hi all,
i’ll get to the point..
1-should i buy and rent or build and sell
2-if i buy and rent, should i use a line of credit, and if so is a line of credit a interest only loan or principal as well, and how hard are they to get
3-has anyone got any other ways of getting the money to build/rent-if i own 1 home bought if for 233000, owe 200,000 valued at around 250000, dont have any other debts own my car car and everything else in my house…..????
Hi
You can make good money by building and selling, but can also make money frokm building and keeping and leapfrogging off the extra equity.
LOCs are good, they work on an IO basis. Each month interest is added. On many you may even be able to capitalise the interest up to the limit.
But to get a LOC you need property as security. They are generally 80% LVR, but there are a few that go to 90%.
If you have good income you may be able to increase your current loan to 90% LVR or about $225K, you can use the extra equity to pay for the deposits and costs for the next one.
Terryw
Discover Home Loans
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
How long is a piece of string?
Do you want to be a doctor or a lawyer?
I believe your question is too broad. There are lots of arguments for the different scenarios including your personal preferences.
In general you would probably be better off to aim for some quick capital gain to improve your equity position. But build and sell is only one scenario, and possibly not the most lucrative one.
Reading your post, it does not look like you have a lot of building experience. Spec homes are a cutthroat market, and you are up against some big builders.You may also have some financing issues. I strongly recommend that you talk to a good MB. He should tell you the best method to proceed. If you do not like his answer, try another broker.
Consider improvement alternatives to building. Buy, subdivide, sell or buy, reno, sell. Wraps and flips are other alternatives, that I do not know much about.
The worse your financial situation, the more creative you have to become.
I think you start by reading several books and research the market. Read this forum and just increase your knowledge base. There is no reason to rush into anything.
Books to read:
Steve McKnight “0-260 properties in 7 years” (his newest and best) “0-130 properties in 3.5 years” and “$1,000,000 in properties in one year”Margaret Lomas, Jan Somers, Neil Whittaker, Property Investor Magazine, Monique Wakelin, Neil Jenman, Terry Ryder, Robert Kiyosaki, Peter Spann, “Think and Grow Rich” by Napoleon Hill,
“Millionaire Next Door” by Stanley and Danko, “The Richest Man in Babylon” by George Clason.Good Luck
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