Forum Replies Created
Hey There,
Interest only is a good way to go … and also Fixed interest to lock in those profits instead of wiping them out with a simple interest rise (such as the .25% one australia has just received).
Although you can reduce the loan withing the fixed structure by an agreed percentate every year and also can pay back the LMI (Loan Mortgage Insurance) with no charge to you. Even if it was only 5% per year without incuring fees … thisis 25% of the principal over 5 years… and if you get 25% capital gain …that gives you 50% ownership!!!
Cheers
Kiwi [biggrin]Yip … this is how we do our purchases …..and most of the banks do it this way… unless the trust can show how it can fund the purchase…. which unless you have about 15-20 houses in the trust and can show massive surplus of income coming in….. then you will need to go personal gaurentor….. I have been with multi millionaires at business bank “new funding” meetings and they still ask the same commitment but the lending is at the 10-20 million mark!… so don’t feel it is a personal thing :o)
[biggrin]What is it they say?
“Banks and Insurance companies never Lose!”
Cheers
KiwiHey There,
This is a somewhat risky endeavour as it is a bit like gambling… however you can mitigate (reduce) your risk by investing in one of RP datas top 100 suburbs…. I was looking at some land in NZ and looked at the current asking price to the price 18 months ago and they have made over 600% on thier original cash outlay.Some land depends on zoning changes to make them… which may or may not happen…….
The risk is high and sometimes the return is high also …
You need to consider if what you intend to do is take you to or from your goals?!
If hte answer is the later… then reconsider your approach and look an another option or an area that you can afford to start in perhaps.
Cheers
KiwiIf you need to save on the kitchen cost to compensate for the added cost in LMI…. let me know and I can perhaps assist with getting you upto 50% off good quality kitchens…. however it is not top of the line … I would say it is in the top 25% percentile with good quality hinges, door ranges and cabinet styles.
Cheers,
KiwiOriginally posted by Terryw:What about keeping a certain amount in your account. If they want to see deposit (usually don’t these days), then show them this, but you can still borrow money from elsewhere. This may be hard to do if you want to use all your money for deposits, but it will also act as a buffer if things go wrong.
What about increasing the loan on your PPOR instead of selling?
Terryw
Discover Home Loans
Parramatta
[email protected]
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Just send me a blank email, with “subscribe†in subject line.Terry, Great Idae… I did this a couple of times too (Shhhh… don’t tell the banks)…. they sorrt of never worked out that I have done it and never asked the question…. so I just kept buying … although I ran out of finance source…. so am now in the situation that I do not hav the cash reserves to proceed…. am I missing something else ????
Come on people idease … and great post TERRY… Great to see insight.
Cheers
KiwiMini…. Great Post…. I am still smiling and I read it about 15 minutes ago! I like your style and I like your perceceptive view on this… you are most certainly not one of the investing sheep and you gain my deepest respect…. great passion!
Keep it up …
Any more comments?
Cheers
Kiwi[baaa]you could:
1. Try another lender that will give you a bettter Loan to value ration … this way you can get some of your 20% equity out (Unless the market has moved dwon an aborbed your deposit value).
2. 6 month 0% credit card transfer – Pay for job, revalue once complete (Take lots of before and after photos) and then pay back card.
3. get an 18 month insterest free, nothing to pay deal … then do the same as (2).
Just my 2 cents worth,
Cheers,
KiwiGive Tony Cordato or Cordato Partners Sydney a call…..
They have done hundreds of these … if you explain your situation and current frustrations … I am sure thye will accomodate you and assist you.
All you really need is:
– Instalment contract
– Sales contract
– Legal Waiver (or at least a doc to disclose that they have have legal/ professional guidance … or chosen not to seek it and are under no Duress from you to sign (VERY IMPORTANT).
– UCCC compliance full disclosure procedures followed
And then you are humming along.
Cheers
ShaneHey BArb,
Thanks for the run down. I have a few of these that have good future build potential, I have sussed out slapping 2 bedders on them (if wurvey comes in and costs would stack up … if hte DP’s come at a good rate … will wait and see what happens.
AS for Taumarunui … I have a few deals on the go there and also Wanganui. They are both doing quite well. I also have another deal I am working on in Hamilton … just trying to suss out how motivated the vendor is :o) … will see which one of my offers they would prefer and work on them from there.Anyway cheers all….
PS… anyone know of a saavy Solicitor in NZ that thoroughly understands Lease Options?… another thread perhaps
Cheers
KiwiHey there,
Why not see if you can get the venders will leave the cash in the deal for 5 years …. then work back from there….. you never know they may agree to it and if you never ask you may have missed out on the time you could have had that finance.
Cheers
KiwiIf you know hte agents that sold the one identical to yours…. go in and tell then you are thinking of selling and know they sold another one identical to yours! … how mcu hdi d it sell for? and don’t leave until they show you the sales contract.
Cheers,
KiwiHEy There,
I have done this one my own PPOR in a room.30m2 of timber laminate (Rosewood).
The existing floor was crap and we laid masonite acrossthe complete surface area to be covered. This helped with leveling and insulation. We got hte following.
