All Topics / Finance / 30 properties before 25, finance???

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  • Profile photo of PaulliePaullie
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    @paullie
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    Sounds easy doesnt it.

    Profile photo of ekghmgekghmg
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    @ekghmg
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    Hi all,

    This has been a great thread. The only query I have and would like to understand relating to Nathan’s post is, when you go and draw back on the equity and take your original capital back, mathematically the property is no longer a positive Cashflow property, ie income = 15,000 (300×50 weeks) and just finance cost is 15,120 (240,000 x 0.9= 216,000 x 7% 15,120).

    Even though you have your capital back and it is effectively no money down, how do you now fund the negative Cashflow position?

    Thanks and really look forward to the response.

    Thanks – Eamon

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Hi Eamon

    That is a very good question.

    Must admit we did it the old fashioned way and that was from our savings or personal income.

    Alternatives these days are to look at using the raised funds to invest in areas / country's or vehicles where the net cash flow is constant or positive.

    We have just started a service due to the demand from clients where we source both UK and eurpean properties for them taking advantedge of the strong Australian dollar and low intererst rates in the Euro zone. We settled a deal last week for a client which was bringing in 12% net so he intended to use this to fund the shortfall on his Australian properties.

    It can be done but admit there can also be some short term pain.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of Ossi89Ossi89
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    Thanks for the great info everyone!!

    Does anyone know how I would go about getting finance to purchase property in New Zealand? I have noticed that there is lots of positively geared property over there!

    I don't plan on doing this until I have a few Aus properties under the belt but would still like to know how it is done. I have ZERO knowledge in relation to this at the moment.

    Cheers,

    Oz.

    Profile photo of Woody86Woody86
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    @woody86
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    HI Richard. How to do you go about getting finance for properties in europe. I have looked into it and I thought you had to be a citizen over ther

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    Hi James

    No that is not the case.

    I recently purchased an investment property in France which is one of the most stable countries in Europe and has the highest number of tourists for any Country in the world. Did this with 100% finance.

    I will be launching my new website shortly so will be able to reveal all.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of Mick CMick C
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    @shape
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    Ossi89 wrote:

    Thanks for the great info everyone!!

    Does anyone know how I would go about getting finance to purchase property in New Zealand? I have noticed that there is lots of positively geared property over there!

    I don't plan on doing this until I have a few Aus properties under the belt but would still like to know how it is done. I have ZERO knowledge in relation to this at the moment.

    Cheers,

    Oz.

    Out of all the O/s investment – NZ purchase is the easiest to finance. The process is simliar to buyign a AUs property + both country accepts each another as “residents”

    Regards
    Michael

    Mick C | Shape Home Loans
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    Profile photo of ferdinandchferdinandch
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    Shape wrote:
    Hi Oz-
    Yes the bank treats equity like cash; but make sure they do NOT x-cross your loan unless you really need to; so

    Hi Michael,

    When usually you really need to cross collateralise your property? Is it the case when you paid off your PPOR mortgage, and need money to invest ?

    Shape wrote:
    Regarding rent; most lenders will only take in 80% …

    I did a simple excel calculation yesterday and used the NAB Borrowing Power Calculator. If we don’t do any renovation or take risk to buy an undervalued property (what we think is undervalued), every one IP worth 320,000, with rental income $320 p/w (80% income taken into the account), will only add borrowing power by $ 130,000. Means that there will be limit on how many properties you can buy, if you don’t significantly add value or market boom happened again ( which is unlikely for the next 3-5 years). I just want to know there is any aspect that I missed.

    I read Nathan Birch’s blog and the explanation how to own 20 – 30 properties on $50,000 income. But it seems, it will only work if the Lady Luck and Mr.Market are always with us (which I know that there is a way to become rich, but there is no easy, simple and straighforward way).

    Profile photo of Mick CMick C
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    @shape
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    ferdinandch -you should only cross if it has a benefit to you and not to simply make the bank happy – note crossing your loans means you are not risking ONE property but 2+

    Example of when cross MAY be worthwhile:

    1. Reduce LMI significantly!
    2. Only way to service/ pass the loan through and another banks are not an option.
    3. Commercial purchases – where there is a massive drop in rates + terms and conditions.
    4. Unique/specialized purchase ( is you think the purchase is worth the risk as well)

    P.s you will find the NAB Borrowing Power Calculator is not up to date and is not the same cal that us broker or the bank credit manger uses anyway.

    Regards

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of TerrywTerryw
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    ferdinandch wrote:
    Shape wrote:
    Hi Oz- Yes the bank treats equity like cash; but make sure they do NOT x-cross your loan unless you really need to; so

    Hi Michael, When usually you really need to cross collateralise your property? Is it the case when you paid off your PPOR mortgage, and need money to invest ?

    Shape wrote:
    Regarding rent; most lenders will only take in 80% …

    I did a simple excel calculation yesterday and used the NAB Borrowing Power Calculator. If we don't do any renovation or take risk to buy an undervalued property (what we think is undervalued), every one IP worth 320,000, with rental income $320 p/w (80% income taken into the account), will only add borrowing power by $ 130,000. Means that there will be limit on how many properties you can buy, if you don't significantly add value or market boom happened again ( which is unlikely for the next 3-5 years). I just want to know there is any aspect that I missed. I read Nathan Birch's blog and the explanation how to own 20 – 30 properties on $50,000 income. But it seems, it will only work if the Lady Luck and Mr.Market are always with us (which I know that there is a way to become rich, but there is no easy, simple and straighforward way).

    I don't think luck had anything to do with Nathan's success. The market has also been down while he has been buying. It must be knowledge and skill then!

