All Topics / Help Needed! / Tell Me How You Got Started :)

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  • Profile photo of Scott.Dunstan77Scott.Dunstan77
    Member
    @scott.dunstan77
    Join Date: 2010
    Post Count: 7

     HI Guys great site!

    I am a young bloke (22) who is very keen to get started in property investing and build true wealth. What I would like to hear is how some of you people got started and how is it going or the outcome achieved good? Bad? Any advice on books/education and general wisdom for a wannabe property investor will be highly regarded!!

    Cheers and thanks in advance :)

    Scotty

    Profile photo of possumpalpossumpal
    Member
    @possumpal
    Join Date: 2006
    Post Count: 48

    Hey mate

    I bought my first property a small flat for 140K just after my 20th birthday. Lived in it to get the FHOG which was 10k at the time and then rented it out. Waited two years and then bought a old weatherboard house in a good locatition for 190K. Rented it out for a year and now live in it with my gf. Re-weatherboarded and rewired it. Still needs the stumps done. My plan is to pour my money into my homeloan and try to pay it off by my 30th birthday. Unlike others on here I dont have serveral of properties. The way i look at it is if I can own my house by the time i'm 30 then all i need to do is work enough hours to put food on the table.

    Cheers
    Timbo

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404
    possumpal wrote:
    Hey mate

    I bought my first property a small flat for 140K just after my 20th birthday. Lived in it to get the FHOG which was 10k at the time and then rented it out. Waited two years and then bought a old weatherboard house in a good locatition for 190K. Rented it out for a year and now live in it with my gf. Re-weatherboarded and rewired it. Still needs the stumps done. My plan is to pour my money into my homeloan and try to pay it off by my 30th birthday. Unlike others on here I dont have serveral of properties. The way i look at it is if I can own my house by the time i'm 30 then all i need to do is work enough hours to put food on the table.

    Cheers
    Timbo

    Congratulations possumpal you are off to a great start but why aim so low?

    I really do hope your "paying off your homeloan" is in the form of an offset account. It is a steady strategy but it won't let you retire. Wouldn't it be nice to have enough income so as not to work 40 hours a week to "put food on the table" when you could have passive income, take your kids to school, have time to spend with family etc.

    Sorry to be blunt but I can't see why anyone would have a strategy to work for the rest of their life. Food is expensive and if you want to start a family, more so (not to mention teenagers who eat you out of house and home).

    My stories not that exciting. Always liked property but no internet when I was your age. No confidence, knowledge or knowing anyone that had bought property so I did nothing. Fast forward 20 years. Paid off my house (didn't know any better). Bought one property (cross coll- didn't know any better). Then last 3 years buying many properties with opportunity to increase equity.

    Finding different forums, reading heaps and getting a network of friends with likeminded goals was the BIGGEST contributing factopr to me making the move from  one property to many.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hey Scotty,

    I think knowledge is the key. The more you learn, the better informed you become and the less mistakes you're likely to make. Nothing wrong with making mistakes though – we learn from them.

    How I got started
    In late 2007, after being overseas for two years my then partner (now wife) and I bought our first PPOR (three bedroom townhouse in Canberra). At this stage our only aim was to pay off this PPOR as fast as possible.

    In August 2009 my wife brought up the idea of renovating and selling a house. We ended up having a long chat with a Real Estate Agent at LJ Hooker who talked us through the pro’s and con’s of buying, renovating and selling and property investment in general – he also steered us towards some good books . To this day, I don’t know why he showed such an interest in us (giving us two hours of his time) – it’s easy to think that he wanted to sell us property but he actually talked us out of buying then and there. We are forever grateful and make sure we keep him informed of our progress.

    We had our PPOR re-valued and took out a Line of Credit for $50k. This was used as a deposit for IP#1 and IP#2.

    IP#1
    In October 2009 we exchanged on a 2-bedroom unit in Queanbeyan, NSW. We bought under market value – the vendors being desperate to sell because their tenant was a drug addict who hadn’t paid any rent. Renovations were done after exchange and before settlement.

