Hi everyone, i would just like to say that i love this site it is the most helpful place to be.
i feel that everything we have done so far is wrong. or not excactly wrong but not quite right either.at the moment we have our mortgage and investment together in one loan. shouldn’t we have split them for interest only on the investment and P&I on our home. the finance company we went through last year wouldn’t split but when i rang them this morning now they will.
even though we are cash positive on the investment there is nothing on paper to prove that. do you think that will be a problem when applying for more equity to purchase another property.
there is so much to learn and i’m ready. felt like an emu for tooooo long. lol
once again thankyou very muchp.s. i hope no-one minds me asking all sorts of questions and they probably wont be really intelligent one’s until i learn more.
thanks again and i’ll just sit here reading and wait. lol
karenHi,
Thanks for your feedback.
This site was created in the hope that messages such as this one would be written.
Investing is not an outcome, it’s a journey.
When you feel like you are beginning to be re-educated and having your boundaries challenged then you are on the verge of a significant breakthrough.
It’s just an issue of when you find this site. For instance, I received a call today from someone who has just purchased a property for $237k that rents for $270 per week.
The caller wanted some advice about how to build wealth through property.
It’s a pity they didn’t call before buying.
Karen, work through your finance issue by talking it over with them directly. It doesn’t matter really what I think… I’m not the finance company.
One word of advice though… you are in control, always!
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi steve and thankyou very much for you reply,
oh boy do i feel like i’m having my boundries challenged but it’s the best kind of challenge i’ve had for a long time.
i know that you said that it didnt matter what you think and yes your right BUT i would honestly like to know your opinion on that (split or leave). do we not need to prove that we are cash positive on our investment. we have around $220k equity in both houses but about $150k of that is in the investment one. i’m really not sure what kind of diffence it makes either way (except proof of extra income).
thanks again
karenG’day Karen,
From what you’ve written, it seems your situation is similar to mine in regards to loans – in a structure and security sense, and quantities thereof.
My wife and I had an investment property with quite a bit of equity in it. This enabled us to borrow against it in order to buy another investment property, thus ensuring our house where we live is kept out of the equation. Thus we have 2 loans – one secured by our house, and another secured by two investment properties. These two loans are quite separate, and independant of each other.
For what it’s worth, our plan is this :
Once there is enough equity in both investments properties to satisfy the bank, then we will split the investment loan – create two new loans, each secured by one investment property, again being independant of each other. This will allow us to “double” our chances of refinancing again to release some equity for yet another deposit on another property…. It also allow us to even remove the oldest property from the loan altogether – effectively paying it out ( and formally getting the title in our hot little hands ). From then on, no-one can take it away from us no matter what happens.
This new property will again be lumped in with the one used to fund the deposit, thus again having a single loan secured by two properties.
Then we go again, repeating the above process…
One loan with two properties involved, wait a while, then split to two loans for two properties.This, to me anyway, seems to be a “get rich slowly” type plan. It also seems, again to me anyway, to be a “very low risk” plan. There are “faster” methods of course, and many of them are mentioned on this forum. But with my current family situation ( 2yo daughter, another on the way, only one income for a while yet ), I am not prepared to take very much risk at this stage.
As I mentioned earlier, this is my plan. Other peoples plans will be different….
I hope this helps,
BDM
Hi,
You could split them which would be advantageous from the perspective of maximising your interest deduction on your investment loan (since you are not paying any principal).
Why not? Unless the cost of swapping over to this new loan meant that there was little benefit in doing so.
On another issue… if you own your investment property in your own name, which is probably the case, you might like to get some structuring advice if you plan to acquire more real estate. See your accountant.
Bye
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi BDM
first of all congradulations on impending arrival of new bubs.
second, thankyou for your response and i’m with you on the low risk at this time. i think with what it will cost us to split the loans we are going to wait until we purchase our next property and then we’ll do the split.Why do it twice if were not far from aquiring another one.
i didn’t realise about having to completly seperate loans (one for home and one for invest) and then also splitting the invest in 2.
and i dont really understand why you will eventually split again when you purchase more. hyperthetically wouldn’t it be easier to have say 6 props in one loan and home seperate. am i understanding correctly what you are saying that each time you buy a house you will create a new loan for each one.
i hope this isnt a stupid question but as i said this is why i’m here, to learn.
and i know that everyone does things differently and i feel like such an amatuer (see i dont think i can even spell it) lol.
anyway thankyou so much for your response its given me even more to think about.
karen [^]Hi steve,
we have an appointment with our bank manager in a couple of days just to go through all our finances and then we will see our accountant to find the best option for us that we feel comfortable with. i just needed to know what you thought so thankyou very much.
everyone is so helpful in here its fantastic especially for people like us that really haven’t got a clue but really want to learn. i,m so glad that i found this sitekaren
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