Hi All,
I know , we were suckered in. Bought an investment property off the plan, in the red $85.00 per week. This was 7 months ago, still not ready. The bank wont look at us until the unit is ready. Since buying the property, I looked into positive cash flow,,, and wow…. I never relaised the possibilities. I have found multiple postive cash flow propertys but not money to buy them. Any advise would be appreciated.
Sarah
Victoria[glum2]Sarah
Don’t worry too much. Maybe you could see if you can get out of the contract? If not, then you may have to wait for some growth to occur to gain equity. Keep saving at the same time.
In the long run, you will probably make more from this investment than a cheap positively geared property in an outback town.
Terryw
Discover Home Loans
Parramatta
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Which property would you rather own?
Property A: $85 pw out of pocket, but increases in value by 8% pa.
Property B: $30 pw cash flow positive, but increases in value by 3% pa.Just focusing on holding costs for an investment misses the bigger picture.
Shake-the-disease,
I’m not sure which option you were angling towards, but I would always choose the CF+ option. If you do your homework then profits are guaranteed, whereas relying on CG involves taking a chance that the market will behave as you have forecast. And in the meantime you have money going out of your pocket every week.
What do others think?
Good food for thought though – thanks!
Cheers,
Adam
Don’t let life get in the way of living.
Id go 4 capital gain. Each to there own but Im sick of people acting like investing for capital gain is like gambling as opposed to Cf+
Hi
And, of course, another option is to not take any “sides” regarding CF+ or CF- but to see them both as valid investment strategies.
One vendor financing teacher we learned “wrapping” from always told us that we should use the positive cashflow generated from our vendor finance busines to invest in buy and holds with good capital gain potential.
He said real wealth comes from the equity you have in real estate and positive cashflow is a great way to help get that real wealth (equity).
Good luck.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
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I’m with Paul as far as a strategy goes with +CF to purchase IP’s for CG.
Its not the way I’ve done it..but I like the strategy :o)
If your starting out explore options such as the Offset Gearing Strategy..
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorRedwing – can you explain the Offset Gearing Strategy for us?
Thanks
Simon Macks
Residential and Commercial Finance Broker
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0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
<2 posts and both considered advertising> Derek
Fully agree with Paul, Redwing, et al. There is no right or wrong answer to CF+ or CF-. The strategy should depend on your circumstance. About 8 or so years ago, I had the cash flow but not the equity. So I invested in negatively geared properties.
Today, the negatively geared properties have appreciated in value. I have the equity but my cash flow is tied up in the negatively geared properties.
So, now my strategy is to use the equity to secure funding and invest in CF+ properties (WRAPs, lease options, etc).Cheers
Pyramid
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