Forum Replies Created
@ethantimor Sorry for the late reply. You may be right. My current strategy was to purchase CF+ IPs but that does limit me in buying more IPs to build my portfolio.
The IP i have currently is in Narrandera (Regional NSW). It is a Duplex (2 unit) house on a 800+ size land. The thing with this property is that it has a big Shed at the back which has back lane access and that is cut off from the two tenants. Used to be rented for $50 per week just for storage. I could renovate it to add value as Tony suggested. What other options would do you thing i can do to help me purchase my next IP. The next one I will focus on Capital growth to help me purchase my next property. But i would want a mixture of CF+ IPs and CG IPs so the CF+ IPs would help me cover expenses for the shortfall on the CG IPs.
@the-dark-knight, looking at Moree and Wagga.
@ethantimor My broker is crutching some numbers for me. :)
@benny thanks for the information.
Thanks all for your advice.
I just want to put my strategy out there to building my portfolio. I think i may need to change it. I am currently purchasing positively geared IPs in regional areas (main reason is they are less expensive and positivelt geared). Only problem is capital growth is very minimal and equity is not as great. I have one IP in Narrandera which is 2units(both with tenants) and a big shed at the back which was rented. That is now going through valuation to see how much equity hoping to use it for my next IP. The strategy mainly focus on positively geared IP and I didnt put into account capitol growth to purchase more properties. That IP at is in a company trust structure which means i wont be able to claim any tax benefits if i purchase a negatively geared property. What other strategies would you implement or change?
I was thinking of what Tony suggested of renovating my current IP to add more value or i was thinking of investing in an area that is due for growth and buy and hold? I guess i just need some advice or guidance so i can keep purchasing and achieving the goals ive set.
Thanks again.
Jad@benny Thanks for the response. That advice will help me make a better decision. Another question, are banks still wanting 20% deposit for IP’s? I was in the same situation when i bought my first IP whether to use 10% deposit to buy two properties but the banks had restrictions on only lending if there was 20% deposit? Talking about IPs in regional NSW. Is this still the case?
Thanks again,
JadThanks guys for the advice. @jamie-m, i will contact you regarding this if that’s ok.
Thanks,
JPThanks DK and Hank for the advise. I will be purchasing the property under Company Name As Trustee for Trust. It will not be under my name.
Will see what happens but i will let my broker know that i’d don’t prefer that as an option.
Thanks,
JTHi DK,
Not quiet there but in the Riverina Region. I would want cash flow in my pocket to put back in the loan and invest. If this is the case SMSF is not the right option?
Thanks,
JTHi All,
So i asked my broker if the bank refuses to provide the loan, what are the options? This is the answer he provided below:
“Go to another lender that does SMFS loans that accept the security and the LVR”
Is this the option you would take as well?
I don’t really know how SMFS loans work but how my structure is set up is company/trust.
He has said that the area is Cat 4.
Thanks for your advice.
Thanks,
JTThanks Hank and Richard. Richard i’ve sent you an email of the post codes.
thanks,
JTThanks Corey for the response. I might see how he goes and contact you if i don’t get the results.
Thanks,
JTThanks DK and Jacqui. I decided to walk away from this deal. The risk for me is too high. Thanks everyone for you’re advice. Didn’t go through but good experience. Now i will be looking at option 2 and keep looking at what’s in the market.
Thanks,
JTHi All,
Could i get another advice, the sewage mains run underneath the property 1. I’ve spoken with my solicitor and said this may be a problem if you want to develop and it will be hard to sell in the future. Now, i don’t want to develop but i do want to sell maybe later on. So question is, has any have any experience with this and if you have walked away from a deal for this reason?
Thanks,
JTWow. I didn’t expect so many responses! That’s awesome. Thanks everyone. The properties are in regional NSW close to a major city. Have low vacancy rates etc. and have down research on the area and i think it is a place good for investing as a newbie. Both Freestanding houses. I am buying and holding for now and see how we go. Purchase price is for property 1 is $197K and $118K for property 2 (capital per year is around the 3% soo not as good but again not looking at capital gains at the moment). I have contemplated on buying both properties a few times, although i think i could have if i had 10% deposit for both properties, the risk of having the both vacant would be hard financially. So i have decided to go with one for now and see how things are with the next 6months and plan to purchase more (Goal of 3 in one year – maybe will go down to 2 in one year).
BTW @benny, @aperry, @knightm, @pimobpi and @jacm thanks for your replies. I have read all through your post and have made me that much smarter on ways to go about purchasing property.
My offer has been accepted for property 1 and just going through the process. So i’m close to settlement and owning my very first IP. Exciting!! :)
Thanks,
JTYou’re right. It is pretty hard to save for 20% deposit so i may need to adjust my goal for 2 in year 1. As for the investment properties, the locations of the 2 properties are all regional NSW so annual growth is not as high. I may consider looking at borrowing 90% instead of 80% to reach my goal but well have to see with this first purchase. I’m still testing the waters at the moment and it’s all pretty scary to jump straight in. :)
BTW, i have made an offer for property 1 so hopefully all goes well.
Thanks for all your advice.
Thanks for the response DK. I was leaning towards the first option as well. I do want to build a large portfolio but since i’m still a newbie at property investing and i wanted to play it safe which is to keep the deposit at 20% of every property i buy. I was speaking to my broker and he did suggest to borrow 90% and purchase another IP but doing the numbers i think it is better to stick to borrowing 80% for now and once i get the hang of it might make that decision to borrow more. My goal for the year is purchasing 3 IP that are positively geared with only borrowing of 80% of the value. :) End goal would be to be financially free, buy family home, travel with the family without worrying about expenses etc (20 years to achieve).
BTW. These forums have helped me with some research for the 2 property i’ve chosen as options so thanks everyone.
Thanks,
JT
