30 properties before 25, finance???

Use two properties as security for one loan.

Because they're probably not buying IPs that cost a lot to hold – ie. they're not highly negatively geared.

Cheers

Jamie

Pick up the phone and call. Its as simple as that.

Valuations cost from $200 to $400 for a residential property, but it may be free if you are on a professional package. Results can be disputed – but this doesn't mean they will change it. What you need to do is to gather evidence on similar properties that have SOLD recently.

hmm… I am still thinking we still have a lot of cash to maintain it for longer term. 
because once interest rates going up, the loan payment will going up as well, at that time the rent might not enough to cover it. 
If we can't cover the payment – we still have to sell the IP. If the prices stagnant or decreasing and no capital gain made – then i already suffer losses from the interest and expenses ( entry and exit ). Is that correct ?

Sorry, i am a newbie. I buy property to live not for investment. However i am really interested to try it as an investor.
Just wanna make sure i am gonna do it right and advice from prof and experienced investors are the best! 

thanks,

wiwin
 
   

its not that hard either!

Hey there,

I always have people ask me questions on how to do it and some while ago I made a blog about it on my website which I will cut and paste the bulk below.

There are many ways to make money out there, however property is a vehicle and I personally have a system that works for me, almost bullet proof, recession proof and has all the upside with minimised risk. Best of all its in line with my lifestyle because at the end of the day its all about the lifestyle.

Disclaimer,
One should always get the correct advice and speak to relevant parties for their own financial decision befor taking any actions.

How can you go from a small savings to owning 10 x properties on a $50,000pa income?

Before we divulge into specifics, understand that this is an example and does not constitute as financial advice. One should seek industry professionals such as solicitors, accountants and finance representatives.

Now let’s take an example scenario where we have a single person call them Sarah for the exercise and Sarah earns $50,000pa as a office support (Pretty consistent salary in the market). Sarah has $30,000 saved up and doesn’t know whether to buy a new car outright, go overseas for a year or…. buy a property (HOW CAN SHE BUY 10?)

Well it all comes down to having the foundations right and having the correct strategy. Sarah gets wind of different properties and specific companies which all say to negative gear because its good and she will save tax. However the drama is Sarah doesn’t pay all that much tax and the property will be eating into her lifestyle of $10,000pa or $200pw. She cannot get her head around what all these spruikers are on about with $10,000 expenses it seems absurd. and to be frankly it is! Negative gearing is a term spruikers use quite commonly to justify losing money. For an investment strategy you must understand why your investing and how your investing can get you towards your end goal.

Sarah decided she would develop a property investing strategy which would work for her and she used the same methods as B Invested uses which is buying properties below market value so she will have instant equity to help her into the next one and a buffer of safety in case she needs to sell at a fire sale she won’t be losing her money. The second principal being that it must be as close to cash-flow positive as possible so she doesn’t lose her lifestyle she currently holds and the ability to continue to sip on a chi latte with her girlfriends. The third principal is she buys bread and butter not, not only because it serves with a solid exit strategy having more buyers but that it also has great potential of going up in value because of its low starting point ensuring capital growth in the future.

10 properties is around 3 per year for Sarah and how can she do that?

Well each property she is setting out to purchase is around $200,000 and renting around $300pw. The reason of this is to keep her portfolio relatively neutral geared. Some are slightly negative and some may be slightly positive such as regional’s etc…

If she has a deposit of $30,000 and buys property # 1 using 10% deposit and $10,000 for closing costs she has achieved 10% of her goals.

She then either needs to save up some funds from work, get a second job, or…. because she bought well with the first property she can extract her capital back out.

This will look like this…
Purchase price $200,000
Revaluation price $240,000
Top up loan 90% or $40,000 = $36,000.

Therefore she has even more money and she can repeat the process again.

After that she has property # 2.

Repeat the process over and over again.

What now? She has 10 x properties and wants to retire 5-10 years after her first purchase.

Sarah has a couple of options.
Firstly, her properties have doubled in value and she had $2,000,000 purchase prices ($200k x 10) and now they are worth $4,000,000 or 10 x ($400,000). She can sell down half pay off all her debt and be owning 5 x properties outright

Secondly she could increase her rents by $100pw (remember rents should double or go up $300pw) each and this will be $100 x 10 = $1000pw positive cash-flow as her expenses stay relatively similar. So she has still made $2,000,000 equity and also an income stream of $52,000pa.

Thirdly, she could sell down a couple renovate a few, add a granny flat or manufacture extra growth.

There are multiple options available however without getting the strategy downright first it would be impossible to get the right portfolio which will get her closer to financial independence and improve her lifestyle instead of getting her more enslaved into her job.

There are multiple ways of making money in real estate but firstly start treating your investing like a business. McDonalds, Bunnings, Wollies, Coles, etc… They don’t go and open a new store to go and lose money do they? They spend time researching, and understanding their markets and the figures before taking a stake and setting up a store. Why wouldn’t you as an investor take the time and research to ensure you are making the correct decision.

Good luck!

© binvested.com.au

Hope this helps in a couple of sentences clarify an option of doing so.

Nathan.