Hey guys if you were looking for a $300,000 property and was given $300,000 cash , would you buy the whole thing at once to save hassles or would that been a silly thing to do?
It will be interesting to know what you guys would do ? If tomorrow you were handed $300,000 what would you do ?
Are we talking about a PPOR or IP?
Assuming it's an IP then it's a silly thing to do in my opinion.
Use a portion to cover the deposit/costs and use the banks money for the rest.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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I would first look at some asset protection strategies and then consider paying down non deductible debt before reborrowing to invest.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Well personally since I can borrow 60% of the value as a non-recourse loan I would buy an apartment complex in the United States for around $700,000 and be getting both growth and positive cash flow from day one.
Nigel Kibel | Property Know How
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There are so many different things you could do. For the sake of the exercise, here is the approach I would take under a few different scenarios…
Scenario #1: you are a person that is living in a house that has some sort of mortgage on it.
1. Pay down any debt on the house you are living in
2. With the leftover money, invest in investment properties. If there was sufficient cash to buy a property outright for cash, I'd consider doing so provided it meant I could buy the property cheaper than if I was buying it with a "subject to finance" clause. Then I'd bring a lender on board after the fact to place the property under mortgage, thereby "extracting equity in the form of cash", and using that to fund deposits, stamp duty and buying costs of subsequent investment properties.
Scenario #2: you are living in rented accommodation, own no property and want to buy something to live in.
1. Buy a property to live in using the money you have.
2. Refinance the property to extract the equity into an investment loan that would allow you to purchase investment properties.
Scenario #3: you are living in rented accommodation and have no desire to buy something to live in.
1. Use the funds to cover deposits, stamp duty and buying costs on investment properties. Have a bank fund the remainder.
Jacqui Middleton | Middleton Buyers Advocates
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Hard question to answer directly. I think Jacqui has depicted it quite fairly.
Goals, Strategy and then Apply from there. If it’s wealth you’re after then there’s on strategy, if it’s to set up a comfortable retirement there is another all together.
I think Scenario #3 would be my pick and when investing use a 20% deposit, pay the fees involved but research is the key here. Must pick the right area so as to not cripple opportunities in the future.
Borrow 100% of the investment property value and keep the balance of funds in an offset account or look at getting 1.5-2% / month on your money and adding to the offset account as you go.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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