Buying 5 Investment properties

Hi and welcome aboard

Purchasing multiple IPs in a short period of time is possible – I've had quite a few clients do it.

Two things that help a lot are access to a large chunk of equity/cash and good borrowing capacity.

Without sounding biased – a good finance person will also be a handy person to have on board. They'll structure your finances correctly and select the right lender at the right time which can assist with avoiding a hit to the borrowing capacity wall too early.

Cheers

Jamie

I second Jamie as well. He’s a gun and you’ll need the right people around you if you plan to purchase multiple properties in a short period of time.

Hey Joey,

I just want to say that 5 properties is a good goal. But a better goal is to understand why you want those 5 properties and what your short, mid and long term goals are.

Just "buying 5 properties" won't make you financially free just as "starting 5 businesses" isn't a guaranteed way to be financially successful.

Know exactly what you goals are helps you to look for properties that meet your EXACT goals and financial requirements.

Do you want to buy the 5 properties and have them negatively geared for 10 years and then sell them to access capital gains? This means you will be working your ass off for 10 more years for the hopes of a big payout.

Do you want positive cash flow straight away so your passive income goes up (maybe you achieve $500/month or more in passive income). Then you could take an extra couple of days of unpaid leave each month without noticing the strain to your cashflow.

Maybe you want a balance of negatively geared and positively geared.

Do you want to do work for renovations. If so what return are you hoping to get.

It sounds like a lot of work when all you want to do is "buy 5 properties" or "make money" or be "financially free".

But if you don't know where you are going is really hard to work out how to get there

Books on property are like books on learning how to ride. Useless except for a overall generic overview of property. Books and articles and magazines can give you ideas though on what property's have the potential to make money. You'll learn more from your first couple of property purchases then what you think you learnt in those books. 

– Buy properties that fit into your plan. 

– don't trade one job for another, renovating can be especially taxing if you are in their making "sweat equity" the rewards can be good if you have the dedication to it. And that means going out to work after you finish your job, everyday Of the week and on weekends and. everyday until it is finished. Delays from not performing if renovating yourself directly relate to your profit. And it's a double edged sword. If you take a extra day to finish. That's a extra day of

mortgage and another lost day of rent. Sometimes a partner can help you stay on track and motivate you when you don't want to do anything. 

– you may benefit in consolidating ie selling a property after the first couple of renovations to release equity.

– depending on your deposit amount you could consider a small development. Ie a corner house with land at the rear. A hammerhead type situation. A block that fronts two street frontages from streets at both it's front and rear setbacks. The reason why you would benefit more from

a small development of a straight renovation. Is that your are not attempting to make 50k-100k in just a straight renovation. Which in this day and age. Is gonna be difficult

on a property under 250k. However there are many more opportunities to make 50-100k in a development. Where the renovation isn't the driver between adding the value and it's actually the subdivison. Whilst you still might renovate the existing home

just so that it maintains as much of its value as possible after losing the land component. 

It also lets you do the development In stages if you are cash poor. And is a greater leverage on time. Ie all up you could spend 50-100 hours organising a land division and build of a new home. Your hourly rate for your return is a lot higher then trading your time for money. 

There is no right and wrong way. Most likely you need to just Start and you figure out what method will work for you but it's only after you purchase a couple properties you decide what you like the most. But it might not be the most profitable way to make a living or become wealthy.

I like renovating the most. But I stopped doing it because property development is a HUGE leverage on other people's time and the profits are bigger and there are step ups you can take almost for the rest of your life. By step ups I mean You can start with small developments and progress to medium sized and then large size, it's a bit difficult to do that with renovations. Like the most expensive house is most likely 1-2 million Unrenovated. Which puts a cap on your upper level of money that you can earn. It's very easy to coordinate multiple developments at once. You should practice developing a skill set that will enable you to step back and observe a managing type role over a labourer role. 

But it as I said. Starting anywhere is more important then anything. Overcoming that first mental hurdle and procrastinating/scared step is sometimes the hardest. 

Hi Joey

Firstly welcome to the forum and i hope you enjoy your time with us.

Sure subject to serviceability and the ability to come up with suitable deposits you can certainly buy 20 properties or more in a year (Trust me i have done it) but the number of properties is not the main aim as the quality and net equity is more important..

We focus on working with clients who want to build a long term rental stream to replace their PAYG income and not clients who randomly want to acquire multiple properties for the sake of it.

Stick with your fundamentals and use experts in their fields to get ahead.

Preferably someone who has been there and done it rather than someone who has to make money selling you some product or coourse.

Cheers

Yours in Finance

Dear Joey,

be careful with renovations. Recently, I have done a renovations on old property I have. It took me 3 months to complete. Going was good. Painter delayed work by 2 months.

sometimes, good trades people are busy. It can take more time than expected. And you have to factor I your salary and interest rate as we'll.

first some half decent property and rent it out. So you have time to concentrate on new one..

thank you

hari yellina

An alternative is to look at positive cash flow properties.

I have had 2 enquiries today's from purchasers who are looking for investors to buy a property and wrap to them using Vendor Finance Terms.

They have a deposit which will be paid over to the Investor on executing the purchase contract and expect to pay at least 2 percent above the standard bank rate.

Using a combination of strategies can be more profitable than solely just buying a buy and hold property.

Cheers

Yours in Finance