Forums / Property Investing / Help Needed! / What to do when you are maxed out for finance

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  • Profile photo of Tyzzer1983Tyzzer1983
    Participant
    @tyzzer1983
    Join Date: 2016
    Post Count: 2

    Hi Experts
    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.

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,325

    Hi Tyzzer,

    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! ;)

    Benny

    Profile photo of Tyzzer1983Tyzzer1983
    Participant
    @tyzzer1983
    Join Date: 2016
    Post Count: 2

    Hi Benny,

    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.

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,325

    Hi Tyzzer,

    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,

    Benny

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    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.

    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.

    Profile photo of Ethan TimorEthan Timor
    Participant
    @ethantimor
    Join Date: 2016
    Post 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).

    Ethan Timor | Aligned Finance Pty Ltd
    http://www.alignedfinance.com.au/
    Email Me | Phone Me

    Active Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,325

    Bueno, Ethan !!

    And for Tyzzer, you might like to check out Colin Rice’s signature in this post :-

    https://www.propertyinvesting.com/topic/5030760-help-about-to-purchase-an-investment-property/#post-5030860

    Hope he can help,

    Benny

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post 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.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

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