Forum Replies Created
Vendor finance is actually pretty simple when you do understand it. Instead of the bank lending you money you assume the loan with the buyer. This is perfectly legal and done everyday! It is even more common in America.
This post on creating cashflow with vendor finance covers the basics and may help you to get a better understand.
In regards to the lenders I have the follow tips.
1. Find lenders who take into account 80% of the full market rate for the rent. Not 80% of 4% rental yield. What if your rental yield is 10%?
2. Don't lock everything in with one lender
3. You may need to find lenders who offer a higher interest rate for the increased risk.
4 Over time get your properties REVALUED and get the rental income from them revalued also. Hopefully this will add to your serviceabilityRyan McLean
CashFlow Investorps. Another article that may help is how to buy more property.
Ryan McLean | On Property
http://onproperty.com.au
Email MeAs everyone has said above. The first step is to GET EDUCATED. Read books and visit seminars. Steve McKnight's book is great and there are tons of other great authors out there (check out my review of top ten positive gearing property books).
You also need to decide in your mind "WHAT DO YOU WANT TO ACHIEVE?"
Do you want passive income? If so how much?
Do you want capital growth? If so how much…and how quickly?What you want will then determine which investments suit you best. It is then just a matter of finding the investments that line up with your goal. For me it is cash flow, so positive geared properties line up with my strategy. Everyone is different.
Good luck
Ryan McLean
CashFlow InvestorRyan McLean | On Property
http://onproperty.com.au
Email MeHey Kevin,
Very nice of you to offer some free stock. Looking forward to getting a review copy.
Hopefully your product has got the goods and I can mention it to the readers of my blog. I had a quick look at your squeeze page and it looks like it may be appealing.
Hope to hear from you soon
Ryan McLean
CashFlow Investor
Find CashFlow Positive Property For Sale In AustraliaRyan McLean | On Property
http://onproperty.com.au
Email MeI have been looking at towns around 2-3 hours away from Sydney. You can still find properties that generate a positive cash flow even that close to Sydney. Though you do need to be creative in your looking.
Houses that offer dual occupancy can increase rental yields and houses that need TLC can also offer high rental yields.I have friends who live in south western Sydney. You can buy a 4 bedroom house for under $400,000. They love it.
It all depends on what you want out of your investment.
Ryan McLean
CashFlow InvestorMy most popular post is on finding positive geared property for sale
Ryan McLean | On Property
http://onproperty.com.au
Email MeThe question is not "What can you buy for $600k in Sydney" but "How can I buy a house in Carlingford for $600k". I don't know why you have your heart set on that area.
Are you going to live in the property or simply rent it out?
If your goal is to eventually live in the city (but you can't afford it yet) then maybe it might be an idea to rent in the city and to buy investment properties further out with good rental yields.
Mount Druitt is the extreme, as obviously it is a pretty rough area. I'm not saying it is a bad investment, but you may want to look at investments in western Sydney, or even small towns just out of sydney and build up your portfolio.
As these properties increase in rent and value you may be able to use the equity to buy your dream home.
Ryan McLean
CashFlow Investor
Read my most popular blog post on 10 Places You Can Find Positive Cash Flow Property For Sale In AustraliaRyan McLean | On Property
http://onproperty.com.au
Email MeHello,
A. With the lease on the car – If you are paying a high interest rate (eg. 12-20%) then it may be worth your time borrowing against your home loan to transfer this debt onto a lower interest rate (5-7%). But this depends if you have the will power to then pay that off.
B. If your figures are accurate and you earn $4,200/month and only need to spend $1,500/month in living expenses then you are in a very good position. You have over $2,500/month that you can use to invest.
Have you considered investing in positive cash flow property? This is property that brings you an income above all of the expenses.
It is possible that you could borrow against the equity in your home for a deposit on a new investment property.
Over time rents will most likely increase, then you will find yourself in a position where you have a lot of money coming in from the properties and your expenses are quite low.
Is this something that you would consider doing?
