[CatalystParticipant@catalystJoin Date: 2008Post Count: 1,404]

February 4, 2015 - 6:38 pm

What do you think needs to be gentrified in Kings Langley?

It has great parks. 35 minute direct bus to the city. Nice looking houses, facilities and shops. Yes it’s Blacktown council but closer in resemblance to Baulkham Hills than Blacktown area.

The closer to Baulkham Hills are the better houses. Things have moved considerably in the last 2 years. If you can’t afford Baulkham Hills I think ity is a great alternative. I actually like it better due to the flat land and lots of park areas and walking tracks.

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February 4, 2015 - 6:33 pm

Check with council what you need in order for it to be strata titled (eg fire wall, size of land etc).

Not all will be able to be strata’d.

[CatalystParticipant@catalystJoin Date: 2008Post Count: 1,404]

February 3, 2015 - 3:16 pm

D.T. wrote:

Buying cashflow postive properties is absolutely possible. most of metropolitan Adelaide is positive cashflow.

Can i ask how you are calculating cash flow in order to make most of Adelaide CF+. Must be different to the way i calculate it.

i.e outgoing(interest on 100% finance, rates, insurance etc) minus incoming (rent). Only counting 80% is not taking into account interest lost by using a deposit. ALL properties can be CF+ if you pay a big enough deposit but we’d be just kidding ourselves wouldn’t we!

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February 3, 2015 - 3:07 pm

What type of deal are you looking at? It’s not clear.
You find a deal (is that it?) and the other person pays the deposit? Then what?

What is your end goal? Renovate and sell?

Getting Money Partners can work but you need to have a clear idea of what you want to do And how each player benefits.

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December 19, 2014 - 3:39 pm

Look up the meaning of repair. It means to fix something. re·pairs. v.tr. 1. To restore to sound condition after damage or injury; fix: repaired the broken watch.

You are not “fixing” the existing lawn you are “replacing” it.
Simple English really.

That is correct bm17. It is seen as an improvement as you are replacing new for old.

You add it to your cost base.

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December 18, 2014 - 4:58 pm

$299 is not a lot of money, so you are sure to get something out of it. Most reports from beginners have been positive. But as with anything there are some negative comments.

Please let us know what you think. Speak to as many like minded people as you can. That’s a great way to learn.

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December 18, 2014 - 4:46 pm

If you are replacing “like for like” it is NOT a repair it is a replace.

A repair is when you “repair” or fix the old.

When you replace something it is seen as an improvement.

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December 10, 2014 - 5:41 pm

Puting in new kitchen cupboards, taps are improvements whenever you do them. Not maintenance.

If you want to draw equity now, why wait. The cost of lost earnings with what you can do with the money would out way tax deductions I think. We always reno straight away, thereby gaining instant equity plus making properties CF neutral at positive from day 1.

I don’t know how the option ties in.

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December 10, 2014 - 5:37 pm

If you buy under valued (difficult at the moment) and renovate that gives you instant equity and increased yield. With that you should be able to refinance and withdraw money out to buy again fairly quickly.
This has been our strategy.

If you are keen you xcan renovate effectively while still working. It’s bloody hard work but achievable.
We did quite a few 5 week, full house reno’s as well as bolth working fulltime jobs (with a couple of sickies SSHH!!).

So if that’s the strategy you want to employ I’d do that. If you can do a few before having a bub you should be in a good position. Use as little of your money for each purchase so you have money for deposits.

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December 4, 2014 - 5:28 pm

If you redraw the $32K from your IP you are contaminating the loan. ie it will be mixed with both deductible and non deductible (the $32K) money.

Do not do that.

I’m a bit confused about the $8,500 loan. I would increase that if possible (as I assume it’s tied to the IP) but it will be separate and not confuse the deductible and non deductible debt.

Change the IP to interest and if the IP is CF+ direct the rent to your non deductible loans. Or you could even compound the interest on the IP loan to pay down the PPOR debt faster.

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December 1, 2014 - 12:27 pm

Is it a unit or a house?
Do you want building, LL insurance or both?

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November 30, 2014 - 6:34 pm

Great points Benny. My strategy when I started buying was to only buy it if I could sell it the next week and lose no money.

