[scruffy1837Member@scruffy1837Join Date: 2002Post Count: 12]

February 5, 2004 - 7:14 am

Being in a similar boat,,having 1 neg gear prop my wife and i decided that the solution to the “little” propblem was to find cf+ IP to offset,
this has also given us a goal/target to work towards ie neutralizing the neg geared IP.
We are only begginers, but try fix the prob don’t ditch the problem it could turn into a nugget.

Scruffy

[scruffy1837Member@scruffy1837Join Date: 2002Post Count: 12]

February 4, 2004 - 1:52 am

from my 1 experience with OTP,
if you sign the contract before 12months of completion the bank will hardly consider any market growth for the 12 month period as the bank know’s the developer figures in some of next years growth also into the cost,
I had my OTP valued by a company that is on the banks panel of valuers hoping they would accept it,no chance they took contract value.
A friend in the same developement had is contract written up,so his 80% loan was the total costing,,didn’t work the bank valued less than contract and used that,my friend lost out and lost his 30k deposit,wrecked his life.
I think it’s a sales pitch getting it valued higher than contract,,,,oh and by the way there’s lots of mortgage brokers that will tell you they can get the SW val through,,,thats another head getter they all came back to me with “contract val”.
Have fun i’m hoping to play with OTP’s more in the next leg up.

Scruffy

[scruffy1837Member@scruffy1837Join Date: 2002Post Count: 12]

January 30, 2004 - 6:49 am

thanks Stu,
Good read,
got some homework from that ,
thanks again,

Scruffy

[scruffy1837Member@scruffy1837Join Date: 2002Post Count: 12]

January 29, 2004 - 6:12 am

Dvane,
As i’m the recipient of Mels advice you quote,”bite the bullet”,i’d like to say that the positive geared property that i’m picking up fits into a scheme.
Mel knew where i was at last Friday i don’t think Mel meant “bite the bullet ” in general.
The figure’s worked,the town research is sound,it produces cash on a weekly basis and the house next door sold 50% higher.
There’s lots of opinions around from what i read at the moment regarding rural towns and begginer investors,if i’d listen to PeterP i’d not have invested as he seems to feel that rural investment could be a mistake at the moment for begginers,,this could also be good advise.
thanks to Mel and others for realising the counciling i needed at that time,one more time i don’t think Mel meant “bite the bullet” in general.

Scruffy,
all happy here[]

[scruffy1837Member@scruffy1837Join Date: 2002Post Count: 12]

January 28, 2004 - 7:19 am

thanks all,

no doubt the bank is using up equity in my PPOR,
you could feel the air when i told the bank manager i could wipe out my home loan with my share portfolio at the moment,
great positive encouraging feedback from you guys,there’s plenty more for me to learn,

Aussie offered 6.45 over the phone so i’m going to try squeeze the bank manger from his 6.57.
I’v been reading alot of posts here there’s heaps of great info,looking forward getting this one sorted and then learning some more,[]

Scruffy

[scruffy1837Member@scruffy1837Join Date: 2002Post Count: 12]

January 27, 2004 - 3:20 am

feedback time,,,where to start,

i inspected the house met the tennant,there’s plenty of areas for me to dump some of my trading profits,rotten timbers, rusty gutters,broken gas heater,stumps in the bathroom gone,but
the tennat is happy to pay the rent he even offered to paint the house room by room,(vegy patch,lol)tennant also happy to go direct debit request for payments,so no PM fee’s,
the person that sold me the property was in fact the publican,,i learnt more over 3 beers than anything the agent said,,i also met the town restumper ,painter and mechanic,,then i was offered a tennat by another bloke who was trying to find accomodation for a shoolteacher,after getting the card for the stumper,

