DONT READ THIS

Owning 10 properties that are neutrally geared in almost all circumstances can only be a good thing.

Over time rents go up, so they move to positively geared. Over time prices go up, which gives you even more profit in your pocket. Eventually you could use the increased rental income to pay off the mortgages without effecting your cash flow a great deal. Then you own 10 properties free and clear all producing an income.

If you are getting $260/week for 10 properties then that is $2,600/week or over $100,000/year in income. Not too shabby.

Ryan McLean
CashFlow Investor
Read my blog post: How To Buy Multiple Properties

I need to comment again.

I know Engelo personally and he has purchased 3 already with 2 others which are going through settlement phases.

His goal is $50,000pa in 5 yrs cash-flow positive from his properties. Yes if someone buys flippantly they will cause themselves harm and be in a not so good position but Engelo has gone out on his own and purchased his properties below market value and adding “equity” via minor cosmetic upgrades and bringing in strong yields.

Is he hoping for massive gains overnight? no. Is his risk large? no!

Why? Because he has bought below market so if prices fall 20% he can still get out relatively unscaived. + Why does he need to sell if the property is self sufficient? The properties comparable after chatting offline to Engelo are good consistent properties which chug along no matter what market we see.

I actually think he will get $280pw on his purchase from what info he has disclosed to me, not as advice but as a friend so with that he is talking conservative. Whats the problem with unemployment? He is buying in bread and butter locations so even on Dole cheques they can still pay the rent. We are not talking $600pw property here.

I say this as he is a little “green” but is well and truly on the way to having a solid portfolio. His leverage is under control and I remember same comments being thrown my way 5+ years ago on various sites. Don’t get disheartened here Engelo, if you have a plan for your strategy and its working and getting you closer to your goal then good luck.

If the properties rent rses $10pw each year for next 10 years thats $5000 cf+pa on only 1 deal.

Who here doesn’t do a $10pw rent increase?

Just my two cents.

p.s. keep up the good work.

Engelo is this not what you requested:

” I would like other peoples opinion as to what they think about having a portfolio of 10or more properties that are pretty much neutrally geared”

Are you only after positive reinforcement which usually includes masking or simply excluding the true picture.

Forums like these offer valuable information especially that of a technical nature. They, however, are not so good at providing a balanced view when opinion is called for. There are only a few ppl here who will give it to you straight from the hip.

I’ve critiqued what you and Nathan have said and found way too many holes in your plan. Based on current market conditions and a deteriorating global economy I see no upside in your plan or strategy only loosely based assumptions with a heavy upside bias that ignores every market indicator. If I was to describe your current buying spree and accompanying strategy I could only describe it as reckless at best.

You could of course argue your case with facts and figures. I look forward to those with interest.

Your problem Engelo is you’ve been caught out blowing off like you’re some astute PI when in fact both you and Nathan can’t substantiate your claims.

As for negativity I’ve simply questioned the discrepancies in your assumptions and you still can back them with anything remotely substantive.

If you think this is a battering then I think you will find the next few years incredibly trying.

The reason you’ve been taken to task is twofold; to make you stop and think more comprehensively about PI so that you can better survive into the years ahead; and secondly signal to others, who are not so knowledgeable but looking for information, that spurious claims by wannaby PIs aren’t all they’re made out to be.

A lot of the investment theory/philosophy I see espoused here is easily debunked with a few critical questions. Once exposed they immediately label one as ‘negative’ as a counter to their somewhat questionable advice. There are many industry professionals here (I use the word professional lightly), evidenced by their signature blocks, that offer dubious encouragement much of the time. I find the paradox of a professional who provides excellent technical advice to someone who’s either in or entering into an often highly leveraged high risk investment as ludicrous. The analogy would be the coach giving a swimmer last minute coaching tips knowing full well the chances of making it across the channel are remote and one will likely drown!

I see you like the swimmer. I’m trying to tell you don’t swim your gonna drown because the sea’s too rough. Ppl like Nathan though are strapping bricks around your waist and saying “Go for it Engelo you can do it”.

But anyway you’re a big boy now albeit with a thin hide. I’m not optimistic about your chances but good luck anyway.