Thanks JacM and Jamie I'll contact Richard.
+ Richard is a very successfully and experienced investor who will just get straight to the point <moderator delete language>, i would seek his help regarding your finance + ask him questions about investing.
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Hi there Catalyst,
Just wanted to express appreciation for your post – I've just joined this site today!
Thought I might begin on the site by sharing some of my story.
After owning a house many years ago I sold/gave everything away for a while, and now in my 40's have returned to the "real world". I got a job in Oct 2010 and managed to put $6k into Super by Jun 2011, (after reading 0 to 260 about 12 months ago, I gathered my lost stuff together and upped my contributions to have $31k at June 2012, and will shortly tip $40K in my industry fund.
I am keen to setup my own SMSF to purchase a IP. Apart from the Super, I really don't have much – I've been working on furnishing our rented house and paying my kids school fees. But I do have regular income.
I'm sick of paying $360pw for my rental property but have not had the courage to strike out with an SMSF as I have not found any of my friends have been there yet. I've been adding my own contribution to my employers super and figure I could sink that into an IP, but first have to set myself up.
I've formed a company before but am new to SMSF. I've been doing some reading on how to get started (heard about BGL software for example) but am interested to know if you (or others) began your investing from a SMSF with a low balance?
Many sites/commentators have suggested $40K is too small, but some have said it could work for an "agressive investor" (while I don't label myself that way – I am certainly prepared to make additional contributions).
Regards,
Bruce
Hi JacM,
Do you (or anyone else, for that matter) have an accountant/solicitor/helpful person switched on to assist with setup of SMSF or borrowing in Latrobe Valley (VIC)?
I've followed your previous comments and would appreciate any advice being new to this site today.
Regards,
Bruce
I'd be happy to put you in contact with an Investment Property Coach I sometimes deal with. Sometimes you need specific advice for your precise situation!
BruceT wrote:Hi JacM,Do you (or anyone else, for that matter) have an accountant/solicitor/helpful person switched on to assist with setup of SMSF or borrowing in Latrobe Valley (VIC)?
I've followed your previous comments and would appreciate any advice being new to this site today.
Regards,
Bruce
I'll send you a PM
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
If you want to choose a mentor make sure that you know who you are working with. Not join a group then be assigned to a salesman. Believe me that happens a lot.
Work with someone who will design a program just for you and someone who is not after a sale but is there to work with you in the long term.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Hi TonyLyn
If you went to Steve's last market update, then you should now know what type of investor you are at the moment and the strategies Steve recommends to move forward to retirement.
One thing I learnt recently about buying property with a SMSF is that it is more expensive than buying in your own name for a number of reasons.
1. The banks currently are only lending to SMSF for property at their standard variable rate – no honeymoon periods, no special reduced interest rate packages.
2. The SMSF does not buy property in it's normal structure. it requires another bare trust to be setup with all the expenses that go with it so in the vicinity of $1200 to $1800 depending on who sets it up for you.
3. The banks require a Statement of Advice (SOA) which costs around $2000
4. All up it worked out to be about an extra $6k to buy residential and $8k to buy commercial
Although of course there were super fund advantages to buying property but then more restrictions on what sort of property deal for which you could borrow (no development loans).
I found this link which explains a little more
Bottom line is to get a good financial advisor who understands borrowing and using SMSF for property.
A strategy I was exposed to recently was how to build a million dollar property portfolio in 5 to 10 years. It generally involves investing in regional towns where you can pick up a property for around $100k.
Buy one, under market value, renovate and add say $20k in value then have it revalued by the bank to pull out the equity you now have and move to property number 2. Do the same then on to property 3 and then up to property 10. 5 years means you would need to do one very 6 months. Banks won't always revalue the property the way you would like after 6 months so you may need to wait a year for each property. But then that depends on your bank. 10 would be 1 property per year which shouldn't be too difficult.. I'm looking right now…
BUT, the key to making this work is to have at least 20% deposit, buying under market value in towns where the property you buy is always positive cashflow. That's where the education you are doing is used. Finding towns where you can get positive cashflow from these sort of properties and then being able to buy them under market price.
we did this once with one property in Armidale a few years ago but then the family started to grow and so did the need for a bigger PPOR so that's were our attempt at this strategy stopped. So now we get to start it all over again but probably not in Armidale.
I hope this little bit of information helps you on your way. Hang around this site and you're definitely in the right place! There is so much experience and like minded people.
And congratulations in investing in Steve's US Commercial Property fund. I did exactly the same with my super – moved it to SMSF and then invested. I think it's the best place for super to be for the next 10 years!
Cheers, Michael
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