Hi guys!
Consider me a very keen and interested novice, who needs help with direction!
I have been very fortunate. Inheritances have come my way, and i am sitting on a healthy mountain.
My house is paid off.
I just purchased 2 off-the plan apartments in inner Melb. With 10% Deposits for each.
Have not even gone to the banks re finanace for these investments. And that kinda scares me. Both arent due for completion till end of next year.
On top of all this im sitting on 400K cash.
So on one hand im kinda not worried re apartment finance, as i can cover alot obviously.
One apt is 360K
the other is 410K.I dont want to just sit on 400K for a year and a half. I want to make the most of it.
My initial novice thoughts are to use it to pay for a property out-right, in an area of growth, so that in years it will be worth more.
And meanwhile negatively gear the apartments, one in my name and on in my wife's.So we minimise our income tax. And we can use our house and our paid out investment as security to get the loans. IF the loans are an issue.
Now im sure you experts out there have spotted a gazillion flaws in my methods!
And thats what i want to know!
We each earn 80K
Our own house is worth about 440-450K – paid
We have no debt.Tell me what i can do better! PLease!
I have been given a gift, and i want to grow it for my kids!
I want to seek out a financial planner (melbourne) but who to trust is a minefield for me!All your thoughts appreciated!
Noobie!
I wouldn't be going with any more off the plan apartments if I were you – as you are praying they are valued above what you have agreed to pay for them when completion time comes.
Banks are generally offering only 80% finance. So this means you need to pitch in 20% per apartment. So that's $80k each.
If I were you I'd be speaking to financers to ensure someone will actually come up with that 80% when the time comes.
Then for future purchases, diversify. You already have two Melbourne apartments. So look to other ideas so that your other properties can do well in times that Melbourne apartments do not. Perhaps a 3 bedder house in the burbs. They have land and that means capital growth which is GOOD.
That's my 10c worth anyway!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I cannot help you as I am in sydney, but you are right…. go see someone. No-one is a certainty for a loan in todays climate….. You need to see a broker/ planner before blowing opportunity….. You are not going to get enough personal advice on this site without knowing all your intricate details (that is dangerous in a public forum).
RE: Who to see? Watch out for the references and who is in bed with who? My suggestion to you is to see several local brokers that have made themself money through investment properties.
I'd agree you definately need to see the banks/mortgage brokers to get your finances in place for the apartments.
Assuming you need twenty percent deposits on the completed valuation, you will need to set aside half your $400,000
for that purpose.That still leaves you with the other half. I agree you need to diversify, and it might be possible for you to put two or
more deposits on more properties. You could investigate newer suburbs with good growth prospects, rental return and obviously good deductions and low maintenance issues, or maybe you'd be interested in property with future subdivision potential, or renovation prospects that could increase your assets?You might find one of the major banks has a business banking wing that has someone who is property savvy who can
help give you reasonably unbiased advice, plus they will direct you toward estate protection, wills, trusts, etc.Good luck,
GHi, finance is not an issue. How to minimise & capitalise on your PAYG is.
Do you realise you have some VERY savvy property investors in Melbourne? Steve McKnight, Michael Yardney, & a host of other investors who don't 'teach' but who post on these forums?
KY
Hi Noobie,
I can’t help you with your Australian investments. I can however offer some sound advice moving forward.
First, be conservative and keep a large cash reserve. How much depends on your living costs but I recommend 1 years worth covering all costs for you to live in the life style you have become accustomed too. This is very important. As a beginner, you will make mistakes. I’ve being doing this for 5 years full time and I still make mistakes. Having money set aside for just in case mistake moments is essential.
Second, real estate isn’t always as liquid as investors would like. Think about how much cash you need in a year or so. It might be a good idea to keep some of it in something more liquid.
Third, take some of that money and educate yourself. There are a lot of good books out there and even some decent seminars. I know when I started that really helped me avoid quite a few of the common pitfalls. Seems to me there are quite a few knowledgeable investors in your market right here. It couldn’t hurt to send them and email or drop them a line and most would probably help.
Fourth, take your time! Don’t be rushed or pressured into any deal. There are always more deals.
Hope this helps.
Hi Noobie,
Why don't you give Stuart Wemyss from ProSolution a call. I believe his firm is financial planning and mortgage brokers and he is well regarded in the industry. He used to come onto the forum a bit so you may see some posts from him. He regularly writes for API magazine. I think he has a few specialist brokers working in his office in Melbourne. Don't know the location but I am sure if you google him you will find out.
Cheers,
TraceyHi All, need advice on next investing move
W have just finished renovating our PPOR in sydney. The house is valued at 680k -700k, we have a mortgage of about $350k.
We love renovating and are pretty good at it, I am a designer and my husband is a builder. We have our own business where we have lots of tradespeople working for us too so renovating is an obvious strategy for us. Any advice on our next move, ie sell our PPOR and use the profits to start buying investment properties that we can renovate and hold and rent or sell. we are quite attatched to our Sydney house (big mistake I know) We would have to rent a house to live in in this case. Or should we stick to renovating PPOR's and sell every 5 years or so. We dont really want to live through another renovation as this one took us 4 years (we didnt borrow any money to do it so did it the long way) Were both in our late 30's and want to fast track our finances. as we have our own business we would also like ti think about structuring our property investments separately to our business interests. At the moment all our assets are in our names and probably quite vulnerable should anything go wrong with the business.jowoodcroft wrote:We want ………to fast track our financesOK, just a general comment. If you want to fast track things, buying and selling a PPOR after a reno every 5 years, is not going to cut it for you
. Sure you save on CGT but 1 every 5 years??You need to be living as cheaply as possible yourselves and this probably does not mean living in a PPOR worth $680-700K. I know that does not get you much in Sydney
. You don't mention kids, so I assume you can rent somewhere much cheaper without too much trouble? This would free up cash for you to invest.jowoodcroft wrote:as we have our own business we would also like ti think about structuring our property investments separately to our business interests. At the moment all our assets are in our names and probably quite vulnerable should anything go wrong with the business.Agreed. You need to seek specialist advice on the best entity to use for business for tax & asset protection.
. Sure you save on CGT but 1 every 5 years??
. You don't mention kids, so I assume you can rent somewhere much cheaper without too much trouble? This would free up cash for you to invest.You must be logged in to reply to this topic. If you don't have an account, you can register here.
