All Topics / General Property / Any adviice?

Viewing 19 posts - 1 through 19 (of 19 total)
  • Profile photo of basilbasil
    Participant
    @basil
    Join Date: 2006
    Post Count: 26

    Hi there anyone…

    I am a new comer to this site and to the Steve & Dave show. I am still reading my way through ‘From 0-130 Properties in 3.5 years’, and already I am completely convinced that this is the path my family needs to take.

    I have never jumped quickly into anything before, however this does not seem frightening at all – in fact it all seems to make perfect sense.

    I just don’t know how to start, or if in fact we can. We are currently in our own home owned by the bank of course – but we are considering renting it out (unfortunately – negative cashflow), and using the equity in the property to purchase our first positive cashflow property – if we can find one!.
    We do not have any money saved, but do have our spending under control and the banks have said we could borrow up to $200000.
    Does anyone have any thoughts on the matter?

    (I am new to forums in general, and posted this message in another spot also…whoops!)[blush2]

    Profile photo of JarrahJarrah
    Member
    @jarrah
    Join Date: 2005
    Post Count: 99

    basil Hi there!

    I think we will get a group going in Bris, besides that read read and read!

    Oh and ask and you shall recieve!

    Sincerely, Jarrah. Feel free to contact me with any questions you may have…

    p.s. Building relationships is paramount, hand in hand with asking for what you want…

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Hi basil

    Certainly investing in a + cash flow property is a consideration and has benefits when it comes to reducing your own non tax deductible debt.

    What i would say is make sure that the properties are not X collarilised and i also have a preference of keeping the PPOR loan and the IP loan with separate lenders to reduce any liability issues.

    The other important consideration is the entity in which you purchase the IP property should probably not be you as an individual.

    Richard Taylor
    Residential & Commercial Finance Broker
    **Lodoc Commercial loans from 7.39%**
    Licensed Financial Planner
    Ph: 07 3720 1888
    [email protected]

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of ozsparky200319117ozsparky200319117
    Member
    @ozsparky200319117
    Join Date: 2003
    Post Count: 65
    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Sharon

    The ATO make an exception for you.

    Fear not i could not get it through any other way. Also if you do a stretch you now i will come and visit you on visiting days lol.

    Richard Taylor
    Residential & Commercial Finance Broker
    **Lodoc Commercial loans from 7.39%**
    Licensed Financial Planner
    Ph: 07 3720 1888
    [email protected]

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of grossrealisationgrossrealisation
    Member
    @grossrealisation
    Join Date: 2005
    Post Count: 1,031

    hi all
    its interesting reading half a post as I try and work out the question richard answered.
    but lets start with basil first get the structure correct that you are going to use to invest (corner stone) and you can’t do this until you have decide what type of investing you are going to do build and hold, reno, ppor, ip, build and sell all are very different and they all have different structures.
    if you are just starting you have alot of learning so the best place to start is going to a investor group(not a investor club as they are very different thing)and read up on companies and trusts.
    investing maybe seen as a easy thing to do well sorry its not and takes alot of understanding to do it correctly.
    as for posi against neg look at whats called neutral or back to back investing where you purchase a neg and at the same time a posi and they offset each other depending on cash flow this can be very successful
    my .002 worth

    here to help
    If you want to get involved in some of the projects I’m involved in email to [email protected]

    Profile photo of basilbasil
    Participant
    @basil
    Join Date: 2006
    Post Count: 26
    Originally posted by Qlds007:

    Hi basil

    What i would say is make sure that the properties are not X collarilised and i also have a preference of keeping the PPOR loan and the IP loan with separate lenders to reduce any liability issues.

    The other important consideration is the entity in which you purchase the IP property should probably not be you as an individual.

    Richard Taylor
    Residential & Commercial Finance Broker
    **Lodoc Commercial loans from 7.39%**
    Licensed Financial Planner
    Ph: 07 3720 1888
    [email protected]

    Hi there Qlds007 & Gross

    As I am new to the investing scene, what is x collarised exactly, and why is it important to keep separate from the process (I think I can see the obvious reasons for having a separate entity)? The more I learn it seems the more I need to learn!
    I had my IP project start date for next monday, but given I need to learn so much more….

    GR, I have never been to a financial advisor before (my only ever being a slave to the dollar is testimony to this!) and believe they cost a small fortune. Is this correct?

    Also how do you know if they are good at what they do, so that you know the investment is sound???

    Furthermore, do I need to see one – or is it something I can figure out myself in a relatively short period of time? I want to get the ball rolling, but want it rolling in the right direction.