It was tricky but it was a buyers market so possible. I had to buy under market in order to cover buy and sell costs but it was a good guide for me. A few properties I did a reno straight away and could have sold for a profit after the reno (5 weeks).

I like the philosophy that every purchase should get you closer to your goal.

If you buy well and have to sell earlier than expected it shouldn’t be an issue.

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November 30, 2014 - 8:25 am

If you think the property is going to go down in price why would you buy it.

What’s hard about it? Buy a property that fits your criteria ( for example- not too negative with CG potential). Of course you need to think what your plan for it is otherwise why buy it? Will you keep it for the long run, reno and sell?, subdivide? That’s what they mean.

Win I think you are over analysing everything. You can’t listen top what EVERYONE tells you. I made that mistake and missed out on a few good properties. I was looking for properties that filled everyone’s criteria. Everyone has a different buying philosophy and you can’t have it all.
Some people buy close to the CBD, some buy new, some old and renovate, some for cashflow.

Don’t get caught up in the research and never buy anything.

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November 29, 2014 - 9:25 am

You are correct that in a slow market a property may become stale and the price is reduced. This may or may not mean it’s a lemon property. You need to know the difference.
For example an acquaintance of mine listed her property for $519K against my RE agents advice to list it for $499K. It got a lower offer but it fell through due to an easement (no problem really). Anyway it went stale as it was over priced. Then she was in a panic (new house settling) so she dropped the price to offers over $450K and sold it that day for $447K. I was screaming as I would have bought it myself. It was a steal.
It needed a reno but basic. 3 years later it’s now worth $800K.

So you need to know if it is a good buy or not. Maybe a property was grossly over priced in the first place so not a bargain. If you know the suburb and the prices then you are able to tell the difference and jump on properties when they are right.

Are you talking basic exit strategy or how to get rid of lemon properties? You need to way up the cost of keeping a property that is not performing.
But exit strategy as a whole depends on your goals. Some buy a huge portfolio and sell down to reduce debt. Depends on personal strategy.

• This reply was modified 9 years, 5 months ago by  Catalyst.

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November 22, 2014 - 5:06 pm

Cost is around $100K-120K for a good looking one fully installed.

There are a few cheaper but they look like sheds.

This varies of course due to what council it’s in. Some charge ridiculous S94 fees.

Not a bad outlay considering you can get upwards of $300 a week rent (depending on area).

• This reply was modified 9 years, 5 months ago by  Catalyst.

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November 22, 2014 - 11:57 am

As you do not have a cash flow issue I would be looking for the best chance of capital growth rather the concentrate on cash flow properties. They are great and I love them but you need capital growth.It is possible to get both though. I don’t think a 1 bed in Brisbane is a good choice.

Do not pay down the first property. At the moment you have no non deductible debt but later you will want to buy a PPOR (principal Place of Residence) and if you pay down the investment loans you will need to borrow money to buy a home and not be able to deduct any of ot.

Get a loan with an offset account (NOT a redraw) and put extra money into that. Then you can withdraw it later and buy a home and still get the tax advantage.
You need to speak to a good broker to ensure your loans are set up correctly and plan for the future.

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November 20, 2014 - 5:08 pm

Assuming you nominated your first property as your PPOR you can use the 6 year rule and not pay CGT (assuming you do not claim the other as your PPOR). You can only claim one PPOR at a time. But you will have to pay CGT on the second property even though you are living in it. You also cannot claim rates etc on the second property while you are living in it.

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November 20, 2014 - 5:02 pm

Please explain!!!

It is not clear what you are asking.

nomination twice?

loan not approve?

need to sell it our as a nominee? You were listed as a nominee but not going ahead?

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November 19, 2014 - 5:15 pm

It’s called Vendor financing,. Google it.

What is the incentive for the vendor to give you a 5% discount and no recourse if you back out of the deal? Because you’ve paid no deposit.

Banks usually require proof of savings also.

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November 18, 2014 - 12:20 pm

You can ‘t pick one house in a sub urb and work out what the suburb is doing.

Sometimes people sell properties to relatives or their company cheap for tax reasons.

The Penrith one may have had a major renovation. Although a capital gain in Penrith of 400k in the last 2 years would not be uncommon.

I’d say that was pretty typical of Albury/Wodonga. They have had very little capital gain in the last 4 years, probably more.