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I think above everything in investing.
That goes Above finance, structure, loans, estate planning. Is that your investing should make money.
If your not making money, either in lump sums through renovations and developments or via blue chip properties, positive cashflow, rent to buys, upvaluing then the everything else goes out the window (althought those structures and knowledge can help you lose the least amount of money if you do happen to lose money)
What rich dad was explaining was that the 1st plan is to be comfortable the 2nd is to financially free and then 3rd is to be filthy rich.
He tried to break that down into a cashflow position per year.
If you can pay for all your food water rent petrol and some entertainment then you are comfortable for the average Australia that would mean having a net passive income of between 50-100k
2nd was over 200k – 250k
and 3rd was 1 million net per year.
Its also not about the number of properties though because i know people that have sold their entire residential portfolio when they retired and bought 1 – 10 million dollar warehouse that had a net rent of 11% on a 15-15-15 year lease. That investment needed one property manager and that is it.
"All day, we've been chasing the scoundrel with our stolen bitcoins through the blockchain. Around lunchtime (UK), I was chasing him across the roof of a moving train, (metaphorically). I was less than 20 minutes, or 2 blockchain confirmations, behind "Tomas""
They make it sound so exciting. But hes just sitting there mashing his keyboard.
By corruption I mean that if there a very smart computer person that invents the bitcoin and the security measures that surround it. Eventually there will be a smarter person on the opposite side who solves those problems and digitally creates himself a few thousand bitcoins
The titles I'm not 100 percent certain could be split before construction.
The ownership structure would be as follows.
1-2 (party wall) would have 2 different trusts as owners (but same directors)
3-4 (party wall) have same owner
unit 5-6 (party wall) would have the same 2 trusts as unit 1-2 (and the same directors)
i could certainly have the services made available but I have run into a couple lenders that have said that because the driveway/garaging for all 6 units would have to be done at once that they wouldn't lend to build the house.
Thanks Alastair
– servicing without counting the rents wouldn't be a problem.
– so always will be net of gst. (Any comments about how they calculate what your gst impact would be, do they do it individually or have a generic 5-10% etc if using the margin scheme)
– can you explain debt clearance ? Is that just meeting the servicing requirements?
Is that because he could of been seen as "finding" the property to onsell to the current money partner
If no consideration is passed between the two would it still constitute a onsell?
The majority of existing money in the world is digital already. Chequing or paying by cheque is already starting to become obsolete. Then it will be cash after that. A digital currency (even if run by goverment) would bring in billions more in missed tax revenue.
and arnt Bitcoins worth like $800 each or something absurd? The potential for corruption i think is to high with a digital currency that is decentralized.
Wouldn't "and or nominee " work in this situation. Then just assign through your solicitor to the person who is purchasing the property. Or is that just something you don't want to do with a money partner in case they leaving you holding the bag.
1 bed into 2 beds.
Provided you could fund it completely with you smsf no borrowings.
Could also consider if you have external equity available outside of the smsf. Possible Tennant in common or as percentages of a unit trust.
"How can I borrow against a house I don't own?. Will rental income be his income, or mine? "
If he bought your house you would have cash available (which could be seen as better then re borrowing against equity) .. but you would lose your rental income, but also lose the leftover debt on the property as well ( a positive).
If you joint venture with a developer and you have next to no funding then you will find that you will receive very little of the end profit Under 10%. Prob less then that they would rather buy the land off you on some type of long settlement for a year whilst they make all the money.
If you had some funds at all you could try and get a development approval for the maximum about of sites if zoned residential on the area.
and then onsell. You would of maximized the properties value to the best of your ability instead of selling as raw land. but you will need some money to pay for the development application and associated planning fees and auxiliary charges.
Sometimes the best way to maximize the land is just to sell and use the money elsewhere. Without prior developing/planning experience your friend could end up on the wrong end of the stick due to inexperience/getting taken advantage of
By big cost i meant " big markup on cost price".
Down lights is another big cost in multi house developments. You can order 100 down lights from china cheaper then in Australia. Some are quality and some are not, Got to check they comply with aus standards.
With different circumstances you would do different things.
My logic is that if your job hourly rate/business earns more then it costs to hire in labor. Then hire in labor as your better off being at work. If you only earn $25 a hour then diy will be more advantageous. It all depends on where you are at your level of investing. Somebody just beginning might try a lot of DIY and then then start leveraging their time and money into multiple property/renovations or developments at the same time. Which will require trades. I don't think there is any right or wrong answer just where you are at your investing. As hiring trades for a multi million dollar development/renovation ie any renovation project with a end sale of 1 million is really your only option to ensure quality and that it is done within timeframes. Under 300k properties i think DIY can handle. And in between you can use a combination.
I agree with 10 burner that if you can source material and just pay for installation. That you can make significant cost savings. Just the example with the light switches is that you can buy a box of 100 power points on eBay from a wholesaler for $200-$220 which is $2.20 a power point cost… You go ask a electrician for the cost of a power point. Its the cost of them ordering it, holding it, transporting costs and them talking to you on the phone about how much it costs. Proberly ends up close to $10- $20 a PowerPoint.
Intention is to hold the units. Would the end valuation still be net of gst still? If there is no gst being incurred. Even with gst, they have to use your financials to approximately calculate how much gst you would pay don't they? In this say 10k gst per home. – 60k total.
1.69 mil
– .6 = 1.63 mil
x that by maximum lend of 65% (assuming lower amount)
thats 1,059,500
– 228,000 original loan.
= 831,500
– 60000 builders fee
770k / 6 = $ 128,500 approx.
i did go overkill when I said 150k per unit. It most likely will cost around the 130k mark. They are pretty small floor plans. 45sqm slabs double storey 90sqm total only 2 bedders.
Land can be subdivided but it's 3 sets of 2 units. Each unit having one party wall. Ie 1-2 3-4 5-6.
So possible if there's a bank that would let 2 dwellings (owned by same owner) be built
Perhaps trying to avoid it. Due to a lack of loan Servicablity, if his current job vs existing debt isn't enough to support a new loan.
When applying at another bank Re 10 plus years ago. Some banks didn't ask on their loan applications if you were guarantor of any other loans. So you were able to bypass them seeing you had given a guarantee previously. Closed loophole now.
"Is it still worthwhile setting up a company and trust still?"
That's why you should should seek financial advice 1k plus in advice could cost you a lot less in the long run.
A amendment is just a additional annex page that is attached that all parties that signed the original contract sign again. That way you only have to sign one page and not initial another 30 pages.
Say that you want a amendment to the contract. To fix the said items before settlement and if they don't fix them then pull out of the contract. You can offer another offer again, but the vendor might not want to deal with you thinking that you might be fickle and could pull out again. If they are legitimate reasons then pull out. If the owner doesn't want to fix them and it would cost eg 3k to make the repairs. Say that you will do the repairs but have to deduct 3k from the offer.
Gum tree for advertising rentals properties that you are going to self manage. you'll have no problem if you are in CBD Adelaide
If you wish to get your property onto real estate.com for advertising. A company in Adelaide called Latner Properties can do that for you.
Use the fixed term or periodic tenancy provided by consumer and business affairs. You can also lodge the owners deposit there.
Make sure you understand the rental contract and that it is better for you money wise to select – tenants to cover water and supply charges.
Managing one property is fine, when you have a good tenant .