    I feel I have already made things difficult for myself as I am about to rent our PPOR out…we have no available cash at this point to pay for an accounting service, and are spending a ….load on moving into a rental! (equity in PPOR is pretty good).

    If you can give me some pointers that would be fantastic.
    Thank you for anything you have to offer
    Basil [biggrin]

    Profile photo of yackyack
    Member
    @yack
    Join Date: 2003
    Post Count: 1,206

    You said” and using the equity in the property to purchase our first positive cashflow property – if we can find one!. “

    If you search the forums – i am sure you will find your answer. This has been asked so many times.

    Oh – and the book was so 1997-2000. Its not 2006.

    Profile photo of basilbasil
    Participant
    @basil
    Join Date: 2006
    Post Count: 26

    In the few weeks since initially posting this, it’s fair to say that I know there are properties out there, just waiting for me to grab them…but my current knowledge base needs to be expanded.

    As GR rightly pointed out, I need more information when it comes to the fundamentals such as the structure of the business (ie company’s and trusts, etc). Also I need to know what I can do now, even though I have NO cash supply. There are opportunities out there for me and I want to be amongst it.

    I’ve got some great ideas, but need a little help on the establishing a business front, as well as financial advice (and the rest).

    Cheers
    Basil [biggrin]

    Profile photo of Mikey PMikey P
    Participant
    @mikey-p
    Join Date: 2006
    Post Count: 86

    Basil
    You might have to spend some money and go see an accountant. They will give you the fundamentals and set you right with companies/family trusts etc…..
    Once set up, the rest is down to spirit, advice and being totally responsible for your position in life today. Remember every investment is a risk….nothing is guaranteed, but as some wise person once said “You’ve got to be in it to win it.”
    Cheers
    Mikey.

    Profile photo of mapleleafmapleleaf
    Member
    @mapleleaf
    Join Date: 2005
    Post Count: 51

    Basil

    Good luck with your Property Investing efforts. I hope this reply gives you some ideas of things to work on now so that you are ready when that first deal comes along!

    A few things to start working on include:

    Set up a Structure. Find an accountant that has experience in Property Investing and set up a structure to protect you. You will want this in place sooner than later. The accountant will also be able to provide you with your resulting ABN.

    Register as a Business. This also costs a couple of hundred dollars for a 3 year registration (you can pay on a yearly basis as well) and can be organized through the Office of Fair Trading. This allows you to call yourself a business and enables you to use a business name!

    Set up a business email account. This will keep Property Investing separate from your private life. It also gives you credibility.

    Get business cards. People will need to get in touch with you and it makes you look professional. Do this AFTER you have registered as a business to ensure you get the business name you are after. A good place to get affordable cards is on the website http://www.vistaprint.com.au.

    Get Organized. You will need to keep track of the transactions you make with people including contact details, dates and details of the interaction. We do this with a spread sheet and my husband has done a brillant job at creating a system that we update with every phone call etc. Avoid writing everything on scraps of paper – get organized now to make it easier later.

    Start networking. It has been said over and over on this forum that you just need to get out there and start talking to people. The REAs in your target area are a great place to start. Tell them what you are after, send follow up emails and focus on the REAs that are open to you. Put out some advertising about what you do or the investments you are seeking.

    It is impossible to know how to do everything in the beginning so enjoy the learning curve! It is exciting, enjoy the challenge ahead!

    I hope this helps give another spin on how to get started…

    Mapleleaf

    Achieve the Dream!

    Profile photo of basilbasil
    Participant
    @basil
    Join Date: 2006
    Post Count: 26

    Great information Mapleleaf!

    Do you know anyone in Bris that could help with my financial questions and do I need to sell the car to pay for the advice?

    I really want to get started now…deep breaths basil!!! [glum2]

    I know it will work out in the end, and thank you again Mapleleaf.

    Basil [smiling]

    Profile photo of ryanntryannt
    Member
    @ryannt
    Join Date: 2006
    Post Count: 3

    Basil,
    I know you said that you are short of cash at the moment, but why are you going to rent out you’re ppor? As you said the moving will cost you money. I know Gross said to try to keep the properties seperate and not cross collaterilised, however you may have to get started. I’m only new to the +ve cashflow industry also, but we have one and are looking to the next step. Good luck in your path to success.

    Ryannt

    Profile photo of basilbasil
    Participant
    @basil
    Join Date: 2006
    Post Count: 26

    Hi there Ryannt & welcome to the thread!

