I recently received an email telling me that making myself active in the forums is the best way to utalise their true potential and the wealth of knowledge from those of you who have already walked the walk.
So this is my situation and I am willing to listen and learn from anyone willing to give me their time.
I am almost 29 years old with a partner that together we have our owner occupied house. We have $100k equity in this home, how ever we have enjoyed ourselves up to this stage in regards to buying Harley (owned) 2 new cars etc. which means we don’t really have much in the way of cash savings and a car debt of $18k.
Basically we have decided we want to knuckle down and start to invest in property, we know we are not in a position to do this just yet but within the next 2 years we will ensure we will be.
What advice, tips and pointers would you give me to ensure we do this the best way possible. I’d prefer to reach out for guidance now, rather than wait 2 years and the find out I should have done something differently.
Cheers Barlow
Hi Barlow
Firstly welcome to the forum and I hope you enjoy your time with us.
I wrote an API article some 10 years about goal setting and the same points I made then are still as true today.
If you would like a copy of our 4 step property program flyer on how to turbo charge your portfolio let us know and I can email it to you.
In essence when we work with a client is a matter of working backwards to see where they want to be in 3,5 or 10 years and gearing the portfolio to getting there over time.
It is a case of making goals and then mini goals by formulating a variety of cash flow and capital growth strategies to achieve them over time.
Then it is a case of reviewing these goals along the way to ensure you are on track.
To start with we normally suggest a assessment of your borrowing capacity and equity position as borrowable equity is a lot different to assessable equity.
How you structure the borrowing is also important to ensure flexibility especially in the current investment climate.
From the limited information to hand I don’t see why you can’t start now rather than wait 2 years.
Cheers
Yours in Finance
0-40 Properties in a decade. Ask me how.Richard Taylor | Australia's leading private lender
I would do a bit more research before jumping into anything, but $100k in equity is enough to start. Serviceability will come into play, but that might be ok.
$100k is my point where I buy another property.
TNG, Barlow mentioned he had 100K of equity not accessible equity. There is a big difference.
Cheers
Yours in Finance
0-40 Properties in a decade. Ask me how.Richard Taylor | Australia's leading private lender
Thank you all. Yes I should have been more clear, as it is our own home our accessible equity is only around $20k without refinancing for more than 80% of the value of our home.
So due to this and the $18k finance on the the car we are probably looking at 12 – 24 months before being in a position.
Our goal in that time is to pay off the car debt in full and save some cash to cover associated cost of investment property such as stamp duty, conveyancing, etc and build a bit more equity in our own home
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This reply was modified 8 years, 5 months ago by
Barlow. Reason: Wrong term
Barlow refinancing to > 80% is not necessarily a bad thing as LMI may well be Tax deductible.
I would be getting your Broker to order a valuation on the property and then you can have a look at your options.
Depending on the rate of interest being charged on the car loan you might want to incorporate the car loan into the refinance and then make the same monthly payment to the PPOR loan. The difference in interest might well reduce the overall principal at a quick rate than making the payments separately.
Don’t pay for the stamp duty etc out of cash as the interest on the borrowed funds would be Tax deductible.
Cheers
Yours in Finance
0-40 Properties in a decade. Ask me how.-
This reply was modified 8 years, 5 months ago by Richard Taylor.
Richard Taylor | Australia's leading private lender
Thanks Richard,
This is the type of advice I’m willing to learn from. Not sure how much detail I am supposed to put on here in terms of my financial situation but it seems everyone is here to help.
My situation is I had a really good Morgage broker, who has recently left that side of his business to his 2IC which I don’t have as much faith in.
Any way just had valuation on the house 2 weeks ago and come back with a fairly reserved valuation of $450k (we owe $350k)… We have split loan $300k Fixed principal + interest (for another 2 years) and $50k interest only variable.
Due to the fixed interest portion of the loan I was told that it limits my options as to refinancing until that period is up, otherwise risk being charged break free fees
But I appreciate your input none the less
Barlow there are a few things you could do without having to refinance.
Setting up an equity loan with the existing lender would get you going depending on who it is.
Cheers
Yours in Finance
0-40 Properties in a decade. Ask me how.Richard Taylor | Australia's leading private lender
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This reply was modified 8 years, 5 months ago by
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