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This is the property managers fault for not following up on the references. These do not take a week – <moderator: delete language>. I would argue that we found the best possible tenant and the prop. manager screwed it up, end of story, so rent is not due. See you at arbitration court…. that's if you can be bothered.
Ian
http://www.theblockblog.com
Free Property Investment Info, Tools & Resources for Investors … with a Sense of Humour.Probably not because of the date of redraw and the date of rental, but best to check with your property accountant. There are other issues and benefits with regard to renting your previous PPoR. Best you check out the possibilities.
Ian
http://www.theblockblog.com
Free Property Investment Info, Tools & Resources for Investors … with a Sense of Humour.Use a semi gloss as well or gloss paint. In fact in a rental these are best throughout, as marks wash off easier. You may never wish to live in a glossed up house yourself but doesnt matter for renters. Saves you time and money in the long run.
A good extractor fan over the shower will get rid of 80% of your steam and moisture problems and as suggested, connected to the light switch.
Sand back, reseal and good paint ( gloss or semi ) – new extractor fan and you should be right.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors… with a Sense of Humour.You shouldn't be surprised that an agent would come back to you with "NO DEAL". You offered $5k over the $295k. May as well try though. What is positive is the agent has told you what the vendor wants @ $320k
What is the house worth? Do you have an independent valuation? If so and it is under the $320k mark then present it to the agent with an offer for the valuation price. That's if you really want this house I guess.
If the vendor is priced oriented then Im guessing the property hasnt been on the market that long OR they are holding out for an unrealistic price in today's market. You will have to work out which it is.
Have there been any offers? How long on the market? What are the comparable sales?
PS: A long settlement doesn't usually help a PPOR purchase and I'm assuming you are renting at the moment, but you could trade off the extra you pay for the house, with the longest settlement time you can manage. That settlement has to include early access to allow you to live there rent or loan free for that time. Based on 6.5% interest on a $256k loan,(80% of $320k) you would be saving $1386 per mth. A 6 mth settlement would get you back $8,000. If you continue to save these funds during that (free) time and repay the amount into your loan at settlement, a $320k purchase becomes a $312k total price. In this way you are converting the 'dead rent money' you pay now, into the exta payment on your PPOR. Again a long shot, but the agent said they were price oriented. This will test them out to your advantage.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources For Investors with a Sense of HumourHi Paul
I think there's a difference between a "mentor" and a "guru/spruiker" and a "coach" for that matter.
A guru spruiker is probably selling you their product to invest in, a coach may not be the best property investor out there, but knows how to get the best out of people and a mentor is a person who has walked the walk and is probably still doing it.
Fredo's advice is strong and I would look for a mentor in the field you choose if you want to fast track your investing.
A lot of people forget that investing in your education is ongoing and in property investing it's no different. You should be continually adding to your knowledge base. If you decide that the best way is through a coaching programme, then so be it, there are some genuinely great ones around.
If you want free information, then go knock yourself out! There's a ton of info available in every investing strategy type.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of HumourHi Nathalie,
Welcome and congratulations on starting your property investing journey.
Some good advise given above and I'd reiterate that you will need to educate yourself as much as possible without complicating things. Probably the easiest way to begin is to keep things small. Start with a small project in an area you know well. This way you do not have to relearn a lot of aspects. You will have a good knowledge of the area, the types of properties, the people who live there and buy there etc. Also you can manage your investment easier.
The key is figuring out what you want from property investing, how long you will give yourself to get there, what are your financial and risk levels and what strategy or strategies fit into each or all of these aspects. Am I an active or passive investor? Is capital gain or positive cashflow more important to me? Do I want to manage my investments? Do I want to project manage and add value by renovating or developing?
To start off, some of the simplest, easy to read books on a number of property investing strategies are by Margaret Lomas and of course there is plenty or reading on every subject here on the forums.
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors with a Sense of Humour.Derek wrote:Off the top of my head PMs who1. Forget they are employed by the landlord and not the tenant.
2. Are not proactive in rasing rents & attending to maintenance requirements.
3. Are not in regular touch with landlords. (LLs should also be proactive on this too)
4. Allowing tenants to go periodic
5. Being reluctant to get quotes for work to be done.……………………………………………………
Ditto Derek. When the chips are down PMs will go into protective mode and pull out the Rental Tenancies Act to tell you they have acted strictly in accordance with the articles therein, no matter how many of your requests or instructions they have ignored.
They are all as sloppy as each other. I have had about 10 and for various reasons they have all failed miserably and cost me money that was not necessary to spend.
