styla2001Member@styla2001Join Date: 2005Post Count: 1
Hi..i have about $30,000 to start with.im debating to put it into say 3 properties or just the one.What im not sure about yet is how to get the deposit for the next property.Is it reccomended that you put your positive cashflow into your account to save for the next property?As it stands it just seems like it will take along time to come up with the next deposit and so on for further properties,hence not getting a return in your pocket for a while.Or when you have owned these properties for a while is it more common to borrow against these properties?I would be very grateful for any answers available.
Thank you.byronent_2Participant@byronent_2Join Date: 2004Post Count: 337
Have you read any books, attended any seminars, spoken with any investors or done any research at all?
It varies where your get your deposits from…
* Other forms of security (being a security tied to the new investment property)
* Shares (stocks)
* family – friends
Personally were i get my funds from, is from option trading, as in the form of option price appreciation + Releasing Property Equity, in purchasing more property, and repeating the cycle..
the 2 fastests ways i gain cash deposit, are definelty, cash being released from the properties equity, + a very heavy load of option trading that i do.
I have only ever sold one property, to help push and further the momentum of cashflow and deposits.
Though as for serviceability, i do a system that is called off-set gearing + cash deposits that are enough to turn a property positive cashflow, but can be offsetted against negative geared properties..
ps.. i also put some strategies in place, to ensure funds are also available and that can be released almost immediatelyfoundationMember@foundationJoin Date: 2005Post Count: 1,153Originally posted by Still in School:
fastests ways i gain cash deposit, are definelty, cash being released from the properties equity
Please detail this process both for the education of styla2001 and for my own amusement…
What i mean by that term is, drawing a LOC (line of credit) or refinancing that investment property loan, and taking those cash proceeds and using the new cash that is available, as new cash deposits, to purchase the next investment property.
sisfoundationMember@foundationJoin Date: 2005Post Count: 1,153Originally posted by Still in School:
refinancing that investment property loan, and taking those cash proceeds and using the new cash that is available,
I don’t think you’re actually ‘taking those cash proceeds’ at all. I think you are using a percieved increase in value as security to take on additional loan liabilities – yes, yes?shaztazMember@shaztazJoin Date: 2004Post Count: 113
Still in School,
Thank you to people like styla2001 who ask the questions, and people like Still In School who take the time to answer them.
Many others benefit, including myself. Obviously we are all at different stages of learning, and your intelligent answers and excellent information are much appreciated.
Thanks again sis,
it varies from property to property..
if you have a positive cashflow property, with equity, then the extra cashflow, can be used to service more borrowed money, where the borrowed money, can be used as the cash deposit, (but in true reality, your borrowing at a much higher gearing.. more closer to the 100% and over mark.) and with that extra cashflow, it can offset, the extra amount of loans you put against that property.
though in some cases for me, if i purchase a property, that is a steal deal property, it has been better off, using other forms of collateral as security instead of cash.
One other way, i forgot to mention to purchase properties also was, if your a first time, you can purchase a first home on FHOG and then turn it, into an investment…
** this is something, i have also done, very minimal out of pocket expenses, and minimal legal costs..
sisPropertyGuruParticipant@propertyguruJoin Date: 2003Post Count: 1,502TerrywParticipant@terrywJoin Date: 2001Post Count: 16,190
If you can keep coming up with the deposits, you can always find finance.
Others have also used:
– deposits received from wrapping
– option fees from selling options on the proeprty
– personal loans (not good, as the rates are high and amoutns limited)
– credit cards (Oh no!)
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