    We spent just over $2,500 on renovations – new kitchen (wholesale price courtesy of my brother in law), tiled over existing tiles in the bathroom, new vanity (free, thanks to my father in law who is a cabinet maker) and new paint. We also did a lot of cleaning…. The property was re-vauled at $40k more than we bought it for.

    IP#2
    In January 2010 we bought a three-bedroom house in Wagga Wagga, NSW. This is tenanted and is neutrally geared.

    IP#3
    In May 2010, we exchange on IP#3. It’s a three-bedroom house in Canberra. The deposit we used was from a Line Of Credit we took out  on IP#1 (after renos, we had $40k in equity we could access). 

    We're now on the search for IP#4 which we will use this years tax return as a deposit.

    During this time, I've also changed careers and have become a mortgage broker. It just made sense, I enjoy everything property related and now I'm able to help others structure their finances to grow their portfolios.

    As for the books, my person faves for explaining the fundamentals are:

    Building Wealth through Investment Property – Jan Somers
    Real Estate Riches – Dolf de Roos
    Seven Steps to Wealth – John Fitzgerald

    There's also a couple of monthly magazines – Your Investment Property (YIP) and Australian Property Investor (API)

    Forums – There's a couple of good Australian ones (this included) that hold a wealth of up-to-date information

    When you're ready to start building your portfolio, surround yourself with an experienced team that will make your life easier. A good IP savvy accountant, a good mortgage broker who know's how to structure finances for IP accumulation and good property managers.

    All the best

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of ducksterduckster
    Participant
    @duckster
    Join Date: 2004
    Post Count: 1,674

    I started at 25 and bought a house for $74,000 with my wife after both saving really hard. I have not lived in the house since it was bought and have it rented out. Then I purchased another in 2000 and sold it in 2004 as I went to university and could not afford the negative gearing when I left university and no one employed me for the last 5 years. Unfortunately that house is now worth about $110,000 more than when I sold it.
    Having become a parent to two daughters at the same time has really slowed me down as I couldn't work the last 5 years and now I am having trouble finding work cause I am 42 years old.
    This means I can only borrow $70,000 max from the bank which doesn't buy much these days.
    So either I have to find a good full time job or remain a non investor.
    Also the ceiling came loose in the house I own and it will cost $1300 to repair plus the foundations of the concrete slab has moved due to the previous owner planting trees too close to the house cost to remove trees $900
    And I also have termite damage to timber in the house so I need to fork out for termite protection /treatment
    Then I have to pay the $18,000 debt I owe the government even though it never lead to a job that might help pay for the debt as promised by the powers to be. "Don't worry about HECS cause you will have a high paying job !" I graduated in 2004 still have no graduate job.
    If I sell the house I will have a capital gain of $200,000 so I will also have a capital gains tax bill.

    Profile photo of rudra_rrudra_r
    Participant
    @rudra_r
    Join Date: 2009
    Post Count: 61

    I’m still very new to the property investment scene but I got into a couple of years back when a house around the corner from my parents place went up for sale. I was 21 at the time and to this date I don’t know what compelled me to go see the place and with a low amount of savings and some equity my in my parents place which they had given me access to, I put a bid down and got knocked back. This started my property itch and from there I just started reading lots of books, forums and magazines. At this stage of my life I was in my 4th year of uni, had just started a full time job and had very little savings behind me (had to pay uni upfront as I’m a kiwi).

    In January of 2009 I bought my first IP which is a 3 bedroom townhouse in Parkinson, QLD. Have to admit it made me very very nervous but it is one of the best decisions I made. I’m now 23 and currently working on a project to convert the upstairs of my parents property to rent out (2 bedroom, 1 bathroom seperate entrance etc.) and hopefully going on to get another IP later this year when the project is complete.

    Profile photo of DWolfeDWolfe
    Participant
    @dwolfe
    Join Date: 2009
    Post Count: 1,253

    Hi all great thread.