Taking the side of the tenant has to be one of the most annoying traits, but equal to that is slack property inspections and reporting of detail to the landlord is another major annoyance.
Just remember, being a landlord ain't easy. You have to manage the manager and it's very proactive when they don't get things right.
Ian
http://theblockblog.com
Free Property Investment Information For Investors With A Sense of Humour.grantos_champos wrote:In everyone's experience, how many properties is too many for a PM to properly manage and keep both sides happy? Any numbers someone can throw out there?ONE
Ian
http://theblockblog
Free Property Investing Information for Investors With A Sense Of Humour.If you buy the land now at below market value, factor in 2 years of holding costs before you build. Will a similar block, if you can find it, be less or more than that figure to buy, 2 years from now? What is the difference estimate?
If you buy another IP, will you be better off financially in 2 years considering possible capital growth, if any, of each property and any positive cashflow during that time? What is that figure?
If you sell one IP in 2 years, after sales costs and the capital gain tax you will need to pay, where do you stand? What is that figure? What also is the drop in income and positive cashflow, if any?
At a rough guess because it's only 2 years between your strategy, you may be better off buying the land now.
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors.Hi Ray
If you have finance issues because of current savings, age, bank assessment of your employment etc, then consider using an individual finance partner's money for the project. It could be your sister but she may have similar issues with obtaining credit, I don't know, but going into a joint venture partnership may be your only alternative.
This arrangement may not only solve the issue noted above, but also provide you with a faster track to get the prior experience runs on the board for future development projects.
You have 2 options. Either look for a money partner who will provide the funds at a certain interest figure ( usually higher than the bank), to be paid off monthly and then the balance when the project is sold, or look for Joint venture partners who can provide finance allowing you to project manage, but would want a % interest in the final outcome ( usually 50%)
Ian
http://theblockblog.com
Free Property Investment Info. Tools & Resources for Investors with a Sense of Humour.
Life's Too Important To Be Treated Seriously!Jack Flash you're like an unrelenting pitbull. Love your work.
Engelo, just make sure your PYA strategy is in place
Ian
http://theblockblog.com
Free Property Investment Info. Tools & Resources for Investors with a Sense of Humour.Life's Too Important To Be Treated Seriously!
I have had to sign the bank doc and register my 'official signature' with proof of ID, in person. My business partner, who is out of the country must personally sign signatory ID forms if he wants access to the business account. You will also be asked for your tax ID either employer tax ID (EIN) your Soc Security no;, which you won't have, or your personal tax ID or ITIN which you can apply for outside of the US.
Since last year also, new bank reform laws have been enacted making things even more tricky.
Also avoid Bank Of America – they are going down the toilet.
Ian
http://theblockblog.com
Free Property Investment Info. Tools & Resources for Investors with A Sense of HummerIn theory, you are right. Buy the IP, then use whatever equity to help purchase your PPoR. You still need to cover the loan on the equity + your res. home loan, if you were to get it. A lot of people forget that using equity is still borrowed money. It ain't free. Will your combined incomes support your IP leveraged to the hilt AND a PPoR?
The first thing though is the equity you have in your IP is not enough to borrow on unless you were to raise the Loan to Value Ratio (LVR) from 80% up to say 90%, which then increases your outgoing payments making the property negative. If the market drops then the bank can ask you to make up the difference to get your LVR down, so you will be treding on uncharted territory for both of you and probably not the best strategy.
Also you can only borrow up to 80% (usually) of your equity, so the difference between 80% LVR now ( your $64k deposit) and 90% is $32k less 20% is only $25,600
Does this make sense?Personally, given you are starting out and havent got huge finances to play with, I'd look at :
- buying your first IP rather than a home to live in as the tax gains are much better and you have a rent income.
- Secondly I would probably take as much care as I could to research areas to look for the best capital gain potential suburb that I could afford and buy a property really close to the next suburb that is more expensive. ( See RP Data & Residex for this info).
- Thirdly I would look for an IP that needs some work, or I can add value to in some other way either straight away ( a cosmetic renovation) or down the line Eg: a subdivision, add a granny flat or convert an extention or garage, or develop the whole block.. This way you are in a position to create your own equity in the property, rather than waiting for the market to dictate that to you.
If you were to buy your own home first, what happens in many cases is you buy a place you want to live in which costs more than an IP that you dont want to live in. Your liability to the mortgage is much higher and you find it hard to save enough to get to the next stage of property investing. Most people never get there and those that do it can take years.
