- FrugalOneMember@frugaloneJoin Date: 2010Post Count: 16
Hi All – Just after a few opinions as to where to go from here. I have a bit of an idea but am open minded to new ones
Ok, I spent the last 4 years going from in debt, next to no assets and working from pay week to pay week, to completely changing my way of thinking and learnt a LOT in the past 4 years. Whilst I can see things that could've been done differently to be in a better position now, hindsight does not bring regret for me in any way. I am happy with what I have achieved but am HUNGRY for more! I am not going to make any quick decisions as where I am now I have EARNT and NURTURED instead of being handed it!
I have one investment property purchased last year for $230000 getting $280 per week – costs $50 or so per week considering ALL known expenses so far. I am currently searching for the next investment property around the $200000 mark. My estimates so far show it will likely to be slightly negatively geared – $20 per week at current figures. I have pre-approval and am actively searching for the next property. I am employed full-time in a trade where skills are in demand and have no worries about future employment – I don't earn a great deal and this is generally the case across my trade.
Ok, this is where I am after a bit of advice.
After getting into the second IP, I shall have roughly $90000 or so in cash/shares still. Parking the $ in cash/shares is a temporary thing as in my opinion due to leveraging ability of property, my $ are MUCH better off in property. So I aim to direct the $90000 into property – at the right time and in the proper amounts! But how? What should I do? I can see the benefits of positive gearing and how they allow property after property to be purchased – I have considered university stlye accomodation – the problem is at the moment I don't have the borrowing capacity to allow me to get into one of these properties (in my area) – keeping in mind one my options is to park the $90000 into the first property to gain equity to help me borrow for the 2nd university style accomodation property – is this possible and a good idea? I have considered redevelopment possibilities, and subdivision possibilities. I have considered purchasing the second property and placing all (or part of) the funds split evenly between the soon to be two IP's to gain equity. How much equity must be in a property for lenders to consider lending against it? How much equity can be released? The thing is there is no BEST answer – and that's the problem – I'm a bit of a procrastinator – not as much as I used to be 4 years ago…but still
I suppose it comes down to my ultimate goals, and I realise this post is a bit scattered – it should be indicative of not knowing exactly what to do and showing some of my thinking! If you were in my shoes, what would you do?itsandrewParticipant@itsandrewJoin Date: 2007Post Count: 294
I reckon you nailed it yourself when you said "I suppose it comes down to my ultimate goals".
So … what are your 'ultimate goals' and what's the best way to achieve them? Do you want quick cash, capital growth or passive income? What level of risk are you comfortable with? How much time and energy do you have? etc.
I'd like to ask others … if you had a spare $90k what would you all do?
Go as far as you can see and you will see further.