All Topics / Help Needed! / New Investor – want to purchase second property

Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of SWHSWH
    Participant
    @swh
    Join Date: 2012
    Post Count: 3
    May 21, 2014 - 12:07 am

    Hi All,

    Finally decided to write a thread and have a few questions and suggestions on what i could do to kick-start my investment portfolio.

    Purchased a 3 x 1 property for 330K in Balga, Perth in March 2013 with a 10% deposit. Currently have an offset account setup for interest only that i’m currently paying.

    I have paid into this offset account 45K so far. Tenants have vacated the property in March and I’ve been doing some cosmetic renovations to the property. I need to move into the property for minimum 6 months for the FHOG of 7K.

    What would be the next best step, to getting ready for leveraging into property #2? Is it too early to buy one?

    I’ve read alot of threads however i still need some clarification and guidance, as there would be many other investors out there already on this path.

    thanks very much in advance !

    Regards,

    Stephen

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271
    May 21, 2014 - 8:22 am

    Balga has definitely increased in value since Marc 2013 and I reckon it will continue to climb.

    1. Do an upfront valuation on the property as most likely you will have equity to tap into.

    2. Take out a loan instead of using the cash in your offset.

    3. Ensure that the loans and properties are separate and not linked/crossed.

    What is the current loan amount against the Balga property?

    TheFinanceShop | Elite Property Finance
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    Residential and Commercial Brokerage

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    May 21, 2014 - 9:06 am

    Hi Stephen

    Which lender is the loan with?

    Some lenders will allow you to tap into equity right up to an LVR of 90% without too much hassle.

    Hopefully the current lender allows you to order an upfront valuation on the property. This will give you an idea of how much the property is now worth – and how much equity you can access.

    This equity can be used to cover the deposit/costs on your next purchase. As mentioned above, it’s important that you don’t cross up your properties.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of SWHSWH
    Participant
    @swh
    Join Date: 2012
    Post Count: 3
    May 27, 2014 - 5:57 pm

    Thanks for the reply and apoligies for my late reply!

    Thanks for the advice!

    I currently owe approximately 252K against the property.

    Profile photo of SWHSWH
    Participant
    @swh
    Join Date: 2012
    Post Count: 3
    May 27, 2014 - 5:58 pm

    Thanks Jamie for the reply and information!

    My lender is Homeside (linked with NAB)

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010
    May 27, 2014 - 6:01 pm

    Thankfully Homeside have a decent upfront valuation process.

    Homeside for an initial lender isn’t ideal, as they are generally best suited for mid term, end term investments where serviceability is drying up amongst the conservative-mid range lenders. The second property might be a good chance to diversify into a more appropriate lender if you’re looking at growing a reasonable size portfolio.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    May 28, 2014 - 12:25 am

    Hi SWH

    Homeside are fine however when you have multiple smaller sub loans with them it can be expensive.

    Depending on the price you are looking at for your next property you maybe able to borrow nearly 100% and yet still keep you funds in cash.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

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