Hi All,
Just a quick question to generate some discussion. If you had in the bank $250,000 would you:
a) Buy 1 property out right (i.e. no mortgage), thus making any rental profit (deducting management fees, maintenance, etc).
b) Buy two properties with a 50% mortgage on each (deduct the same above).
c) Buy 4 properties with a 75% mortgage
d) OtherAny suggestions and reasons?
Cheers
Adam
[8D]Hi ya
I’d be looking at how I can put the least amount of money in to get the most out of doing the deals.
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BBhmmmm, good questions. Well, Cremin and I would probably buy four places with $62500 deposit on each one. That would nearly pay the whole property off and once it is rented, the tenant would be paying the rest off and there most probably would be a lovely big cache of positive cashflow! I would probably fix the interest on 2 of the properties and have flexible on the other two.
That’s what we would do anyway…
Cheers,
Steph.Work smarter, not harder!.
Hey Gatbe
In the areas that I am looking you could probably buy about 10 IP’s putting down about 25% deposit on each. And with the rent in these areas they would all be +ve cash flow.Andy[8D]
Id go for option “c” 4 IPs, in the long run you will have more assests and cash flow.
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Regards,
Arty.[
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“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)It comes down to personal priority. For me, having quit work, I need the positive cashflow – so would be go for one or two properties (ie low gearing).
Most likely “c”, or any number of IPs at 75-80%LVR that were +ve. If this meant 6, or 11, or whatever number at that LVR, that would be ok.
If one of these is your own place, buy it outright and then use the equity to invest.
Michael
I would try to buy 5-6 freehold properties returning at least 100 per week in rent. 40 to 50K each. Location *you know where*.
The rest of the money to fix them up. Then get them all valued, tenanted, then go to bank with print out of some lovely paperwork from your flash I am Professional Investor software, including pictures, values, figures, pie graphs, as much meaningful guff as you can make – projections, you name it!!! and try to borrow against them for a LOC. Perhaps individually though, because I heard that cross-collateralisation isn’t the go. So let’s say you can borrow 200K, then you can used that as a 20 percent deposit on a million dollars worth of further CF+ve properties…or a mix of some CF+ve and some for Cap Gain…or you PPOR in a cap gain area….which should be ‘rent free’ just about…or 30 percent deposit on some nice commercial property…maybe a small block of apartments or something??cheers- Mini
hehe, which is coincidentally (not!) exactly like what I am trying to do, except with less capital!Take 50,000….buy a house using the 11 second rule. Then Id buy a block of units…with enough left over for a newfoundland puppy
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