What would you do in this situation

Fivetalents what you are suggesting is sometimes called the 4 pillars approach.

This is where you first acquire 4 cashflow positive properties. This these days is usuallly achieved by finding properties as close to neutral as you can and improving the return by renos and rent hikes over time.

Ok so now you have 4 properties pumping out cash to various degrees. This then allows you to find one growth property which is then neg geared to a similar amount that is generated by the 4 “pillars”. The growth property is then the “roof” on this structure and then you set and forget these five and start again.

As you are getting good cap gains from the “roof” property, you now use this increased equity to fund the deposit on a new “pillar” and start the process again.

Basically the 4 pillars aproach.

Hope this helps.

DD

Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!

Hi I-Girl.
I have 3 cashflow +ve properties. The downside to +ve CFP’s in my experience is that they have a very low capital gain – meaning it can be hard to borrow against the increased equity.
I would suggest you start by trying to find a neutral or slightly -ve property and then do the reno to make it posative. That’s what I have done, but unless you want to scan the country, my experince says this will take time. Heavens, you’re only 41, take you time.

Gerry G.

Gerry G

Hi Island girl

Your situation is similiar to mine. I also have a husband who does not like credit, but he is financially aware.

We also have a PPOR value conservately at approx 700 – 800k paid for, on this we have hubbies business LOC 140k, and an IP -ve with 120k equity.

I also wanted to quit work, luckly I receive and income from hubbies business and I only worked 3 dys a week earning 20-30k per year. Hubby doesn’t want me working, but I would go mad with nothing to do. I don’t play tennis.

I came up with a plan to buy 1 bed apartments, reno & sell. The orginal plan was to make 5-10k per apartment 2-3 per year, build up some capital bank free. I talked hubby into it and…….

Quit on thursday( May 06), Friday I went apartment shopping my budget 200k or under. I found a good one put in an offer with a 6 month settlement (they had just signed a tenant for 6 mths) and to my surprise (In Perths red hot market) they accepted.

On the Monday I set up a disc. trust, put the paper work in to the bank for my LOC on our PPOR for 220k.

Then thought what am I going to do for 6 months, I know buy another. this time I had the cash ready, therefore allowing for a short settlement, I found one which from start to finish took me 4 months. I sold in 1 week, making 32k, my whole years wages in one reno.[biggrin]

The one with the long settlement has increased without the reno at least 30k, I got a seperate 100% loan for this one, using it and my IP as equity, I will rent this out for another 6 months to lessen the tax on the profit. Depending on the Market I will either Reno and Sell or Reno and hold.

So now I have more cash to play with, so I have just purchased another it settles in 2 weeks.

Bit of back ground I am a senior bookkeeper I had my own business, and have worked in a wide range of industries and I am very hands on creatively I do all the work on the Reno’s except elect/plumbing.

1st thing I did when my Hubby and I moved in together was get him to set up his own super fund and purcahase some premises, which we lease to the business.

We settled on an amount we were comfortable with as wages and then we put as much as possible into the super fund. Hubby works the share market with the super fund monies.

do some more research on which type of Trust and wether you set up a company as well, for legal reasons. I do not have a company and I lend the money to the trust. apparently this could leave me open to be sued by creditors in the future.

I have read some stuff in these forums that has prompted me to check things out further.

I did research trusts B4 I went to the accountant he thougth the dis.trust was the way to go.

this is a question to TerryW how does a hybrid trust save on tax?

So all I can say is Go Girl Go!!!![biggrin]

Celeste