nett might be say 11% gross minus all of the costs (rates / water rates / land tax / insurances / repairs etc etc etc).
What do others understand of the term “nett” ??
Righto my mistake – read gross when he said nett.
But stillsailing close to the wind – an unexpected repair or vacancy will quickly turn it negative…
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
A response to “property property”.
Every state has its quirks, Steve discourages speculative guesticulating for obvious reasons though it, as I see it, is paramount in finding those elusive ++CF properties…(Certainly once you’ve found them put the speculation to bed for the due diligence and number crunch criticals)
Look for where big business and corporations are spending $$ or moving their ops, especially in an industrialised state such as Vic, this movement will determine where people will want to live i.e. close to their work and within the demographic populace Steve encourages us to search in, the middle or avg market where plenty of renters are…
The old pentridge prison (Coburg) is all dolled up and fancified with nice overpriced 1,2,3,4, bed apartments and “designer” houses, the areas around the prison are still ocupied by the families of the old prisoners (obviously) and these areas have GEMS waiting to be licked or polished and the rewards reaped, yes, you will be buying in what is probably some of the roughest areas in Aus and the neighbours possibly wont speak good english but who cares, leave the emotions in the bedroom where theyre worth their weight in gold not out here where theyre a bloody big hole in your “property-ocean racing yaght”, remember some of these people have bought these houses straight from the government ten to twenty years ago for PEANUTS and have no idea what they are worth or how to get the most out of the deal or just want to capitalise on any deal to fund lifestyle…They possibly havent even paid off the miniscule government loan that helped them buy the joint in the first place and need the tiny amount you consider your offering as payout for the loan as the loan is hindering how much they are getting from the govt fortnightly anyway…(You could consider refinancing them with vendor finance acting as a bank yourself, Aussie Home Loans figure head lives just round the corner from their himself!)
Bracksy has given some unique injections around the state, one of which being in and around the Latrobe valley being for the referbishment of the electicity production thingo’s (sorry heads not werkinLOL) $104M in this re-furbishment SO, I would look around there for starters.
Secondly there are alot of big inner suburb multi storey houses which can be bought and sub-letted for ++CF.
Thirdly, the Vic property market is fairly advanced, like Sydney BUT different in that there are alot of big blocks, you may be too late to grab these BUT the developers whom have (from Montrose to Mornington, Sunbury to South Geelong!) are redeveloping and looking to sell-sell-sell and love to hear from people like yourself early on in their developmental stage, drive around, check it out, look for developments or recently sold big blocks and see whats going on with them, dont fall into the trap of thinking you need to find a yummy place in Hawthorn or Doncaster (or certain UP areas of Frankston and the like) invariably ++CF wont be found there BECAUSE the wealthy will be snapping the new developments up at an overinflated price so they can buy $500 door handles to impress their nieghbours friends and family (I have dealt with all these types, love em as they are happy to pay top$$ for my services!)
Hope this helps, I am no expert though, but a fierce hunter…
Sincerely, Jarrah
“ask and you shall recieve”
++CASH FLOW PROPERTY HUNTER
(Climbing & Consulting
Arboricultural Services)
0431433288“be ye angels?”,
“nay we are but MEN!”The stories usually involve you getting in your time machine and transporting yourself to the time when the people purchased their properties before the last property boom !
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