Hello everyone…
Just a little bit of background first… My husband and I were forced to voluntary declare bankruptcy after a long stint of unemployment and rising interest rates made our looming debt (mortgage + personal loans etc) completely unaffordable. (Ironically, the bloody interest rates are at all-time lows now). We learnt a very very hard lesson about getting into debt for things that depreciate rather than appreciate in value and I am now researching wealth creation, and have found that property is my preferred method. I never ever in that situation again.Anyway, I have been doing a lot of reading and we are socking away as much money as we can now to purchase our first investment property once we are discharged and able to secure at least a 20% deposit and finance through a 2nd tier lender.
My problem is that now I am frightened out of my mind at getting into debt again. Even if we can get finance (which will be a battle in itself) I don't have confidence in myself that I will pick the right property or the right tenants, and I'm too scared to try wraps or lease-options, for fear of something going wrong. I don't really know who to speak to get more information, because I don't believe I can do this just by reading a book. What do I do?????
People who learn from their mistakes will more than likely succeed when they try, try again.
An insane person expects a different result from doing the same thing over and over again. But you on the other hand are trying a new approach, one that will exceed your expectations.
As long as you understand what sort of debt you can manage without things getting out of hand, you'll be on your way.
Best of luck to you on your new journey
Hi, simple enough really. Save up more borrow less. Or if you think the timing is right when you have 20% deposit, at least make sure that your income is more than sufficient for you to pay down the loan i.e. pay P&I rather than IO that way you make inroads into the debt.
Fear is good in that it gives the check & balance to the deal.
It's also normal to be afraid.
It's also normal, almost a given, that our 1st investment is stressful. Even seasoned investors may make mistakes. My 1st house was a disaster and my NZ investments aren't very good. [they're 20 years after my 1st house] but as I get more experienced, the less good investments are balanced by the really good ones.
They say: out of 10, expect 2 high flyers, 2 dogs and 6 in between. I find that if I try to avoid the dogs, I will miss out on the high flyers.
Your present situation argues for staying safe in the mean, a conventional investment bearing ordinary yields of around 5-6% that allows you to pay down and in time, give you a stable platform to move forward.
Hope to hear good news from you in future,
KYkum yin lau wrote:They say: out of 10, expect 2 high flyers, 2 dogs and 6 in between. I find that if I try to avoid the dogs, I will miss out on the high flyers.Why don't they say out of 5, expect 1 highflyer, 1 dog and 3 in between?
elliequinn wrote:Hello everyone…
We learnt a very very hard lesson about getting into debt for things that depreciate rather than appreciate in value and I am now researching wealth creation, and have found that property is my preferred method. I never ever in that situation again.At the moment, property is depreciating? Doesn't seem like your lesson was learnt hard enough…
Ummester,
Don't be hard on Elliequinn, everyone's entitled to have a go. She's still saving for a deposit whilst researching the market. I'm sure someone who has suffered bankruptsy isn't going to throw their money around again without thinking it through.
freelance2020 wrote:Ummester,Don't be hard on Elliequinn, everyone's entitled to have a go. She's still saving for a deposit whilst researching the market. I'm sure someone who has suffered bankruptsy isn't going to throw their money around again without thinking it through.
Really?
Why do you think the world is in the mess it is currently in? Perhaps because the whole of western society has been throwing it's money around without thinking it through…
How about having a go at doing something constructive and not trying to make money for jam? How about learning a skill that society actually needs and then working for a living? I know, it's a bizzare concept, and a tough realization, that most of us just aren't the Alan Bonds we thought we were.
Elliequinn, You need to start off with a small investment price wise so that you can pay off the loan and build up equity and passive income. The more passive income the less reliance on employment. It is hard to start and you will need a good deposit with a second tier lender. So the LVR is 70% or 80% you have to check with the lender and allow for stamp duty and legal costs.
Hi, Elliequinn, I'd like to say that you're doing OK. Getting back on your feet & knowing you need to put together a deposit to start again is not bad.
And to give some balance to Unmester's comments, property is SO NOT DEPRECIATING.
Unmester, if your properties have depreciated, then you must have bought badly.
My properties certainly have not depreciated yet.
And I'll bet as many on this forum have properties that have held their value and more.
When will gold reach $1500 USD?
KY
kum yin lau wrote:Unmester, if your properties have depreciated, then you must have bought badly.My properties certainly have not depreciated yet.
KY
Then you must have bought a while back.
Ummester, I suggest that you do not judge until you know. It's not a good feeling to be pregnant with your first child, get fired from your so called secure job by a bitch of a boss, have them threaten you if you take them to court, default on your mortgage cause you have no other way of making an extra $700 per week, have your husband working 100 hours a week to try and make the deficit, fight, nearly divorce, nearly lose the baby and in the end have to go bankrupt chasing the great Australian dream. You try doing that before you judge people… I was cautious with my mortgage, I just didn't bet on getting fired! I am not saying my situation was any worse than anyone elses and I am grateful for our second chance.
