Tyzzer1983Participant@tyzzer1983Join Date: 2016Post Count: 2
Just after your thoughts on my situation, I have 4 investment properties and currently trying to pay off my PPOR as fast as possible hopefully within the next eight years. Across all 4 investment properties they are slightly negative geared. 2 of the IPs are in Perth and producing very low yields. 2 other investments are in QLD which were both purchased within the last 2 years and performing average. As I can no longer source any further finance to extend my portfolio I feel the only way to move forward is to sell one or both of the Perth IPs to improve with positive cashflow properties but I have had them for more than 10 years so the capital gains are going to be considerable. Is it worth selling and are there any ideas to limit the damage of the CGT. I’m stuck deciding whether to put as much money in to improving my portfolio or putting all available funds to my PPOR to pay it off then work on my portfolio.
Thanks I will be great full for anyone’s thoughts.
Great question, and one that I am sure many of us have agonised over before. One of Steve’s books talks of “Multiplication by Division” (clearing non-performing assets to harness Equity and invest into better-performing assets). In short, his examples indicated “Sell one to enable you to buy two”.
Now, there is SO MUCH wrapped around that – and you have alrady hit on some…. CGT would be a biggie, but then so too would be selling costs, buying costs, stamp duties, LMI, loss of rents, etc. So finance in all its forms are at the heart of this situation. I am almost certain Steve would be saying “Run the numbers” – and that would likely start with a huge “heart-to-heart” with a Broker whom you know and trust.
There are a host of other things to consider too – others would include “If you sold, is there somewhere/something else that will return you a way better performance than what you are selling”?
Or “Is there a way that you can invest some $$ into what you already hold to add to their values, or their incomes”? (Make them positive geared, and/or ready to sell – whichever….)
Keep in mind what I think are three of Steve’s main mantras:-
“Buy problems, sell solutions” –
“Make the most money, in the shortest time, with the least risk, and the lowest aggravation” and
“Does the decision you make move you closer to your goals, or away from them”?
It is great that you are thinking “What’s next?” – I hope others (particularly finance people) will reply to add their ideas too.
Well done so far! ;)
BennyTyzzer1983Participant@tyzzer1983Join Date: 2016Post Count: 2
Thanks for your comments. Do you or anyone else know a really good broker or financial advisor in Perth that I could discuss some ideas with. I have been using an advisor for a while but they have attempted to push some of their own mortgage solutions my way even though they don’t suit my situation. I ran the numbers and they didn’t add up so I have lost a bit of trust that they had my best interests in mind.
There are a number of Mortgage Brokers on the forum – look at a few threads in the “Help Needed” or “Finance” forums and check the signatures of those who respond. Most of them say “You don’t need a Broker nearby, as all work can be done using FAX, email, etc.”
Of course, YOU might want to be able to drive across town and sit in front of your adviser. Quite understandable. Or maybe something can be arranged using Skype or similar so that you can be “face to face”…..
Maybe some of our members can point you to a knowledgeable MB in Perth,
BennyRichard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,010
Who has told you that you are unable to source additional finance ? – Your Bank.
There are many avenues for finance but without all of the facts it is difficult to assess.
Yours in FinanceEthan TimorParticipant@ethantimorJoin Date: 2016Post Count: 282
Do you or anyone else know a really good broker or financial advisor in Perth that I could discuss some ideas with.
Colin Rice is from Perth (I don’t know how to tag here, sorry).
Bueno, Ethan !!
And for Tyzzer, you might like to check out Colin Rice’s signature in this post :-
Hope he can help,
BennyCorey BattParticipant@cjaysaJoin Date: 2012Post Count: 1,010
As others have mentioned – just because one bank (or even a broker) may have said no more, doesn’t mean that’s necessarily the case. Each lender has different ways of calculating your capacity to borrow and they vary WIDELY. By getting another opinion in these cases it can mean the difference between ending your journey prematurely, or moving to the next stage in your investment path.
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