I have one IP and we are in the process of renovating it (new kitchen and bath and carport and fencing). After the reno’s I would like to keep renting it out for a while (hold)…However I would like to buy more properties but am not sure what strategies are used to snowball off one property. We dont have much equity in it 10% but this will increase after reno’s as will rent….
I have some initial thoughts based on my reading different posts. They are:
1. Put Section 1515 on IP
2. Change to IO loan (currently I+P)
2. increase rent after renos
3. release equity and buy another IPHow do others manage this????
Snowflake
snowballing???
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHere is a definition of snowballing:
http://snowballing.urbanup.com/127100Hi Snowflake,
The process you are referring to has been called ‘leap frogging’ by Peter Spann – in essence what you are trying to do is accumulate property over time by using the income and equity from the portfolio to leverage into other property.
You currently at the initial stages of this process and it is here that the process is usually the slowest/hardest as income and equity may not yet be sufficient for the next property.
My advice is to sit down with a broker and go through your financials so that you know exactly where you stand. They will be able to use current values and incomes statements to determine how much more you can currently borrow, Or, if you cannot borrow more now what you need to do to realise that goal.
You may be surprised that IP number 2 is not as far away as it currently seems.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Originally posted by Nat R:Here is a definition of snowballing:
http://snowballing.urbanup.com/127100thanks for that wonderful link [ohno2]
I’m glad my lasagna is almost ready, im hungry [puke]
(ignores food to keep lookin at newly found site[tongue])still don’t know what i don’t know
[sick3][sick2][sick3][sick2][sick3][sick2][sick3][sick2][sick3][sick2][sick3][sick2]
Who comes up with these type of games?
[sick3][sick2][sick3][sick2][sick3][sick2][sick3][sick2][sick3][sick2][sick3][sick3][XX(]
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas EdisonSorry Snowflake – erm… lets stick with as41!
Go with Derek on this one! While you do that, keep reading keep looking for the next IP, keep doing the numbers! When the time has come where you’ve got the finances, you’ll know it and then you go to the bank and let them know that you can borrow the money – it just up to them how much they want your business as to how good a deal they offer you. You can then let them know when or even If you want to take their offer.
And that is soooooo much more fun!Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas EdisonThanks Nat
Just about wet myself laughing when I opened the link..this post belongs on Forum Frolic
I’d heard of a snowdropper before..but not snowballing
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorI have just had my cereal with a really nice soy milk and you do this to me, arghhhhhhhhh!!!!!![puke][puke][puke][fart][fart]
Where do people get these sick ideas??
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Hi Snowflake,
There are several ways you can leapfrog and you have mentioned some thoughts on how to do so. When I started investing I fell into gaining equity in property in that whilst I held the property thre was a big upturn in values thus gaining instant equity. At present the property boom is over and prices in some areas have stabilised or even fallen/This means being more creative in what you do and some of the methods you have mentioned is certainly ways of increasing your equity.At present for me I have good equity but little cash flow so I’m looking at buying cash flow positive properties which I might have to sacrafice capital growth to purchase.This is my current strategy but others will have totally strategies which are suited for them. All you need to do is find the strategy that is right for you. Good Luck. MartinThere are 3 types of people:1. People who make things happen.
2. People who watch what happens.
3. People who wondered what happened.Originally posted by Brisbane 04:. At present the property boom is over and prices in some areas have stabilised or even fallen/This means being more creative in what you do and some of the methods you have mentioned is certainly ways of increasing your equity.
The Property boom is over ??[blink]
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorLooks over to me.
Booms generally finish when there isn’t a skerick of value left. Where is the value when average people on average wages can’t afford a home, and people can rent for half the cost of buying.
Will be good buying again in about 8 years. Just like the last cycle.
Good luck.
Hi Redwing,
I was merely making the point that ever since there has been a real slowdown in capital growth which in my opinion has been happening for the past few years equity building using this method has virtually gone ie the wait and hold strategy.I agree with you Bob and will be looking at investing in Australia again when it becomes more affordable.There are 3 types of people:1. People who make things happen.
2. People who watch what happens.
3. People who wondered what happened.What can i say?[sleepyanim]
D&L Property Projects NZ Ltd
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http://www.nzproperty.orgDon Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
The boom over, but bargains galore can still be found for the smart investor.
Never be afraid if it needs new carpet, tiling or painting. These are your opportunities to turn a suspect into a prospect. The potential there is often overlooked and where you see it others fly by.
So if you are twiddling your thumbs, dont.
We are looking at adding cashflow into our portfolio by adding air conditioners to 6 townhouses and 4 houses. Sure its capital improvement but for the $1000/property average you get a $10k val increase so whats the prob.
Go forth and rectify!!!
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Values on My IP’s are still going up as are my rents, the median price in the area went up 4.4% over the last 3 months.
There are still areas out there doing well Capital Growth Wise in WA or NT
Someone once pointed out that you may be able to ‘ride’ the property cycle as it travels Australia
I believe that as values peak in regional areas in WA, City values will rise again as per the “Reverse Ripple” theory..I see that the time frame to build a new house has been extended to 18-24 months and they are ‘fast tracking’ some trades..There’s a message there and possibly opportunities as well?
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator
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