Hi folks,
I hope you guys can help me out.
I currently earn around $200K working as an IP Communications engineer (self taught), nothing property related at all, my wife doesn't work and we have two small children under 5 and live in WA.
I want to derive my main income from property. I want to be my own boss and manage the risks myself, I have a passion for property and you know the saying "if you love what you do then it's not work". For these reasons I want to get into Property Development. Nothing specific at the moment I'm fairly open to all stratagies and development paths. I was planning to learn and educate myself over the next 12 months prior to getting into the 'game'.
I was then hoping to use income created from property developments and use this to fund long term IP's to secure our future and the future of our children.
Is anyone doing this and earning $200K and up? Can this be a reality or am I dreaming?
thanks
DaveIm on $140k gross – but this is BEFORE expenses…after expense it’s more like 30k net passive – and this took a good 7 years to build up + no-development (yet) just rental but all in safe residential property ( all within Sydney metro – all within 1-25 km of CBD) – But my strategy is not rental yield; it’s more capital growth hence the location and high expense.
Can 200k passive be achieved- absolutely! i have plenty of clients who are well above this 200k mark. It depends on your strategy and where our comfort level lies…
Since your in WA, if your willing to take the risk you could achieve a must higher figure sooner; it just depends on your risk tolerant…and do note you have a large family + solo income – so some sort of life,income insurance and protection is highly advised!
P.s i think Richard (qld007) who post regularly on this forum has a very high passive income on his IP.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Hi Dave
Yes it can be done and if you want to read my API magazine article you will see how i did it.
In saying this you need to bear in mind that in the current climate it is going to take time and you are going to need an income to support the borrowings both for the existing borrowings and also going forward.
Certainly once you have built up either a rental income or consistant profits through your developing lenders will take this into consideration but you are going to realistically need 2 Year Tax Returns and track record.
With your healthy PAYG income why not start small building up a portfolio either in your wifes name or DFT name and then slowly acquire income producing Assets to enable you to move forward.
Loan structure is important to enable you to have consistant access to future borrowings but no reason why this cant be set up.
Hope this helps and good luck.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
It's great to hear from like minded people, thanks for your posts.
Richard, Michael your strategy seems to be buy and hold wth development increasing values, and these seem to be working for you both so congratulations, your hard work and effort are paying off.
Is anyone doing pure development to sell relying on that as income? I'm really interested in those developments building 3 or 4 units where one unit can be kept 100% fully owned and rented plus used as equity to draw further loans.thanks
DaveI’m on the same path as you. I am planning to be out of the workforce in 2 years. I have 2 development projects at the moment, one that should return approx $400k and another that I own half of that should return $800k. At that point I am expecting to be able to leave the workforce with enough money behind me to do what I want to do (of which development is likely to be a component).
Send me a private message if you want to discuss further (your profile won’t allow PMs)
Hi Dave,
I am of a similar view. I work in commercial construction and own 2 investment properties, but really want to do res development for a living. Seems tricky to crack into without cash or a good wage, I now have quite a bit of debt due to investmrnt loans and don’t feel like I can make a move. Any advice from forum members would be appreciated.
AnitaIf you sold the investment properties, would it free up enough cash to do a small development?
If the development has enough margin in it (like 40-50% on costs) and the rental yield will be high enough at the end of the process, it should fund itself if you can raise the initial 20% deposit plus stamp duty etc.
Alternatively, if you have a great understanding of the construction process and can identify strong opportunities, with great returns, find a JV partner to provide the cash and share the profits. That’s what I had to do on my 2nd development to make it happen, until I can get my money back out of my first development.
actually I was thinking the same thing so put one on the market but hasn’t sold in over 6 months now. If sold would leave me with around $100k + after costs….would that be enough to start with do you think? To me it seems finance ois always the issue, as you suggest jv is very appealing how did uou go about meeting potential jv partners?Would anyone recommend joining property investmrnt groups?
I met my first one on here. Turned out we worked in the same building and did a deal together.
Going through a bad phase investing in an property is the part and parcel of the game. Though, getting along the tough times without much loosing the track will the something that one much try to but as things don't happen as we think. So, it would be wise to wait for a while and let the market revive itself, hopefully.
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