Ryan McLean
CashFlow Investorps. You may like this blog post I wrote Positive Geared Properties – Are They A Good Investment?
Ryan McLean | On Property
http://onproperty.com.au
Email MeSorry but just to clarify. Are you wishing to purchase this property and run it as a business?..getting in people to manage your land and your yields?
Or are you wishing to purchase this property and rent it out to some body so that they can run an agricultural business on the land?Ryan McLean | On Property
http://onproperty.com.au
Email MeThe 2011 Census results will show the population growth/decline over the past 5 years. I don't know exactly when these results come out, but they should prove extremely helpful.
It doesn't give exact property figures, but it will show you if demand is increasing or decreasing. Increasing demand = higher prices (generally speaking).
Ryan McLean
ps. If you are interested in positive cash flow property please check out my Positive Cash Flow Property Blog
Ryan McLean | On Property
http://onproperty.com.au
Email Me#7 – Get Educated
Learn about property by reading books, attending seminars, reading blogs and joining in discussions on forums like this one. If you aren't learning then you will find it very hard to succeed at investing. To start check out this list of the Top Ten Positive Cash Flow Property Books Reviewed#8 – Manage Your Cash Flow
You won't be able to service your loans if you don't manage your cash flow. Look for a mix of positive geared and negative/neutral geared and stay on top of your expenses. Increase rents in line with the market and don't rent out your property for below market rent. Increase your cash flow and you can increase your portfolio.Ryan McLean
Ryan McLean | On Property
http://onproperty.com.au
Email MeWhy are you selling it? Why not keep it, find a way to make it cash flow positive and that way it will pay for itself? Then continue to expand your investments and grow your income, instead of selling for a quick buck?
If you need money you could always borrow against the equity on the property (if the rents and your cash flow can handle it).
Or consider selling via owner finance to get a better deal and to create some cash flow. You might like to read my blog post on Selling Using Owner Finance for more information on this topic.
Ryan McLean
ps. Think long term and try to grow your wealth, don't focus just on the short term.
Ryan McLean | On Property
http://onproperty.com.au
Email MeI would only consider option 2 if you are in an extremely high tax bracket and you wanted to offset your tax using the depreciation of the property. I don't know if that specific area is high capital growth though…
I prefer older houses as you can add value to them through cosmetic renovation (painting a bathroom does wonders). This can increase your rent AND your equity almost immediately. With increased rents it could actually cost you less to hold than option 2.
Also the larger land gives you more options in the future. Add a granny flat to the back and rent it out, subdivide and put another house on the back. You have a lot more options to work with.
Ultimately it is up to you.
Ryan McLean
CashFlow Investorps. I think this blog post I wrote may be of help to you. Check out Do New House Offer Positive Cash Flow?
Ryan McLean | On Property
http://onproperty.com.au
Email MeThis is a question to ask on a public schools/parenting forum…not on a property investing forum. Your question isn't really about property….it is about the education system. However, good luck in your search
Ryan McLean
Cash Flow Investor BlogRyan McLean | On Property
http://onproperty.com.au
Email MeHi Ry,
Like said above you need to set your goals and work back from there.
First thing to ask:
Do you want cash flow or capital gains?It is generally best to focus on one or the other.
Second thing to ask:
How much cash flow or capital gains to I want to achieve?Third thing to ask:
What is my exit strategy? Do I sell the properties, hold onto them? Pay them off completely or just keep them ticking over etc?Ryan McLean
ps. If you are interested in owner finance then I suggest you read my blog post on How To Make Any Property Cash Flow Positive Using Owner Finance
Ryan McLean | On Property
http://onproperty.com.au
Email MeLet us know what you decide
Ryan McLean | On Property
http://onproperty.com.au
Email MeI would definately be careful with one of these companies. You may be losing out on the sale of your land.
A few things you should check:
– Talk with your lender as they may need to value the property WITHOUT the backyard. You may be then forced to pay down some equity.
