All Topics / General Property / Hurdle to overcome

Viewing 15 posts - 1 through 15 (of 15 total)
  • Profile photo of BEAR1964BEAR1964
    Participant
    @bear1964
    Join Date: 2003
    Post Count: 702

    Greetings all

    I am in the situation where im finding properties that could be positive cash flow if only I had cash deposit. As it is I have to borrow the full amount (deposit in equity of the family home) that is limiting me somewhat from a +ve in South Australia. Can find some +ve interstate but considering im just starting and would be my 1st IP I would prefer it to be nearby.

    I am open to any suggestions to over come this hurdle.

    Regards Bear

    Profile photo of my65roses2my65roses2
    Member
    @my65roses2
    Join Date: 2003
    Post Count: 5

    Hi Bear,

    We are in the smae position. As we are using our equity in the family home to finance the 20% deposit, anything close to +ve becomes -ve.
    We are considering trying a wrap deal to start with as you don’t have any ongoing costs such as rates, insurance etc, and the profits will be saved for a deposit on a rental. This is what we are thinking anyway.
    Does anyone else have any suggestions for people like us who are using equity and trying to get +ve cashflow?

    Cheers.

    Profile photo of BEAR1964BEAR1964
    Participant
    @bear1964
    Join Date: 2003
    Post Count: 702

    Hi My65roses

    Thank you for your input.

    I have considered this option however wrapping is illegal in South Australia at this point of time.

    Regards

    Bear

    Profile photo of DevoDevo
    Member
    @devo
    Join Date: 2003
    Post Count: 28

    Hi my65roses

    We are considering the same thing – wraps that is, to start off with. You make a good point with being able to divorce yourself from all the ongoings assoicated with a rental.

    Have you found anybody to get you started in that area? Also where are you from?

    Cheers
    Steve

    quote:


    Hi Bear,

    We are in the smae position. As we are using our equity in the family home to finance the 20% deposit, anything close to +ve becomes -ve.
    We are considering trying a wrap deal to start with as you don’t have any ongoing costs such as rates, insurance etc, and the profits will be saved for a deposit on a rental. This is what we are thinking anyway.
    Does anyone else have any suggestions for people like us who are using equity and trying to get +ve cashflow?

    Cheers.


    Profile photo of wilandelwilandel
    Member
    @wilandel
    Join Date: 2003
    Post Count: 761

    Hi Bear,

    We come to this conclusion ourselves, a month or two ago, and so made the bold decision to put our home on the market, and get rid of our LOC.

    There was a great post on the forum a couple of weeks ago, called “Sell, Rent and invest. (or something like that),

    Use the search function, and have a read. It is interesting!!

    Regards,

    Del

    Profile photo of BEAR1964BEAR1964
    Participant
    @bear1964
    Join Date: 2003
    Post Count: 702

    Thanks for the tip Wilandel

    [;)]

    Regards Bear

    Profile photo of BEAR1964BEAR1964
    Participant
    @bear1964
    Join Date: 2003
    Post Count: 702

    Hi Wilendal

    I am having trouble finding the thread on the search could u possibly be more specific of the name or the person that started it?

    If not thats ok, I’ll just keep looking even if i have to search each page individually.LOL

    Regards Bear

    Profile photo of wilandelwilandel
    Member
    @wilandel
    Join Date: 2003
    Post Count: 761
    Profile photo of BEAR1964BEAR1964
    Participant
    @bear1964
    Join Date: 2003
    Post Count: 702

    Thanks Wilandel

    It was great reading, I have saved it to be read as an affirmation!

    Regards Bear

    Profile photo of HulaQueenHulaQueen
    Member
    @hulaqueen
    Join Date: 2003
    Post Count: 23

    Hey Bear1964!

    Wrapping is not illegal in SA. ISC have a limitation of allowing only 3 installments I think, which makes them unusable for wraps, however lease options are perfectly legal and used to do wraps in SA.

    I know there are some vocal critics of wraps in SA politics, however the sweeping opinions expressed on this so called ‘illegal property move’ have not been accurate. There will always be opponents (like Jenman), however if you approach wraps openly and ethically you will be doing good. If this is a way you could get started don’t discount it too quickly – also you could look interstate.

    Cheers!
    Sheryl

    Profile photo of Native_MetaLNative_MetaL
    Member
    @native_metal
    Join Date: 2003
    Post Count: 47

    Bear1964 could you please explain to me why using the equity in your own home as a deposit would have an affect on the investment properties
    Cashflow
    How does a cash deposit help over an equity deposit?

    Sorry if that’s a dumb Question
    but ide like to know how this affects a potential investment properties cash flow return

    Thanks Heaps

    Profile photo of annaw2annaw2
    Participant
    @annaw2
    Join Date: 2003
    Post Count: 178

    NM, if you use an equity L/C for your deposit & expenses as opposed to using your cash, you still have a minimum monthly payment on your equity L/C as well which relates to the property. We have bought properties this way too. Depends on the circumstances and your plan.
    Anna

    Profile photo of BEAR1964BEAR1964
    Participant
    @bear1964
    Join Date: 2003
    Post Count: 702

    Hi HQ

    Thanks for your reply.

    Yeah I am aware of the rent to buy and lease options and have been to Rick Ottens Seminar on the subject and yes I am still investigating it further.

    Thanks HQ

    Regards Bear

    Hi NM

    If you borrow the full amount then you have larger repayments hence the need to charge higher rent for it to be positive cash flow. One could price themselves out of the rental market.

    I hope this helps.

    Regards Bear

    Profile photo of OzpatinQ8OzpatinQ8
    Member
    @ozpatinq8
    Join Date: 2003
    Post Count: 40

    I know having CF pos property is a good thing to look for but is it the only priority ? Are you taking Depreciation and other Tax benefits into account in arriving at your cash flow position ? The more I read in these forums about 30 or more properties bought in 1 year and wrapping[:O], the more it scares me.

    Buy and hold ! – you may not get rich quickly but it will happen.

    “Success comes from having the proper aim as well as the right ammunition”

    Profile photo of my65roses2my65roses2
    Member
    @my65roses2
    Join Date: 2003
    Post Count: 5

    Hi Steve,
    Sorry I haven’t got back to you as I have not been on the forums for a few days.
    I am in SE Qld, and I have found someone who helps people do wraps. Here is an email addy if you want to contact them. [email protected]
    Their office is in Brisbane but they deal with properties all over QLD.

    Hope this helps [;)]

    Quote:
    Hi my65roses

    We are considering the same thing – wraps that is, to start off with. You make a good point with being able to divorce yourself from all the ongoings assoicated with a rental.

    Have you found anybody to get you started in that area? Also where are you from?

    Cheers
    Steve

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