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

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  • Profile photo of worldinvestorworldinvestor
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    @worldinvestor
    Join Date: 2011
    Post Count: 297
    Shape wrote:
    Ossi89 wrote:
    Hi, this is my first post on this site (I only joined 30 minutes ago). I am 21 years old, live in Sydney and have just bought my first investment property in Orange, NSW. I keep hearing stories about people under 30 on average incomes who have over 30 investment properties. My property in Orange essentially pays for itself so I would love to buy some similar properties. How do these people continue to get finance approved? (I realise this is a very basic question but I am trying to learn as much as I can as quickly as possible, any tips would be greatly appreciated) Thanks.

    to be honest- it's not about getting as MANY properties as possible….it's all about the strategy and overall "plan" I have clients who only has 3 IP and there "overall worth" in term of capital growth and rental yield was far more Superior compared to another clients who has 10 IP…. Regards Michael

    How true, many focus on number of properties but we know it has more to do with equity and cashflow.

    Cheers WI

    Profile photo of Shell HShell H
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    @shell-h
    Join Date: 2010
    Post Count: 32

    Classic Dubstep!   Love that packaging – will to be a hit I'm sure.  

    Hmmm Don't think we will take that route with our wines though :)

    Cheers 

    Profile photo of hlidahlida
    Member
    @hlida
    Join Date: 2010
    Post Count: 1

    Hi,

    I know a lot of people talking about how to structure your investment is important. I heard people use either family trust or corporate trust to do property investing. 

    Can anyone share your investing experience how to structure properly for long term investment?

    Thanks

    Hlida

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

    Hi Hilda

    A DFT with a Corporate Trustee will certainly not be a structure for everyone and before you head this route you need to way up the advantedges and disadvantedges.

    Without knowing your own circumstances and long term investing goals it is difficult to comment as whether this entity would be suitable.

    As i say individual situations will determine the most appropriate structure for you going forward.

    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 keikokeiko
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    @keiko
    Join Date: 2008
    Post Count: 513

    Lets say you bought 30 properties at $400,000 each and you put down 20% cash deposit on each so balance owing to the bank was $320,000 each, lets say each property was returning $500 per week $26,000 per year, you fixed the loans at say 5.3% $17,000 interest only repayments then lets say you spent $3,000 which covered insurance rates and cosmetics, now you have $6,000 left over per property per year, would the banks be happy with serviceability etc?

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

    Hi Keiko

    With the right lender there is no limit to the amount of investment properties you can purchase.

    Lenders will accept between Nil – 100% of the Gross Rental income so you need to ensure you structure the loans correctly and with the right lender to be able to carry on purchasing property.

    Seen too many clients find that they are unable to proceed because their structure was incorrect.

    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 John-USA-CommercialREJohn-USA-CommercialRE
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    @john-usa-commercialre
    Join Date: 2012
    Post Count: 50

    Hi Richard & Michael,

    You guys have some great info for everyone.  Do you see a lot of investors asking for how a property calculation is done to determine a "break even" point or computing the internal rate of return on an investment? 

    I know here in the United States we don't get the average residential investor looking to understand this as much as we do the small and large commercial investors. 

    I believe I seen a post from Michael earlier on that was the key; "HAVING A PLAN"….

    Look forward to reading more.

    John-USA-CommercialRE
    Email Me

    Profile photo of KaviKavi
    Participant
    @kavi
    Join Date: 2014
    Post Count: 18

    Hi Richard, I just moved from New Zealand to Melbourne and look forward to buy a PPR and an IP soon. Much appreciate if you could please send me a copy of that article to [email protected] I would also like to contact you soon to discuss the best way for me to go ahead with my property purchase.
    Many thanks

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

    Hi both no problems at all.

    Have emailed you the PDF article.

    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 HarvHarv
    Participant
    @harveenk1
    Join Date: 2015
    Post Count: 9

    Hi,
    May I ask how you secured your deposits for your first ip being so young?

    It’s extremely admirable with what you are doing. What had inspired you to even think of buying your first property?

