Forums / Getting Technical / Finance / 23 yr old graduate need advices on personal finance

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  • Profile photo of MinhMinh
    Participant
    @dmngu9
    Join Date: 2017
    Post Count: 1

    Hi all,

    I am a 23 year old graduate and struggle to structure my finance. Currently, I save 60% of my income after tax but cant really see further than that to create wealth. I read ‘rich dad poor dad’ and ‘0 to 130 properties’ and think real estate is the domain I would like to go with.

    I wonder if anyone can give me advice on how to get started in real estate with little savings?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Hi Minh

    Good on you in wanting to start your property investing journey as soon as possible.

    Certainly when I was younger than you I had purchased my first 4 IP’s but have to say that was the 80’s when it was easier to obtain finance and APRA was not controlling the financing scene.

    Realistically in 2017 you need a minimum of 10% of the purchase price as deposit as well as all of your acquisition costs such as stamp duty, legal fees. LMI etc. Depending on the State you are purchasing in this could easily be another 8-10% of the purchase price.

    Assuming your income can support the level of required borrowing you may well find that the deposit hurdle is the stumbling block.

    I would not be in a hurry to rush out and buy and would look to save up as much as possible.
    Personally i don’t think over the coming 12 months you are going to miss our on any capital growth so would be looking to build up your cash flow in readiness for the next round of the price cycle.

    Focus on saving and ensure you don’t collect any bad debt on the way.

    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 JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 282

    Study the Nathan Birch model,

    one of the best examples I have ever seen.

    the model is simple (in theory)

    1. buy under market value
    2. make sure the ROI and rental return are over 8%
    3. for the first property make sure there is the ability to value add to build equity to purchase more properties (e.g. add rooms, reno, etc)
    4. go to bank to refinance/access equity
    5. rinse and repeat

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    5. rinse and repeat

    Not as easy as it once was in the post APRA world of investing :-(

    Especially if on a low/average income.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 282

    100% agree Jamie.

    but I like the statement

    “Do what you can, with what you have”

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