And as for making money for jam, I am working damn hard in my job and I budget everything and am looking to partially replace my income within ten years time. I am not looking for a quick fix, I know they do not exist, I am just trying to create a future for myself and my children, and not have them ask all the time "Mummy, why don't you spend any time with us?" because I am working full time. I do not want to become rich, just comfortable…. So next time, have a little consideration before you comment.To everyone else, thank you very much for your help. I am researching over the next few years, I am not planning on jumping into anything quickly, so I think in about 3-4 years we will be ready to purchase our first investment.
Quote:Why do you think the world is in the mess it is currently in? Perhaps because the whole of western society has been throwing it's money around without thinking it through…How about having a go at doing something constructive and not trying to make money for jam? How about learning a skill that society actually needs and then working for a living? I know, it's a bizzare concept, and a tough realization, that most of us just aren't the Alan Bonds we thought we were.
Oh by the way, I have actually spent five years at University 'learning a skill that society actually needs' and am now happily employed performing that skill, however as much as I love my job, I don't always want to spend 40 hours a week in it! It would be nice to see my family more.
ummester wrote:How about having a go at doing something constructive…
Why waste your time on this forum if you have nothing constructive to contribute to this discussion?
elliequinn wrote:And as for making money for jam, I am working damn hard in my job and I budget everything and am looking to partially replace my income within ten years time. I am not looking for a quick fix, I know they do not exist, I am just trying to create a future for myself and my children, and not have them ask all the time "Mummy, why don't you spend any time with us?" because I am working full time. I do not want to become rich, just comfortable…. So next time, have a little consideration before you comment.Oh by the way, I have actually spent five years at University 'learning a skill that society actually needs' and am now happily employed performing that skill, however as much as I love my job, I don't always want to spend 40 hours a week in it! It would be nice to see my family more.
So spend time with your kids. They are more important than any kind of financial or material gain you can make in your lifetime. Your kids are real and wealth is an illusion.
How much do you need to be 'comfortable'?
Without you working (or with you moving to part-time hours), can you afford clothes that fit, food and a roof over you families heads? Do you need anything other than that?
freelance2020 wrote:ummester wrote:How about having a go at doing something constructive…
Why waste your time on this forum if you have nothing constructive to contribute to this discussion?
Obviously, what is 'constructive' and what is not is a matter of opinion…
elliequinn wrote:Ummester, I suggest that you do not judge until you know. It's not a good feeling to be pregnant with your first child, get fired from your so called secure job by a bitch of a boss, have them threaten you if you take them to court, default on your mortgage cause you have no other way of making an extra $700 per week, have your husband working 100 hours a week to try and make the deficit, fight, nearly divorce, nearly lose the baby and in the end have to go bankrupt chasing the great Australian dream. You try doing that before you judge people… I was cautious with my mortgage, I just didn't bet on getting fired! I am not saying my situation was any worse than anyone elses and I am grateful for our second chance.I feel sorry for you in this situation but property in this country has been and is still incredibly overvalued. Exactly the kind of stress that you went through here is what is being corrected and why I stress that jumping into property now will just bring you more heartache.
In 3-4 years, however, you should be fine. Though I still belive that the idea of investing in residential property by average Joes is to the detriment of society and will always lead to more situations like yours.
And, BTW, how do you know what I have and have not lived though? The great Australian dream ain't all it's cracked up to be – think outside that box.
ummester wrote:I feel sorry for you in this situation but property in this country has been and is still incredibly overvalued.If this is how you really feel about property in this country then I feel sorry for you because you will forever be renting while waiting for prices to fall to what you perceive as good. The only problem with that is the seller also has to consider your offer good value and accept it or else its NO DEAL.
Anyway, I think you are wrong and properties in this countries are undervalued. I'm not sure what type of property you are looking for, in what city or what price range but I can assure you that you are wrong, prices are very affordable and at the bottom of the cycle. Now its the best time to buy and you will never buy it this cheap again. Yes it was a spruike but not less accurate then your comment and at least just as helpful. Quote:Exactly the kind of stress that you went through here is what is being corrected and why I stress that jumping into property now will just bring you more heartache.In 3-4 years, however, you should be fine. Though I still belive that the idea of investing in residential property by average Joes is to the detriment of society and will always lead to more situations like yours.
And you know that how ? Did the guys at ghpc let you look into their crystal ball ? A third of the bears there probably reside OS and are only s*it stirring, a third are students who live with mum & dad and the remainder have bought properties recently. Now why would you think they've done so if properties are incredibly overvalued and have further to drop ?