– Work out yourself what you think the backyard will go for…speak to a real estate agent in the area and find out if it is worth doing
– As Colin said it may be worth getting the help of a local surveyor…ask around and find out who can help you apart from one of those companies.You then have more options with what to do with your backyard….you could sell it, build on it, build a granny flat, build a block of flats, keep it etc.
Ryan McLean
CashFlow Investorps. You may find this blog post useful 7 Reasons You MUST Consider Investing In CashFlow Positive Property
Ryan McLean | On Property
http://onproperty.com.au
Email MeI would be a fan of:
E – Buying multiple positive cash flow properties. 1-3 or whatever you can afford.
Then an rents and values increase you would be able to borrow against your equity but still remain cash flow neutral and then invest in more positive cash flow property. They are hard to find, but the cash flow you got from them could service your current loan.
Ryan McLean
CashFlow Investorps. You may find this blog post useful Top 10 Places To Find Positive Geared Property For Sale.
Ryan McLean | On Property
http://onproperty.com.au
Email MeThe biggest thing you have to think about is NOT the banks or the lenders…it’s your MUM.
People always give gifts (especially big gifts) with invisible strings attached. It seems your mum isn’t giving you money to do what you want with it. She is giving you money to do what SHE wants with it. So your easiest option is to just buy a 2-3 bedroom house for as close to the $250k as possible. Live in it or rent it out.
As time passes and the property goes up in value you could then borrow against the equity to re invest. That way you aren’t touching any of your mums money (cos in her mind it is still her money) you are only borrowing against the added value on top of your mums money.
Money always gets funny when you mix it with family. Keep it simple and avoid being too greedy. You don’t need to “get rich quick”. You can use your mums money to get into the market and then use the growth/rental income you get to grow your portfolio over time.
Ryan McLean
Check out my list of Top Ten Property Investing Books ReviewedRyan McLean | On Property
http://onproperty.com.au
Email MeI have a blog that focuses on positive cash flow property
http://cashflowinvestor.com.au/blog
New posts added ever month. Blog is growing in readship so I am starting to write even more than previously
Ryan McLean | On Property
http://onproperty.com.au
Email MeGreat to see that you are getting creative. Looks like you are in a tight spot because you can’t afford to own your own home PLUS an investment property. That is UNLESS you look at positive cash flow. Unless a property can pay for itself you are going to be stuck with a one property portfolio.
I can’t give advice because I am not a financial planner but here is something to think about.
1. Buy discounted property, renovate and rent – buy property that needs work so you can get it at a good price. Do the work yourself and then rent it out. This could give you higher returns and generate you a positive cash flow.
2. Dual Occupancy – again because you can do a lot of the work yourself you may want to look at properties that you could rent out for 2 incomes. A house with a granny flat or a 4 bedroom house turned into 2 x 2 bedroom houses.
It seems to me cashflow is always going to be an issue for you unless you look at property that increases your cash flow. Or if your income goes up significantly.
If you simply sell your home and buy a house to live in while doing it up are you going to expect your wife to live in a construction zone for years? It might be alright for you, but women have different needs.
Some food for thought
Ryan McLean | On Property
http://onproperty.com.au
Email MeTo things I would be thinking about:
1. If you are going to sell you might want to think about reinvesting elsewhere. You don’t want to little profit you did make to get gobbled up by living expenses.
2. How long it is going to take to be Cashflow+
If it is going to take ten years then that is a lot of money you have to invest before you see a return. If it is only going to take a year then it might be worth holding out.3. What are your investment goals? You should set strategic goals of exactly what you want to achieve from your property investments. Do you want a certain amount of passive income? Do you want to achieve a certain amount of equity.
Knowing EXACTLY what you want will help you decide whether or not this particular property lines up with your goals. If it does then keep it, if it doesn’t then sell it an reinvest in a property that does.You can easily find property that will generate a positive cash flow. Especially if you already have a bit of equity.
4. You could sell the house by providing owners finance and automatically get a positive cash flow. One of the members of this forum did exactly that. They let me post their story on my blog. http://bit.ly/iwTnVZ
Ryan McLean | On Property
http://onproperty.com.au
Email Me
