Hi all,
I just wondered how many people are getting their 20% deposits and 5% costs required from a LOC, or and how many wait until you have saved the 20% $$cash.
Until now we have been using a LOC, but now we are trying to perhaps sell one or two IP’s to raise some funds, and then use that money. Your returns are definately reduced doing a 105% lend.
Any thoughts appreciated,
Del
Hey Del,
I usually pay cash for costs and use LOC for loans. I have also sold down a few properties to free myself up for some more deals with higher returns. The velocity of money is the key for me.Enjoy
AD [:0)]
(Andrew)“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
Hi Del,
You sound like you are where my partner and I want to be in about two years time. We have set this time-fence on the period where we are happy to lend the max we can to get rolling, but after that sub-80% is much more attractive long-term.
Who knows what the future holds though …
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MelHi Andrew,
Thanks for that. As a rule, would you sell before the 12 months is up? Or would you hold off because of the CGT. We have one IP we are considering putting on the market as it’s just positive, which we bought in March for $80,000, did a $8,000 reno and is now valued at $115000-$120,000. After you consider 48.5%CGT it doesn’t leave heaps, but it is still a deposit on the next one with hopefully a better return.
Or would you wait the 12 mths? Thanks,
Del [
]Melanie,
Yes, it’s great at first to just be able to buy some, but when you sit down and work out the difference in return, it makes you stop and re-think.
We’ve only been doing this just over 6 months. It’s amazing what you can achieve, and learn in such a short space of time,
Good luck Mel, you’ll get there quick too.[
]Del
Thanks for the good wishes – hope so!
We may need them because as you say the numbers on buy & hold are a wee bit lean so my partner and I are gearing up to do some higher risk (prefer ‘informed investment options’) small development work first up, ploughing profits into buy & holds. Wise? [
]Mel
Mel,
Sounds exciting.
Who says you have to start at the bottom and work up??
Work smarter not harder, don’t they say??[8D]
Good luck,
Del
Hmm yes – but do ‘they’ invest all their eggs in on-paper property ?!?
What the heck – The Female Frank Lowy of luxury townhouse developments here I come …[
]Mel
Hi Del
By selling in 6 months you will save 25% tax which equates to about $6,000 (rough calcs). If you purchased now do you thing you could make this up?
For example, if you purchased and did a reno I’m sure you could create $6k of capital growth.
If you are not entirely happy with the asset then I would opt for selling and buying something better so long as:
1. You were pretty sure you could make the $6k (e.g. by reno or buying well); and
2. The market where you are investing in has opportunities (no good selling if there aren’t any good properties to buy).Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auDel,
Following on from Stuart, what is the likelihood that it could jump another $5k – $10k in the next 6 months? I agree with his summation of CGT saved, but whatever you were buying would need to
a) make up the $6k lost in CGT – plus
b) make up any selling costs – plus
c) grow at least the same amount over the next 6 months as this one would have grown.Personally, I wouldn’t be “jumping” too quick without having a good crack at answering a thru c.
Benny
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