the vendor wouldn’t move his price much the house advertised for 54,500 at 110pw rent with new hotwater and stove,,,agreed price ended up at 53,000 with the agrement to remove the old hotwater/stove from the backyard,
my bank manager told me i can have 6.57 interest only variable,personaly maybe we will have another rise in Feb then i don’t think we’ll see another for a while,
done away with the PM fee’s as it’s a weekly cost,,yearly costs i’ll pay for from trading profits,
i’m going to take 100% loan and pay my own costs for the same reason,if i take 90/10 and get $40pw or 100% at $30pw ,the difference is $10 giving almost a 10% return on my money,even though the coc return is abt 40%,and i can not claim a cash deposit made from trading.
i plan on fixing up the house where i can call it a repair,and then loading it up with white goods and try market it to the schoolteacher’s as they wouldn’t be carrying whitegoods with them,i’m not sure but i guess the white goods will depreciate or something similar and provide a better return.

the learning curve continues,,,,i need to thank Mel and others that helped me move through the mud on Friday,i’ve come out the other end better off.
On sat my wife and kids drove from Melb to Ballarat then up to Donald where we spent several hours then worked our way acroos to Shep Bendigo Wang and then to our caravan in Bright,,what a drive.
Just to think i will now get paid for that drive for a long long time and we got to take notes on other towns on the way .
I feel as if i’ve just moved up another rung on my ladder now having 3 mortgages,2 of which are investment and almost balance each other out,i think if i put in the E221d form that in fact the positive meets the negative,
Feeling like i’ve just been born,
Paul

[scruffy1837Member@scruffy1837Join Date: 2002Post Count: 12]

January 23, 2004 - 5:48 am

Leigh,
thanks also for the other info on rentals acheived,,you got me on a couple that’s embarassing main cash flow of the town,,
population i was told that a near by town called wicherproof had about 800 and this town was double that with schools /hospitals,,
I think i’ll do the do and walk the walk ,,been great meeting you guys and thanks ,,we’re off to have a look inside tommorrow with a deposit in hand,,
really appreciated the advise look forward to giving you guys the feed back,
thanks again
Paul

[scruffy1837Member@scruffy1837Join Date: 2002Post Count: 12]

January 23, 2004 - 5:36 am

thanks Leigh,
i have 2 mortgages at the moment ,one being the home.
they are separate both p&i with cba,
invest fixed till 2006, home fixed for another 3 months.
the home one is only about 30% of home value,
the invest i financed off the plan a year ago and may carry some equity too.
i think they think i’m eddible and may taste nice,
when i’m just a careful begginer,,
Paul

[scruffy1837Member@scruffy1837Join Date: 2002Post Count: 12]

January 23, 2004 - 4:35 am

Mel,
Found it on the internet but it’s in a area that we’ve been watching for a while.The town has several schools 1 private and a hospital.We got the referral on the area last year from a friend of a friend who’s an agent bought for one 48k and gets 100pw rent.(2 bedroom)
I just got off the phone to the agent,asked him about increasing rent to what i would need after spending ,not much chance of pushing it that far,120pw max.
he also suggested managing myself with a payment book and if i loose the tennant call him and he will help find new ones ,,providing if/when i sell i use him he’ll not charge fee’s.
called a mortgage broker,,his advice was don’t take any fixed interest only loan for 5 years,,only take the 3 year if variable interest only if it’s more than 6.99
otherwise looks like i should bite the bullet,i don’t think i can do much more now,,,
anything i’ve missed or should contemplate,,,
the only thing i can think that i’ve missed ,,is take the 105% ,spend the reno money and try learn how to do a wrap,,
Mel ,thanks for your time,thoughts and advise anything more?????????
Paul

[scruffy1837Member@scruffy1837Join Date: 2002Post Count: 12]

January 23, 2004 - 3:43 am

Hi Mel,
thanks for ur response,,one main concern is that it’s 3 hours away from Melb. and my mind is telling me,,
1 with all these top gun investors around scouting everywhere how did we manage to find this place,
2 being 3 hours away leaves me over a barrel
3 if i try manage it myself ,refer to concern #2
4 it’s not like a stock where there’s always a buyer,
5 it must be a dud refer to concern #1
6 this could quickly turn into a flee
So this is the torment my mind is giving me,
Paul