    We decided to move closer to work and children’s school. The costs we will save in travel combined with the rental income we will receive on our PPOR almost balances the rent we will be paying. The time we save will be enormous though [thumbsup2]. But with bond, and doing the odd fix up on our place in preparation for tennants, as well as waiting for a tennant to move in, loss of first weeks rent to the agent, lessor insurance, break fee for internet connection transfer, etc (costs we didn’t account for [blush2]) we are now totally cashless!

    If I had have realised a few weeks ago, we would have postponed…no regrets though…just knowing that we don’t have to do the two hour car trip to pick up child from school is enough to make me joyous. After all, time is valuable too!

    Whilst this is a temporary set back (highly optimistic), it means that plans are on hold to talk to any knowledgable financial person, which subsequently means I can’t get going on the IP wagon yet.

    Basil [biggrin]

    Hmmmm, good things come to those who wait (for a little while then take affirmative steps to achieve their goals).

    Profile photo of crushercrusher
    Participant
    @crusher
    Join Date: 2002
    Post Count: 186

    Hi Basil,

    Property investing can be lucrative but it is very complex (if you want to be successful). There is never a formula that perfectly suits everyone because everyones’ situations and mindsets are different. I suggest you talk to an accountant that is a multi-investment property specialist because it is very important to build on the right foundations. Starting up a company or trust is not always the best thing to do when your starting out, it really depends on your situation and goals. If you do set up a company or trust you need to know the reasons why and be able to implement all of the other strategies that go along with it.

    You seem to focus heavily on avoiding paying a decent amount of money for a good accountant but this to me is an important foundation and critical investment. My accountant is a property specialist and has made sure I set things up right according to what I want to achieve. He has saved me tens of thousands of dollars. His charge is minimal compared to that… but please don’t tell him because might put the price up [biggrin]

    Anyway, I am almost certain that there is a way you could get started but please do not underestimate the amount of traps there are and the amount of knowledge you need to acquire, before you can be successful with property investing.

    Todd Burns
    http://www.freepropertyhelp.com.au

    Profile photo of basilbasil
    Participant
    @basil
    Join Date: 2006
    Post Count: 26

    Hi Crusher

    You are totally right.

    I realise I need to pay the bucks to begin with, however it will have to wait until we have some bucks in order to pay it out again[blink].

    This is only part of my query however. I am also after recommendations as to who in Brisbane would be good to speak with. I have heard tales (probably tall, but never-the-less off putting) where people get given shoddy advice and end up suffering financially because of it.

    So if you know of anyone that you would be happy to recommend, that would be great. Then when the money is there, I can organise to meet with them…looking forward to that moment.

    Basil [biggrin]

    Profile photo of crushercrusher
    Participant
    @crusher
    Join Date: 2002
    Post Count: 186

    Hi Basil,

    I understand your situation. I cannot help you with a Brisbane accountant contact because mine is in Sydney. But somewhere on a recent forum post I saw someone else asking for the same thing so maybe you could search for the response that they received.

    All the best…

    Todd Burns
    http://www.freepropertyhelp.com.au

    Profile photo of basilbasil
    Participant
    @basil
    Join Date: 2006
    Post Count: 26

    Thanks again Crusher
    I’m all over the old forums like a rash now!
    Basil [biggrin]

    keep on smiling

    Profile photo of ForkliftForklift
    Member
    @forklift
    Join Date: 2003
    Post Count: 21

    Hi Basil,
    You have probably got a lot of info to go through already but maybe this might help, or at least reinforce what others have written.
    I am talking about the “obtaining advice” part of your education.

    You do need to have a good accountant in tow and of the type stated before, particularly by Crusher. He is right.

    The other is to have a good Financial Advisor/Broker. Most of these people do both advise and broker the finance needed. As with mine, most (if not all) Finance AB’s do not charge you but rather get their reward from the institution that you end up getting your finance through. It is so long ago that I am having trouble remembering but we may have paid something like $100 for the first consultation, of nearly 2 hours, but since then we haven’t paid him one single zac!!

    This is called building your “Team”. They are not actually employed by you but are called your team. A good one of each: accountant, finance AB, reliable & trustworthy RE Agent. These are the main 3.
    Obviously, the best way to find good people is by referral. You are asking here and that is good but also ask around your friends etc., if possible. If you can’t get referrals then you will have to investigate a few of them yourself. You should be able to do this mainly with a phone call initially. I am sorry but I can’t help with any Brisbane accountants but I may be able to with a Finance AB. What suburb of Bris are you in? You can just PM me the answer if you want a little privacy.

    Regards,
    Forkers.

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