In 3-4 years you could be looking at lower prices but you could also be looking at double the current prices, who knows ? I do remember experts predicting price falls of 10%-15% and recommending people not to buy for 2-3 years until prices corrected , that was in late 2000 and what followed is history.
Quote:The great Australian dream ain't all it's cracked up to be – think outside that box.That's a funny thing to say seeing how you are waiting for a price crash to buy into that dream.
harb wrote:If this is how you really feel about property in this country then I feel sorry for you because you will forever be renting while waiting for prices to fall to what you perceive as good. The only problem with that is the seller also has to consider your offer good value and accept it or else its NO DEAL.
Anyway, I think you are wrong and properties in this countries are undervalued. I'm not sure what type of property you are looking for, in what city or what price range but I can assure you that you are wrong, prices are very affordable and at the bottom of the cycle. Now its the best time to buy and you will never buy it this cheap again. Yes it was a spruike but not less accurate then your comment and at least just as helpful. properties in this countries – I never knew you had a literacy problem Harb.
You must be bored like me today and come to argue the point we have been for the past year or so. Sellers and buyers will both meet the market.
Quote:And you know that how ? Did the guys at ghpc let you look into their crystal ball ? A third of the bears there probably reside OS and are only s*it stirring, a third are students who live with mum & dad and the remainder have bought properties recently. Now why would you think they've done so if properties are incredibly overvalued and have further to drop ?In 3-4 years you could be looking at lower prices but you could also be looking at double the current prices, who knows ? I do remember experts predicting price falls of 10%-15% and recommending people not to buy for 2-3 years until prices corrected , that was in late 2000 and what followed is history.
40% falls in some US states is also history.
A year or more ago I predict that the economy of the western world is in for doom and gloom because we are all living beyond our means. You dismiss it and preach that property is the ultimate investment that can never fail. Who seems closer to the truth now?
harb wrote:ummester wrote:The great Australian dream ain't all it's cracked up to be – think outside that box.That's a funny thing to say seeing how you are waiting for a price crash to buy into that dream.
None of us should be sold a dream that requires parents not to have time for their children.
ummester wrote:Really?Why do you think the world is in the mess it is currently in? Perhaps because the whole of western society has been throwing it's money around without thinking it through…
How about having a go at doing something constructive and not trying to make money for jam? How about learning a skill that society actually needs and then working for a living? I know, it's a bizzare concept, and a tough realization, that most of us just aren't the Alan Bonds we thought we were.
That's a pretty ridiclous comment as I'm pretty sure the majority of people invest to become financially free so they don't have to work their normal 40hrs/wk job. This is a property investment forum, not a 'how to work 40hrs/wk for the rest of your life forum'
You don't need to be Alan Bond to be able to Invest and make a better future for yourself even if you have to try again and again after some bad decisions.
ummester wrote:properties in this countries – I never knew you had a literacy problem Harb.You must be bored like me today and come to argue the point we have been for the past year or so.
Yes to both.
Quote:40% falls in some US states is also history.Thanks, I'll remember that next time I'm thinking of buying property in US. If you follow the ghpc textbook you'll probably mention Japan next.
Quote:A year or more ago I predict that the economy of the western world is in for doom and gloom because we are all living beyond our means. You dismiss it and preach that property is the ultimate investment that can never fail. Who seems closer to the truth now?It still is, instead of the 40%+ predicted I've only seen 3% falls across the nation and rental returns going up by 10%. The best your buddies can come up with is point to a few US cities were the declining population has caused massive prices over decades and then use that to extrapolate 40%+ price falls in here. That may work on some outback mining town when the only mine in town shuts down but to infer that it will happen across the board in our capital cities just goes to show how delusional they are.
Of course property can occasionally fail, specially if you don't do your homework, but overall its still the best long term investment and the past 12 months proved it.Quote:None of us should be sold a dream that requires parents not to have time for their children.Sorry but I don't see any law forcing someone to buy dreams, not even the affordable ones. What I do see hundreds of people with just enough money to dream a Hyunday Getz camping in front of the Mercedes showroom and salivating over the shiny A170 in the window. Their dream is that nobody will buy it and the dealer will have to drop the price 60% making it affordable to them. It is possible that one of them may end up driving away in his dream A170 but the rest of them will have to return to dreaming Hyundai. Only by now the Hyundai dealer has sold all his existing stock to more realistic dreamers and because of the falling AUD has had to put up prices by 30%. So instead of a nice dream they end up having a self-induced nightmare.
So the moral of this dream is that while there is nothing wrong with salivating over the A170 keep a close eye on the number of Getz still available or you could end up with a nightmare.
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