    I wanted to buy property forever but was talked out of it by friends (long ago) bought Steve's book when I was a young thing but took a good couple of years to get our first property. We bought in Perth in 2003. Little villa which doubled in value. We lived in that for 3 months. Took us 2 years to buy the next one due to job uncertainty. We had a 9mth old at the time and thought hey let's develop rather than buy our own home.
     
    We always wanted to build units. In Perth when we lived there it was nuts. We were back in Melbourne so in between having that baby and the next baby we built 3 townhouses. We have sold one and are currently looking to sell one more. We also bought a cf+ shack along the way for cheap and have put that on the market too.

    Our next project is a 12 apt block in Victoria which we anticipate will take 2-3 years but will give a very healthy profit.

    We plan to sell 3 out of our current portfolio of 6 so we can access the cash and do some more quick turn around projects to get more capital for the apt block.

    It might take a couple of years but then you are an overnight success. It has taken 6 years to get to this stage. I would say get going! The sooner the better!

    Good books, all of Steve McKnights books. Michael Yardney's books.(just don't buy into his living of equity ideas) Margaret Lomas' books. Ron Forlee's developing books (where is my payment for mentioning this book so many times on here).

    Honestly I have 30+ real estate books and they are all good.

    D

    DWolfe | www.homestagers.com.au
    http://www.homestagers.com.au
    Email Me

    Profile photo of ShelleyVealeShelleyVeale
    Member
    @shelleyveale
    Join Date: 2010
    Post Count: 4

    Hi All

    I found myself a single mum, so I left my income of $80k and invested firstly in myself with knowledge and information on everything
    about property investing. With small amount of money from divorce I purchased my 1st IP not long after (well as soon as I could) I purchased nbr 2.

    In the mean time I starting my own business as a mortgage broker as that seemed a good idea to learn and teach others what I've learnt to help them on their journey.

    Shelley Veale
    Empower Wealth
    42 Howard Street North Melbourne VIC 3051
    http://www.empowerweatlh.com.au / 03 93268900 / 0409508211

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Scotty

    Grab a copy of July 2010 API magazine and you can read about how i got started.

    Richard Taylor | Australia's leading private lender

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi Richard,

    I read it the other day. It was a good read :)

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of IcemaidenIcemaiden
    Member
    @icemaiden
    Join Date: 2010
    Post Count: 1

    Hi

    I have just subscribed to this website after reading the Property Investor Magazine.  I was in awe over Richard's success!  I have a question to ask if I may, we have our 1st property investment and are going for our second.  We are working towards a property investment strategy and are trying to make a decision around our next purchase.  We have seen 2 clear choices and we are not sure which would be better.  On one hand, we have seen a set of duplex's for sale with high rent, and in the same we have considered purchasing a new property to make the most of depreciation, or even a defence housing rent back scheme (or something like that).  We are not sure where to go next.  My accountant has stated we need to have properties that will assist in lowering our tax.  Not sure where to go next – any comments would be greatly appreciated.  Thanks Michelle

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    Icemaiden wrote:
    My accountant has stated we need to have properties that will assist in lowering our tax. 

    That's bad advice. You shouldn't invest in property for tax concessions.

    The choice you make comes down to many factors, one of which is your individual risk profile. What do you feel comfortable with? Defence housing could be an ok option if you're risk adverse and don't mind relinquishing control over your asset. A new property will give you good depreciation but you're likely to pay a premium for it.

    There's no real right or wrong answer – it comes down to what you feel comfortable with. All three options above, in my book, are better than doing nothing….the one you choose is utlimately your decision.

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of DWolfeDWolfe
    Participant
    @dwolfe
    Join Date: 2009
    Post Count: 1,253

    That was a ripper Richard! :) Congrats!

    D

    DWolfe | www.homestagers.com.au
    http://www.homestagers.com.au
    Email Me

    Profile photo of Charles 1Charles 1
    Participant
    @charles-1
    Join Date: 2010
    Post Count: 65

    A good idea to get started is to learn how others have done it- so thanks for suggesting this thread.