One other option ff you dearly wish to live in your own house first, is to set up a company and buy it in the company name, then you rent it off the company. The tax deductions are the same as an IP although for all intents and purposes, you have your PPoR.
Check all this out with your accountant. Make sure they specialize in property or you are wasting your time ( and money)Hope that gives you food for thought.
Ian
http://theblockblog.com
Free Property Investment Info. Tools & Resources For Investors With A Sense of Humour.Hi rusty
Using your first scenario of ending up with $30k income after 3 years, then concentrating on buying properties with a bigger capital gain potential, one problem you will have straight away, as Terry pointed out also, is available funds to
a) raise your borrowing power because you have little or no equity in the houses you have bought and
b) a similar problem to instigate your second strategy of adding value.Concentrating on buying your 2nd phase of properties that come under 'adding value' as you've outlined, is an excellent strategy, but you need the bucks to add value too, unless you are just going to sit on them until you've got the cash or their value has increased substantially.
I would start by using your 2nd strategy combined with your first and buy +CF properties that I could add value to and therefore create my own equity in a possibly flat retail market.
In this way, as you're creating some equity in each property, you could also be looking at those that are nearer to a neutral return as you will be making them positive and therefore they each may be more likely to increase in value as well, as they should be in better areas.
Have your cake and eat it too.
I also have a strategy that you can start with, whereby you can add 25% to the value of your new acquisition on top of any fantastically negotiated, below value, price deal, just by buying them. No reno, no subdvision, no building. The details will be posted on my website on Sept 11 if you're interested.
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors With A Sense of Humour.Hi Daniel,
I take the option of risk management first. Rather than look at buying multiple properties ' straight off the bat'. look for one in your price range. ie based on what you can borrow now. Lets say that Michael Chan is correct and you can borrow somewhere between $170 – $260k, then look for a property that you can buy in the lower range and that you can add value to and create your equity as fast as possible. You will need cash on the side to do this so the lower range maybe best.
Select the type of property based on what you have to do, research, buy, renovate, add a bedroom, whatever it takes, get the place revalued and also rent it out for more than first estimated.
Once you have 2 IPs, then look at your next option. Do I use the house your parents gave you as collateral to buy another or do I look for partners ( your sister perhaps) to join forces financially and buy another IP and leave the first house as back up?
You have many options to continue investing even though your current serviceability is low.
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors with a Sense of Humour.No not a scam. This is another option for finding listings. They have a much better search criteria that I wish realestate.com.au and domain.com.au would instigate.
If you are in the buying mode, then 'investar' will provide you with another tool in your kit. Not sure of the cost currently, but for the short term while you are searching, it may give you an edge. As I understand, you can opt out when it suits, but I stand corrected so read the joining details.
Hope it works for you
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors with a Sense of Humour.Where in atlanta? Time frame…. What stage exactly are you at? Maybe give a few more details and myself or someone on the forum can point you in the right direction.
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors with a Sense of Humour.hahahaha – like it.
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors with a Sense of Humour.Gday W0mbat,
Seems like you havent got a clear concept of where you want to go with the properties. Whats the outcome of buying them? What do you want to achieve? If you want to develop them, then the property with the biggest land area and most useless house is the best buy to start with. The one purchase as opposed to 2 would also not put you under any pressure it seems.
Secondly when do you want to develop the property, if thats your intention? If its 5 years from now and you have a land banking type strategy then maybe buy the 2. If you want to develop sooner, you will need every bit of spare cash to do this, so buying 2 might not be the best idea moving forward.
Your focus appears to be on the loan risk & insurance cost, rather than the property itself and what you want to do with it. Try turning your focus around to the end result and the profit you want to achieve, then work backwards. To do this you need to know very clearly what you want to do with the property, then do your costs and calculations over the time frame you have decided on. Work out your best option, then focus on the loan and the cash you will need to reach your goal with this or these properties.
You are definitely on the right track with your purchases though. Good on you. Always go for property that you can add value to down the line, whether it be immediately or in a time of your choosing. Large blocks are best.
Hope that makes sense.
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors with a Sense of Humour.Hi Minidaz1
Haven't heard of backyard buying companies, but it always worth following through with a turnkey operation like that to, at the very least, get a summary of costs. This may help you compare to the costs you would incur if you were to go it alone. You can also assess whether the fee they charge is worth paying for your time if you were to do it. ( which I doubt )
A land surveyor will do the job for you from start to finish and be able to give you a full costing of local council fees and his fee.
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors with a Sense of Humour.
