All Topics / Help Needed! / MY PLAN TO CREATE INCOME. PLEASE MAKE AS MANY COMMENTS AS YOU FEEL NESSESARY

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  • Profile photo of jamiedellamjamiedellam
    Participant
    @jamiedellam
    Join Date: 2004
    Post Count: 36

    this is my plan
    i have about 450k after i sell my house. I have a bussiness loan (boost juice) for $240k which is seperate
    I want to invest my 450k into property returning 7.5% thus i can make the property cashflow positive by putting down a 25% deposit for each one. So i should be able to purchase 1.8 million of property without having to make a payment.
    How does this sound? I am the only one of me and my friends/ family who agrees/understands this plan
    I currently own and live in a nice house in atwell waters but i want to sell to to finance the above plan.
    From my research i think the best places to purchase quility property return 7.5% plus would be in high rise apartments in new zealand. Any information or advice anyone could offer would be greatly appreciated

    Profile photo of v8ghiav8ghia
    Member
    @v8ghia
    Join Date: 2005
    Post Count: 871

    Good on you for planning ahead. However make sure before you sell up you think of the following little sentance – 'Its hard to arrive at your destination unless you know where you are going'.  If that is all taken care of, I don't know about high rise apartments, but good old 'Unzud' does seem to have steady growth, and the biggest advantage of course is NO STAMP DUTY!  (Just calculate stamp  duty  on 1.8 mill of property in Aust and you will see what I mean)   You would have to have the property capital value increase  by a much larger percentage here than in NZ to make up for the usual tens of thousands of dollars the government rapes form both home buyers and investors in stamp duty. Don't rush into anything, but your idea sounds good. All the best with your journey.

    Profile photo of kellylockkellylock
    Member
    @kellylock
    Join Date: 2007
    Post Count: 60

    How do you get loans for all that property???

    Kelly

    Profile photo of jamiedellamjamiedellam
    Participant
    @jamiedellam
    Join Date: 2004
    Post Count: 36

    getting loans for all of that is the easiest part aslong as the lender doent mind the propety being in new zealand. If you have a good broker borrowing money is never a problem. I got my girlfriend ( now my wife) a loan of about 200,000 to build a house and she didnt even have a job.

    Profile photo of redwingredwing
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    @redwing
    Join Date: 2003
    Post Count: 2,733
    jamiedellam wrote:
    getting loans for all of that is the easiest part aslong as the lender doent mind the propety being in new zealand. If you have a good broker borrowing money is never a problem. I got my girlfriend ( now my wife) a loan of about 200,000 to build a house and she didnt even have a job.

    That sounds as interesting as your plan, if not, more so..

    Profile photo of Kipper57Kipper57
    Member
    @kipper57
    Join Date: 2006
    Post Count: 252

    Have you thought about keeping the place you have and accessing the equity to purchase your investments?

    Profile photo of jamiedellamjamiedellam
    Participant
    @jamiedellam
    Join Date: 2004
    Post Count: 36

    why keep the place i have it is a discusting investment that if rented would return about 2%.
    If i kept my place then i would have to make extra payments, the way my plan works i shouldnt have to make any payments at all ( although i will have to rent a house here in perth ~$300 p/week).
    Thank you very much for your advice but i beleive selling my house and using the money to make 25% deposits on property to make them return 10%. If i used the equity in my house to borrow then i could not buy as many investments and i would get a negative return. Please feel free to inform me if you think i am wrong as I am the only one who has confidence in myself

    Profile photo of Kipper57Kipper57
    Member
    @kipper57
    Join Date: 2006
    Post Count: 252

    HI it was not advice it was suggestion of a possibility and it seems as though you have explored that possibility and is not an option

    Profile photo of simplesimple
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    @simple
    Join Date: 2006
    Post Count: 237

    jamiedellam

    I have dome some calcs some time back, according to what I got back then, you plan is sound. The only difference in my calculations was that you should buy one IP pay it out completely, and then purchase second and so on. One step at the time. With your deposit you should be able to jump first 1-2 steps.

     

    Basically I was getting picture on the paper that paying IP’s one by one is better dollar wise due to huge savings in interest. As if you take 3-4 loans at the same time your exposure to interest is much higher.

    Got to remember to adjust my calculations to individual specifics like tax, and so on….

     

    Try calculating this scenario and see what you get.

    Exercise 1 : you own PPoR and purchase IP. Pay it out and purchase second, pay it out and purchase third and so on. See what you will OWN in 7 year $$$

    Exercise 2. : you own PPoR and purchase 4 x IP’s and keep purchasing using grooving equity .   See what you will OWN in 7 years $$$

     

    Profile photo of PursefattenerPursefattener
    Member
    @pursefattener
    Join Date: 2004
    Post Count: 217

    Hi Jamie

    Why are you looking at apartments in Auckland ?

    I have an Uncle who owns three realestate agencys there , one in Titirangi and two in nearby suburbs and they are selling apartments from time to time . They invest in plenty of property but not apartments FWIW

    With the capital that you have why don't you look at a commercial property ? Should be able to get something with a better yeild than 7.5% I'd reckon ……with less headaches…….

    My thoughts

    Profile photo of jamiedellamjamiedellam
    Participant
    @jamiedellam
    Join Date: 2004
    Post Count: 36

    ive thought of commerical aswel. But the problem is if you have only one tennent.. eg a hardware store and the tenant leaves.
    Would you recommend several small offices? or a large store like big w or something

    Profile photo of jamiedellamjamiedellam
    Participant
    @jamiedellam
    Join Date: 2004
    Post Count: 36

    simple: thanks for your inout but your plan does not enable you to buy all the properties at one time. Why wouldnt i purchase all properties at one time when it is costing me nothing?… If i am wrong please let me know

    Profile photo of jamiedellamjamiedellam
    Participant
    @jamiedellam
    Join Date: 2004
    Post Count: 36

    simple: thanks for your inout but your plan does not enable you to buy all the properties at one time. Why wouldnt i purchase all properties at one time when it is costing me nothing?… If i am wrong please let me know

    Profile photo of PursefattenerPursefattener
    Member
    @pursefattener
    Join Date: 2004
    Post Count: 217

    yeah that's right .  There are different things to be aware of . If you were serious about it then go to a bookshop and buy  'How Investing in Cmmercial Property Really Works" . Read it a couple of times and see if it's for you ….

    Profile photo of PursefattenerPursefattener
    Member
    @pursefattener
    Join Date: 2004
    Post Count: 217

    Yeah It's a bit different isn't it ?

    I'd Suggest going to a bookshop and buying  "How investing in Commercial Property Really Works" . Read it a couple of times and see if it's for you….

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