15x 2m2 packes of flooring (5mm)
30m2 of 7mm Masonite
35m2 of 3mm thinsulate foam rubber sheeting
2x glue tubes (high grade supplied with laminate board.
5 Timber edges for the door entrances
Total cost $1,500
so that is a total of $50/m2
+ Ozito Jigsaw = $26
+ Ozito Belt Sander = $29
+ FAce Masks = $9.95TIME:
Took around 2 days to lay… however if only overlaying existing flooring … 1 day.
Special notes:
1. Make sure you leave 3-7mm clearance on each wall or cabinet edging (to allow for expansion and contraction when temporatures change)
2.****** Remove all surrounding skirting boards (So you can put back on later and the job will be complete! —- VERY IMPORTANT…We got this all on 18 month interest free and no payments due .. .and then onsold the house!… then paid out cost of the job.
Good Luck!
KiwiHey there Captain…..
I have done some of these and what I do is this:
I have them instrumented in such a way that I do not have to show the new option purchaser any of my paperwork as they see a blank sales contract with no prearranged price in there… so you agree on the price and write it in and then at settlement the original sellers solicitor that you signed up the option with…. cuts you a cheque for the difference between your strike price and the new purchase price!….“legal Instruments are the key to sucess and are only limited to your imagination”
Sell the house and then…. by a rental and a
PPOR,,,,
so that you can benefit from setting you financing the right way…..
So many people make the mistake of buying a better house than the original one …. but the funds are for personal use and thus useless to claim on interest of the loan.even seek financial advise and see if you can set up a structure and buy 2 houses and rent out one of the entity and then rent the other one out.
Cheers
KiwiHey there,
sounds like you need to go back to the drawing board and ask yourself what you are trying to acheive by investing….Cashflow and lower capital gains… will get you working less at your day job the more you get the less you work….. +any capital gain is an added bonus
Capital gain
Will generally be neutral or negative cashflow which will keep you in your job and make you work harder as time goes on as the more you get of these the poorer you become in cash reserves and the richer you get in asset (paper) wealth.
Need to find what is driving you passion and then the strategy will follow your chosen path
Cheers
KiwiHey there…
Cross colateralising is not without Risk …. in the fact that you are resting all your eggs on 2 properties… os if one turns pear shaped…. the ohter can be also sold or called on by the lender as it is used a security to secure the other loan….
This is no different to securing finance for a business purchase though as banks normally ask ….“Sure you can have the 750K for your new business venture…. and which property do we use as collateral?”
You also have costs in breaking it up if you ever want to refinance one out and even pay it off… as the lender can say … hang one you owe us for the other property too… so we need payment for both to release the clean title…. and also any other debts you have with that bank… credit cards … personal loans etc…..
As long as you get it termed clearly that the security is only for the property specifically. – Sam applies when you are going garentor … get it in writing that is is specific for that loan only and shall not apply to any other agreement/contract.In saying that all you need to do is ask yourself whether the risk is worth the return? It is still a good way to move forward if the return is there….
Also ask the what ifs to see if you can handle the financial pressure if requred to do so ….
Challenge | Resolution |
– Vacancy | Get landlord insurance + Good Property Manager
– Damage | Insurance
– Interest Rate | FIXED INTEREST
Increase |
– Repair | Due Diligence pre purchase
Blowout | Ongoing maintenance/ repair reinvestment program
Loss of Job | Positive cashflow property or cash reserves
Cheers
Kiwi
[baaa]Hey There,
Here is my 10 quid worth– Weight up your risk
– What return are you going to get
– Factor in the what ifs
– When do you get your return?
– Spread our risk as much as possible.This will give you a spot check on what your deal is like if you consider all of the above…
AS fas as risk goes … ther is no point buying a 100K place in the battle zones where you are going to have lots of problems with destroyed property and vacancies etc…. howevr I agree with the others that have mentioned spread your risk and buy a few… leaving some cash for emergencies and then get comfortable with your situation and then plan to go again!
Cheers
Kiwi
[baaa]Yup good Idea Duckster…. I find opportunities and if I can’t find a buyer … I take the deal myself!
All Positive cashflow though …. I just can’t see the point in digging a hole for yourself …. especially if your risk is too high and you are just starting out….“Play hard but play it safe and use you head not your braun”
Cheers
Kiwi
[baaa]Thanks all!!!
Much appreciated!
Cheers
Kiwi[baaa]Hey There,
Looks like you answered the start of your journey when you commented about savings lacking…. Perhaps some self education in money management would be a great start to give you more opportunities…. “To manage money, first you have to master it”
1. Spend less than you earn
2. pay off your comsumer debt as fast as possible
3. Save the rest
4. leverage you savings to accelerate you toward your savings goals
5. begin your investing career.This will take sacrifice of your lifestyle …. after all it is just like putting on weight … it didn’t happen over night… so don’t expect it to vanish over night”
To get more information on destroying your debt… try http://www.johnburley.com – Hunt down his terminator plan … its free and you will be amazed how quickly you will move forward once you have put a plan in place.A couple of good resources you could look at are:
– Rich dad poor dad
– The millionaire and the golfer
– The cashflow quadrant
– Real estate richesJust my ten cents worth anyway…. best of luck with your journey
Cheers
Kiwi[baaa]
