Hi there,
One thing that the book seemed to skim past a little bit was how Steve and Dave paid for so many 20% mortgage deposits.
Lets say each house was (very conservatively) $50K, then 20% is $10K – multiply that by 130 houses, thats more than I have in my piggy bank.
Refinancing a paying stamp duty and loan estabilshement fees all the time is not ideal. Plus the book advicates buying for passive income, not growth, so the whole point would be to hang onto them… not sell and use the capital to expand….
Am I missing something?
Cheers,
Victoria
[email protected]Reason can answer questions,but imagination has to ask them. — Ralph Gerard
One way is to buy them under market valuation then get them revalued and using this added capital to fund the next purchase.
One can also increase equity in other ways such as a reno or even just build something like a carport.
This recent market also helps to get the values moving quickly!
This is usually a process not a matter of buying 130 at once!
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Hi Simon
When starting out don’t you need to wait to get your property revaluated? We just purchased our first IP and own (the bank owns most) a unit that we live in, so we have used most of the equity we have. To save 10K in a matter of months looks almost impossible! Any ideas on how we can get back in there in the next couple of months to buy the next IP? Do you think going with a different lender may help as they could value the property differently? I’d love to hear your thoughts.
Mary,
A bit hard to give any advice without specifics…
Are you saying you need another $10 000 equity to draw for the next purchase?
There are a few banks that value only to confirm that your valuation is in the ballpark. I have one banker I use that sent his valuer out again with the instruction to find another $40 K so the next deal would fly!
The best way is to be able to demonstrate a reason why the valuation should be higher ie added an extra bedroom or a carport or done other work.
Don’t forget you have two properties growing for you now!
Going to another lender may help but dare I suggest you find a broker that knows all the lenders well[
]Simon Macks
Mortgage Hunter
[email protected]
0425 228 985mortgageHunter,
that sounds a bit like the white shoe brigade we have on the gold coast,valuers colluding with with the seminar holders, bankers & solicitors
and duping the fly in tourists.
regards, frankMaybe…
It was one of the big four banks and a very sophisticated client.
The five properties concerned were over $1M worth so $40K wasn’t a big call to find.
That wasn’t a very good example – just trying to illustrate a point of how things can be worked out if everyone works together.
I can assure you that this was all above board.
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Hi vik_fam,
Just because you buy for cashflow doesn’t mean that you don’t utilize the capital growth that is being handed to you on a plate! All they needed to do was to sell one or two properties that perhaps didn’t return as well as anticipated, and it wouldn’t be hard to do what they have done in the present market.
You wrote that “refinancing and paying stamp duty & loan estab. fees all the time is not ideal”.
Steve & Dave have made their property investment into a successful business – if you are able to refinance a loan, pull out some cash & be able to buy another property, I’d say it WAS ideal!
You need to fully utilize the “system” to your advantage, which Steve & Dave have done successfully, I would say.
We are all lucky, and we can learn from what they have done. Not all of us want to achieve their success, but there is nobody, who if they put their heart & soul into it, like (Steve [
] & Dave []) couldn’t achieve something great!!That is what counts.[
]Good luck,
Del
Hi
Here are a few ways to get the deposits:
-Wrap- and get the $7000 FHOG as deposit
-Wrap Cashouts – reinvest back into more wraps
-Lease option – Option fees
-Buy under value – revalue and with draw equity
-Buy and add value – revalue and withdraw equity
-Buy under value – borrow based on valuation not contract
-Borrow deposits – offer family and friends 15% pa
-Use credit cards – short term until you can get a valuation to access the equity
-Get seller to pay for stamp duty etc – reduces you upfront costs
-JV partners -they pay deposit
-Work at a good job and save
-Save all positive cashflow and reinvest
and
-A combination of the abovethat is all I can think of at the moment!
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks everyone for clearing that up and the suggestions include many that I have not considered. Appreciate it and could use all the help I can get.
I do use a mortgage broker but (this was before reading Steve’s book) suggested to him that I liked the bank I was with and thought it might be easier (and was) going with them again.
But next time I’ll get the broker to hunt around for me as I have now learnt more (especially in the last couple of days of reading this forum)
Thanks to all who contribute, hopefully I can do the same.
-JV partners -they pay depositHi Terry,
I understood the rest, but this one has me puzzled.
Thanks so much for your advice, as usual.
Cheers,
Victoria
[email protected]Reason can answer questions, but imagination has to ask them. — Ralph Gerard
-JV partners -they pay depositHi Terry,
I understood the rest, but this one has me puzzled.
Joint Venture partners.
Hi vik_fam
I agree Steve & Dave have had deep pockets but it certainly not out of the question. We have ourselves purchased over 100 properties in the past 3 years but now accept that we have run out of deposits. Whilst I appreciate what Mortgage Hunter referred to by redrawing the equity in your property for the next deal he may not be aware under an instalment contract you are not allowed to cross collateralise the loans. Hate to say guys its 20% cash or equity from other non wrapped properties. Remember if you are wrapping you are trying to achieve a sizeable passive income.
Cheers Richard
[email protected]There is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
Why do you need to x-coll? Can’t you just draw a 20% deposit from the growth and then seperately finance the next one?
And you are right – I have much to learn about financing wraps. My expertise has been the refinance when they cash out.
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985
Joint Venture partners.That sounds sweet… how do I find a Joint Venture Partner, other than asking around or holding a seminar![
][^][]Cheers again for all your help
Victoria
[email protected]Reason can answer questions, but imagination has to ask them. — Ralph Gerard
vik_fam,
Why don’t you try with a post on this forum?
Cheers [8D]
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985
]
] & Dave [
]) couldn’t achieve something great!!
]
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