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of ferdinandchferdinandch
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    Terryw wrote:
    I don't think luck had anything to do with Nathan's success. The market has also been down while he has been buying. It must be knowledge and skill then!

    I agree with you Terryw, what I was saying is:

    http://binvested.com.au/how-to-build-a-10-property-portfolio-in-3-5-years-realistically-on-50000pa/

    Nathan Birch himself of course has equipped himself enough and made full dedication to this, knowing that he has made real fortune. But for ppl who work full-time with family who barely have time even to achieve life-balance, then expecting them to find a deal, do comprehensive research, travel to regional areas, it is lil bit unrealistic. I mean the example he gave there is lil bit optimistic and sounds too straightforward.

    Profile photo of TerrywTerryw
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    ferdinandch wrote:
    Terryw wrote:
    I don't think luck had anything to do with Nathan's success. The market has also been down while he has been buying. It must be knowledge and skill then!

    I agree with you Terryw, what I was saying is: http://binvested.com.au/how-to-build-a-10-property-portfolio-in-3-5-years-realistically-on-50000pa/ Nathan Birch himself of course has equipped himself enough and made full dedication to this, knowing that he has made real fortune. But for ppl who work full-time with family who barely have time even to achieve life-balance, then expecting them to find a deal, do comprehensive research, travel to regional areas, it is lil bit unrealistic. I mean the example he gave there is lil bit optimistic and sounds too straightforward.

    Its a choice you have to make. To do it or find excuses not to do it.

    There is no reason to go to regional areas  – in fact I would suggest you don't and if you did this wouldn't work as there would be little capital growth. You could do all in that example while working full time.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of Mick CMick C
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    @shape
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    Nathan’s investing style is just ONE form of MANY type of ways to invest (dont get me wrong, i love Nathan’s work!)

    With any investing style you should NOT follow it to the T.

    but rather learn from it and morph it to suit your financial + personal goals.

    I have more then 100+ client who are under 30 who may not have as many IP as Nathan; but outcome/results are the same – Good base for wealth creation ( either from rental yield or Capital growth)

    But be aware in property investing; it’s not about quantity but quality as well.

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of wade anthonywade anthony
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    Something to think about when investing in property is to think business like. When a business/company; spends/earns money it is treated different to a personal income from the ATO

    personal        income – pay tax – spend (bills etc.) – money left
    business/company        income – spend (bills etc.) – money left – pay tax
     
    Get creative, think of different ways to add value renovate, subdivide, add a granny flat, buy a duplex and strata or turn a bigger house into a duplex. There are plenty of options to create equity/value/income.

    Think of how you can use money/loans to create more money/income remember that money used to make money is claimable from the ATO in someway. Instead of using equity and cross collateralizing your property, maybe use a line of credit, it will cost a bit more but taxable if using for investments.

    Take this comment in general and consult your account and other professionals before doing anything. Everyone has different ways of doing things so do what best suits you.

    Profile photo of Woody86Woody86
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    @woody86
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    Thanks for that Richard. I actually googled your name trying to find a site to do some research on it as I recently had a failed attempt at getting a financed property through the US. If your parent is from england does it make it any easier to get it all through ??

    Profile photo of TaylorChangTaylorChang
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    @scha9799
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    Hi Richard,

    can you please also send me the article.

    [email protected]

    thank you

    Taylor Chang

    TaylorChang | Finance Broker
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    Home loan | Commercial loan | 0414 691 517

    Profile photo of Richard TaylorRichard Taylor
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    Hi Taylor

    I have just emailed you the article as requested.

    Sorry Jameswood just read your post.
    Financing in the US is something we were doing a lot of up until 3 years ago when all of the US lenders we were dealing with went belly up (I.e World Savings, WAMU, Indy Mac, Countrywide).
    I am from the UK and Yes you can get finance over there for Foreign Nationals depending on the property itself.
    I returned in late October having spent nearly 3 months in the Uk sourcing and financing over 20 properties for some of my Australian clients.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of TaylorChangTaylorChang
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    @scha9799
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    Thank you Richard.

    I am wondering what structure are you guys buying the property in to buy 40 properties? Trust or Company ?
    especially when someone like Richard and Nathan have 40 properties, wouldn't it get harder to borrow from the bank for the deal ?

    will it harder to get the loan if buying in trust or company than personal name ?

    I heard people using multiple trust to purchase the properties, and banks doesn't required you to show if you are the guarantor for other trust. hence you can get the loan easier if somone run mulitple trust.  ie. If you are the guarantor for Trust A, and you also are the guarantor for Trust B. You are buying the property in Trust A and go to the bank showing them you are the guarantor for Trust A. do you also have to tell the lender/bank you are the guarantor for Trust B  ?

    I just couldn't understand how people can get the finance continuously without hit the finance brick wall.

    TaylorChang | Finance Broker
    Email Me | Phone Me

    Home loan | Commercial loan | 0414 691 517

    Profile photo of TerrywTerryw
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    scha9799 wrote:
    I heard people using multiple trust to purchase the properties, and banks doesn't required you to show if you are the guarantor for other trust. hence you can get the loan easier if somone run mulitple trust.  ie. If you are the guarantor for Trust A, and you also are the guarantor for Trust B. You are buying the property in Trust A and go to the bank showing them you are the guarantor for Trust A. do you also have to tell the lender/bank you are the guarantor for Trust B  ?

    This doesn't work.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of TaylorChangTaylorChang
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    @scha9799
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    if it doesn't work, why people buy property in multiple trust ?

    can someone please kindly explain ? i can't think of other reasons than asset protection to buy property in multiple trust

    TaylorChang | Finance Broker
    Email Me | Phone Me

    Home loan | Commercial loan | 0414 691 517

Viewing 20 posts - 41 through 60 (of 103 total)

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