    Educate yourself – books, magazines – careful of the seminars especially the Amreicans coming out here

    Good book to start Michael Yardney’s How to grow a Multi Million Dollar Property Portfolio.

    Read magazines – API and YIP have case studies.

    Good newsletter is Yardney’s Property Update – http://propertyupdate.com.au/

    John Edwards from Residex gives good stats http://www.residex.com.au/

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi guys

    Thought I'd bump this post up.

    My story above was picked up by Your Investment Property magazine and features in this months issue.

    It comes with with some dorky photos and funny comments from my wife (well she thinks they're funny!)

    I guess it's one of those "how normal people manage to purchase multiple properties" type stories.

    Cheers

    Jamie 

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of illuminatiilluminati
    Member
    @illuminati
    Join Date: 2006
    Post Count: 81

    picked up by the mag? they read here? or you contacted them?

    I am in the process of getting started.
    I am about to start a career in construction management/project management at the age of 25. just finishing up uni. studied quite a few courses over the last 8 years.

    i am setting up a trust with my business partner soon, and going to be purchasing buildings with renovation potential and developing houses. once i have some better cash flow i will upgrade to some larger developments.

    Been reading and studying property… for as long as i can remember… think i started buying property books 15 years ago.

    Profile photo of Lora4486Lora4486
    Member
    @lora4486
    Join Date: 2010
    Post Count: 28
    Icemaiden wrote:
    Hi

    I have just subscribed to this website after reading the Property Investor Magazine.  I was in awe over Richard's success!  I have a question to ask if I may, we have our 1st property investment and are going for our second.  We are working towards a property investment strategy and are trying to make a decision around our next purchase.  We have seen 2 clear choices and we are not sure which would be better.  On one hand, we have seen a set of duplex's for sale with high rent, and in the same we have considered purchasing a new property to make the most of depreciation, or even a defence housing rent back scheme (or something like that).  We are not sure where to go next.  My accountant has stated we need to have properties that will assist in lowering our tax.  Not sure where to go next – any comments would be greatly appreciated.  Thanks Michelle

    Hi Michelle,

    Are you able to access the magazine online?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Michelle

    Sometimes without being funny your Accountant may not fully understand your position in regards to financing and wealth creation. Sure they may be very good and numbers but buying property and creating equity is a bit different.

    Lora – If you would like to drop me an email i can forward you the PDF of the article.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of thomsonthomson
    Member
    @thomson
    Join Date: 2010
    Post Count: 31

    From my persepctive (as a beginner also) there's basically four stages:

    1.  Somehow get the money together to fund your first property (prob as PPOR but maybe IP)

    2.  Wait (hope) the value goes up in a rising market (various strategies to manufacture equitty can be used as well i.e. reno or subdivision)

    3.  Use the equity gained either as a re-draw/remortgage or as security to buy another property as an IP.  The main aim here is probably for capital gain so might be negatively geared.  You will need to be able to service this loan out of your 9-5 job unless the rent will cover costs.

    4.  Repeat steps 2 and 3.  In a rising market this works fine of course, maybe not so good at other times.  However even in a flat market I would have thought there was still proft to be had in the right subdivision/development..

    thommo

    Profile photo of DWolfeDWolfe
    Participant
    @dwolfe
    Join Date: 2009
    Post Count: 1,253

    Good points there thommo,

    Step 4 I think can be a bit different if you are developing/renoing. Instead of redrawing (as u get maxed out) sell to realize cash profits and then keep going with more deals. It scares me when people are developing and saying "oh well the market will go up anyway" this isn't shares!

    Step 5 – Work for yourself.

    I don't know about anyone else but from what I can see, even if people have made their money they still keep doing something. Whether that is coaching others or development, or mortgage broking (:)) they still keep working for themselves to grow their wealth.

    D

    DWolfe | www.homestagers.com.au
    http://www.homestagers.com.au
    Email Me

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