    CharlieX
    Participant
    @charliex
    Join Date: 2015
    Post Count: 98

    goog example Jamie :)
    very clear now

    that means get an appraisal every few years if you think the value of properties go up in your area?
    also does that mean not to go above 80% LVR so you don’t have to pay lender mortgage insurance (LMI)?

    correct me if I’m missing the point in this example,
    say I own a property that still have a mortgage balance of $300k but the property has increase in value to $400K now. That means I now have $100K equity in this property. If I refinance the property to 80% LVR = $400k x 0.80 = $320k, I would take that $20k to use as deposit for my next investment property.

    due to the interest rate now being lower because of the RBA has cut the cash rate to 2.25% and most bank has pass on the 0.25% to consumer, is it easier to refinance now without proof of serviceability? say my above $300k property is at 6% interest rate, I now can refinance for say 5% interest rate without going through all the paperwork that many people hate to go through when refinancing a property. that means no pay slips, or profit/loss statement, and so on. it seems like a no-brainer to the bank/lender, that if I can service a 6% interest rate then how can I not service a 5% interest rate. obviously the current bank/lender may not want to refinance for lower rate, but another bank/lender would do this refinance without the paperwork?

    • This reply was modified 6 years, 8 months ago by  CharlieX.
    CharlieX
    Participant
    @charliex
    Join Date: 2015
    Post Count: 98

    awesome article Richard, very impressive portfolio :)

    Profile photo of want2livethedreamwant2livethedream
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    @want2livethedream
    Join Date: 2015
    Post Count: 5

    Hi Richard,

    after reading this thread, very interested in your article – would appreciate it greatly if you could send that to me- Please?

    The wife and I are keen to purchase purchase our first IP – Im just in the process of devouring as much information as i can on the best course of action.
    [email protected]

    Thanks in advance!

    Profile photo of SJSJ
    Participant
    @sjmeeson
    Join Date: 2014
    Post Count: 3

    Hi Ossi89,

    How’s the portfolio coming along?

    SJ | Fast Passive Income
    http://www.fastpassiveincome.com
    Email Me

    Helping you build additional income to help finance your portfolio visit www.fastpassiveincome.com

    Profile photo of k8tlesk8tles
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    @k8tles
    Join Date: 2015
    Post Count: 1

    Hi, if I have purchased a second property which is our main house we live in now but used my first property equity as security, if I now want to sell the first property will that have any impact on my new home loan? Cheers

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

    You can’t. If you sell the property the loan will need to be repaid.

    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 want2livethedreamwant2livethedream
    Participant
    @want2livethedream
    Join Date: 2015
    Post Count: 5

    Hi All,

    I was wondering – now 4 years on – how Ossie89 is going with his ambitious plan????

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi Richard,

    I noticed you used to have instructions to get the article in your signature, but it is not there today.

    The number of requests for it was taking this really good thread way off track, so today I cleaned it up somewhat. But I don’t want anyone to miss out on what I KNOW is a very well-written and worthwhile article (thanks for providing me with it so long ago :) so…..

    Please direct others who are reading this toward the BEST way to get a copy of your article via a post in here. Are you happy to continue having people email you for it? If so, please post the email address and any instructions for them here so they may follow up offline. If a PM to you works better, then please mention that.

    I just wish to have a really useful thread (this one) revert to being one to discuss how someone can gain “30 properties before 25…” etc. I know you understand…. and thanks,

    And to those who have requested and received Richards article, I did you all a favour by taking your email addresses offline ;)

    Regards,
    Benny

    Profile photo of CarolCarol
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    @caroltc
    Join Date: 2015
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    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    that means get an appraisal every few years if you think the value of properties go up in your area?also does that mean not to go above 80% LVR so you don’t have to pay lender mortgage insurance (LMI)?

    Hiya

    I missed these questions from a while back – sorry.

    It can’t hurt getting your properties valued every few years to see if there’s any equity that can be released to fund future deposits.

    In terms of LMI – it’s not easy to get lenders to release equity above 80% of the properties value these days. However – there are some lenders that are still ok in this space.

    Should you go into LMI territory? Possibly – it all depends on your longer term goals and tolerance to risk. I wrote a blog article about this a loooooong time ago. Have a read – http://passgo.com.au/blog/item/20-lenders-mortgage-insurance-lmi-a-good-or-bad-thing

    The example used in the blog are a bit outdated since 95% investments lends are pretty much non existent these days. But the theory behind leveraging LMI (probably to 90% LVR) is still relevant.

    Hope that helps.

    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]

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