Hello all,
I am looking at purchasing a dry cleaning business. Is anyone in this forum doing the samething: running a business to support property investing strategy? Please share pros and cons.
Thanks and cheers to everyone.
It's definitely possible but being self employed can be a pain in the bum when it comes to applying for finance.
In short, it can be harder to get a full-doc loan across the loan for a self-employed customer compared to a PAYG earner. Therefore, unless your financials are in good shape over a couple of years (one year will suffice with some lenders) then you may be restricted to lower LVR loans – meaning you'll need to come up with larger deposits.
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
We started a business from scratch 5 years ago, rather than purchasing a business (no money) to create more cashflow to invest in property.
So yes, currently running a business to support property investing.Pros – Cashflow makes investing very easy now, could pay off an ave Syd house in less than 1 year.
Cons – Work longish hours.I went the other way. I had my own consulting practice as my main source of income for 10+ years. It earned good money but it was always harder to get bank finance. Also, it can be the same trap as a full time job, i.e. the more you earn the more you spend. On the side we’ve also progressively built up our restaurant business over the past 10 years (with my wife and sons managing it). I’m at a stage where i can make the transition to full time property/restaurant development and throw away the suit and tie. To swing the last deal (a cafe and 3x apartment development) I wound down my consulting practice and got a job with the government. It pays abut $50k less than what I used to earn. So, why did I do it?
(a) it frees up time – i can hold down a full time government job and manage the development, because in comparison to working for myself this job isn’t that hard (b) The bank loves it – even if you earn more as a business they tend to officially, or unofficially, discount your earnings, whereas banks see government income as more solid. (c) It frees up mental capacity- that’s been the biggest benefit for me and i didn’t realise it until I did it. When you run your own business you have to be fully mentally engaged. It’s hard to describe, but I’m seeing a lot more opportunities a lot more clearly (now that I have my brain back).I never thought I’d end up working for the government. I only have to stick it out for another 6-8 months, so its bearable. Anyway, it works for me in my unique situation. Not saying it will work for you, but hopefully just illustrating that there’s many ways to skin a cat.
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