Hi,
This is my 1st post here so I will take a bit of time to introduce myself and my current investment situation.
My name Is Rhys (Reece pronounciation), i am 22 year old bricklayer currently self employed with 3 employees. I am engaged with my fiance still at university, as a full time student (studying development and sustainable living)I am very interested in property and i know this is the industry i want to set myself up in, in the near future. I have recently bought my first unit off the plans in redcliffe for 220k with the FHOG i am still oweing roughly 210k. An identical unit to mine sold last week for 252k so i think im travelling pretty in the 7 months ive been here. Though i think what now? What is the next move?
I want to build a portfolio but am unsure what is my best option. So i thought i may as well ask people who have gone through it, and maybe you could share some of your mistakes that you made when you were first starting out. And maybe even some of your success stories?
Just some general information would be very helpful as my parents are hard working people but arent knowledgable about the property market. I dont really have anyone i can ask for advice.
I currently make roughly 110-140k a year, depends how much a push the employees.
I am currently studying nights at tafe to obtain my builders license as my long term goal is to acquire enough equity to build 6 pack units.
Any advice would be greatly appreciated.Good work Rhys. Getting your builders licence will be great. You just need to plan ahead develop a written plan of what you are going to do and when and how. I would suggest you do a lot of smaller projects before bigger ones. eg. 1 house and land x 6 instead of 6 units. Less risk and more flexibility, easier to get finance etc.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi,
Sounds good so far. Maybe try a few straight subdivisions, duplexes, triplexes and see how you go. You may have to wait a little longer for more equity so you can get on with a project. If you have some cash to do a split and can get the materials and labor nice and cheap then you will be sitting very pretty!
Good luck let us know how you go.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHello Ryhs
Congrats on your achievements so far, there is no doubt you will be very successful. From personal experience property development is very risky if not enough homework and funding is in place. I would recommend as you have just recently purchased your unit (which I am assuming you live in) and your business sounds still young I would do the following.
Work at paying off as much as you can on the unit (though if you plan to move out best to keep loan intact and pay into a mortgage offset account – this keeps the tax benefits when you move out and rent) Look at expanding your business – getting you builders Lic is a great start to doing this. Once you have established yourself in your business and cashflow is good start off buying a rundown property (if you can live in it while renovating – all the better from a tax point of you – or structure it as a business expense) I cannot comment not knowing your full financial details. This project should yeild a good profit which you can use either the cash or the equity to start your 6 unit development.
I have seen in the past property developers go under because they did not have sufficent money to start the project and relied on bank lending at high rates, this is all good when you can sell and develop in a short time span, but sometimes the Land & Environment Courts and Council have other ideas.
Sometimes it is worth purchasing a site with DA approval, as this can save you time and money in the long run.
Again Congrats on your succss so far, no doubt you will be a larger player in the near future in property
Anna Kyriacou
AKA Group Accoutants Advisors Mentors
Creative ProActive Innovative
[email protected]Hi guys,
Thanks for your advice it is greatly appreciated, as i know your all probably busy people and get nothing from shareing your knowledge so people like me can benefit. I guess i'll just keep trolling the forums trying to take in as much as i can.
Thanks again
RhysHi Every one,
This is my first post here, and i need a bit of help to understand a basic math. Yes call me Dumb. but help me. I just finished the book Steve wrote about 130 properties. By far this is the most interesting and valuable book that i read. But like every other book, i couldn’t find a simple step one process. It is a great tool to use after buying the property. but for me the only real challenge always been the deposit. and i am disappointed that this book doesn’t mention anything about deposit.lets say, for 20%deposit, you need at least 50,60 —100K. Now if you can save that much money, then you can buy the property. Now for equity to increase you need 3-5 years. and working in a job or business and after living expenses, how many 60,000S or 100,000S can you save to keep going on to buy the property. Even that property is cashflow positive and giving you $50-$60 per week but that is still over 2400 per year,The other option could be to borrow money from other investors, but then Steve wouldn’t show all the positive cash flow to himself .
So you get it I am confused, tell me how to come up with 200,000 to 300,000 every year to put deposit in to property. still that would be 4-5 properties a year, how to come up with 130, I don’t KNOW?
HELP ME
That book was written many years ago with many of the properties being around the $50k mark. Then values boomed so equity of the properties could be used. Steve was also wrapping many properties so was receiving deposits from people. Plus both Steve and his partners were working as were their wives.
These days it may be a wee bit harder. You will need to combine growth of equity and savings to keep on purchasing.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Rhys,
Great name, my son is also called Rhys.
Before you get started make sure that you have the best financial structure in place to enable you to have the most flexibility as well as making sure that you can get all appropriate tax deductions etc. As mentioned it is better to not pay off your present loan as such, instead have a 100% mortgage offset account so that if you move and this property becomes an IP you can claim as much as possible from tax as well as use the money that accumulated in the offset account to pay deposits etc on new properties.
Also make all loans Inerest Only so that you have more money each month to put towards new properties.
Also when you buy if you want your Fiancee to be listed as co-owner you are probably best to have her as a 'Tenant in common ' or have her share as 1% and yourself as 99% owner so ha you can claim any costs on your tax as you are the primary earner at this stage of your investing.Hope this helps, as you said there are lots of good posts especially with regards to the best financial structures.
Cheers
Sonya
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