All Topics / Help Needed! / After reading my first book and working out im in the wrong cycle- Negative not Positive

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  • Profile photo of MandyFennellMandyFennell
    Member
    @mandyfennell
    Join Date: 2014
    Post Count: 3

    New to the forum

    My husband made the mistake of taking our 4th child on a camping trip recently. Finding myself lost with the other 3 children out having their own lives i found myself at Big W, purchasing  Steves book 0-130 properties in 3.5 years……Wow i couldnt put it down as we have a few investment properties and found out why we are maxed out……..after reading the Negative Gearing Cycle is the one we are in. I kept saying to my poor hardworking hubby how does everyone else do it?? I have found myself so excited after reading this book and driving my husband nuts also, but excited as we have recently changed business structures so im investigating more money at the moment for investing.

    Im also a bit confused in a our situation.  We have an IP in Seaford over the last 10 years, we have done the hard yards with this one, it is just cash positive and also would give us approx $120k if sold. Do you keep this now that is cash positive or sell to embark on more investing??  We have a factory that we use for business purposes, but since structure change can now rent it back, and our third property is in a good position near the beach, but not positive (we have had for 2 years).  My Q for these other 2 properties is should i rely on real estate values or do you get an independent valuer, does anyone recommend one around the maroondah area.

    Really excited about moving forward as my husband works very hard in his physical job and his body is very sore and tired, trying to help us move forward so we can enjoy all of his hard efforts so far….

    Thanks in Advance :)

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,376

    Hi Mandy,

      Congratulations !!  And yes, I am serious.  It sounds as though a very welcome light has switched on for you, and that is awesome.   Of course, this book will have shed light on your whole situation, thus leading to your questions :-

    Quote:
    I kept saying to my poor hardworking hubby how does everyone else do it??

      There are many ways – in short, by buying below value and creating equity, by buying only +ve cashflow IP's, by developing to create new equity, by utilising a "cordial mixture" (where the +ve properties of a portfolio help to carry the -ve growth properties you hold), by renovating, by adding rental value, etc……

      Your other question (consisting of 3 or 4 combined) was really "OK, so where do we go from here??"

      I suggest you take a bit of time to :-

       1.  Keep reading

       2.  Keep questioning

       3.  Talk with advisers re your whole situation

       4.  Meet with others who are already doing this IP thing

       5.  "do the numbers" re each individual IP, your collective portfolio, and your income/expenses from the day-to-day.

       6.  Set goals then go for them…..

      It is an exciting time, and I feel good for you Mandy.   Keep this snowball rolling while you are fired up, and you will look back in a year from now with a huge smile on your face.   Go for it,

    Benny

    Profile photo of MandyFennellMandyFennell
    Member
    @mandyfennell
    Join Date: 2014
    Post Count: 3

    Thanks Benny for your reply, and its funny because i was reading your reply and smiling.

    Staying focused, love to check in a year how big my smile is then :)

    Profile photo of Little_StoneLittle_Stone
    Participant
    @little_stone
    Join Date: 2014
    Post Count: 17

    Hi Mandy,

    Benny is definitely put it in the right context.

    My questions are, by what age (how long to go) do you want to enjoy the spoils of your IP’s and what is the $$$ figure you need them to produce?

    By this you/your advisors can work out if you have time to reinvest into a new property cycle if you maybe need to look at other investing strategies if there is not enough years to come.

    Also, I assume you’re counting on growth of these areas to get you through? Is there infrastructure or some sizeable change to make these properties increase in value..?

    Hope to hear from you,

    L_S

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Hi Mandy

    Firstly welcome to the forum and i hope you enjoy your time with us.

    Must admit there is insufficient data on your own circumstances or longer term goals to provide a structured answer however i would not suggest selling the IP unless you have catered for possible CGT and selling fees. This will reduce your net funds available for re-investment.

    You mention that you own a factory which you rent from yourselves so you might want to think about selling this to you Self Manager Super Fund and paying the fund the market rent which will certainly reduce your personal Tax liability as well as increasing your net worth in a Tax sheltered environment.

    Going forward you need to assess what are you seeking from your investment and whether property is the way forward.

    Many of our clients use a mix of investments in order to maximise their returns and increase their net wealth as buy and hold property is not the sole strategy you should focus on.

    Cheers

     

    Yours in Finance

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

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

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