Forums / Property Investing / Help Needed! / First investment help

Viewing 13 posts - 1 through 13 (of 13 total)
  • Profile photo of BarlowBarlow
    Participant
    @barlow606
    Join Date: 2015
    Post Count: 35

    Hi guys,

    My partner and I are looking at getting into our first investment property. Met up with a few company’s that seem more keen to selll me house and land rather than help set me up.

    Looking to get all the right info before we make an informed decision.

    So would like to know what team we need to put together. Eg.. accountant, buyers agent, etc. we believe we have a good mortgage broker already that has told us we can spend up to around $500k (we would prefer not to max out) but also very happy to listen and learn from ppl who have walked the walk.

    A good friend of mine has recommended Jacqui Middleton and Richard Taylor who I have read a lot of their input on this very forum so I will be in touch with them…

    But we would appreciate any help and guidance on how to go about this

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Don’t use any ‘investment’ service which pushes new houses/house and land/off the plan – their business model is just to be a sales agent for developers where they get paid a commission. They have no interest in selling you a good quality investment, just earning $$$. Generally these properties underperform massively and a general laughing stock of the Australian investment community.

    A more suitable option is definitely using a buyers agent if you’re needing specific assistance in finding a property – plenty across Australia so you need to find one in the area/city you’re wanting to buy in.

    Jacqui is great, she’s an ethical player who knows her stuff.

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

    Investment Focused Finance Strategist - servicing Australia-wide

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

    Hi Barlow

    Happy to send you a couple of interviews i have done with a number of publications which might give you some insight into how to build a portfolio.

    I have used a number of strategies over the last 25 years which enabled me to build a unencumbered portfolio with a value in excess of 40M.

    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 BarlowBarlow
    Participant
    @barlow606
    Join Date: 2015
    Post Count: 35

    Thank you both for your advice and suggestions Corey & Richard. I see both of you participate a lot so your advice is definitely respected and appreciated.

    I have an appointment with a accountant I use for tax (hoping he invests himself) so once I speak to him about the most suitable property type we should look for for our goals/situation ie. new, established, house & land etc. I may be in touch.

    Richard I would really appreciate you sending links that may help us as we begin this process. My email is [email protected]

    Cheers

    Profile photo of BarlowBarlow
    Participant
    @barlow606
    Join Date: 2015
    Post Count: 35

    Richard, the link to your website doesn’t seem to work. Are you and Jacqui based in Melbourne?

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,065

    Met up with a few company’s that seem more keen to selll me house and land rather than help set me up.

    Avoid the one stop shops that source and finance property.

    Most are real estate agents in disguise – making massive commissions from overpriced off the plan properties.

    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 BarlowBarlow
    Participant
    @barlow606
    Join Date: 2015
    Post Count: 35

    Thanks Jamie,

    Yes we have opted to source our own property, and have found something that ticks all the boxes.

    Now we are just waiting to hear if our current broker can arrange finance, or if we will need to change brokers.

    Our current lender does not approve investment loans for land or construction. I little frustrating as we would have liked to put deposit on weekend.

    But thanks for you advice. It is much appreciated

    Profile photo of SteffanTPSteffanTP
    Participant
    @steffantp
    Join Date: 2013
    Post Count: 2

    Hi Barlow,

    If you’re looking at sourcing your own property, make sure to undertake proper due diligence with regards to any limitations and constraints that may face the property. Understanding the development potential of your land will save you a lot of heartache and inform your investment decision.

    You don’t want to buy a property intending to demolish and subdivide only to find out that you can’t demolish the existing buildings on site due to some form of character or heritage significance. Best to contact a local town planner or buyers agent who will double check everything for you (Zoning, Overlays, land constraints, etc.). Otherwise, you can find the information yourself from the council’s website.

    Best of luck with your endeavours!

    SteffanTP | Steffan Town Planning
    http://www.steffantownplanning.com
    Email Me | Phone Me

    Hi, we're a Town Planning firm looking to provide high quality advice to your enquiries. Contact us at (07) 3844 8818 or [email protected]

    Profile photo of BarlowBarlow
    Participant
    @barlow606
    Join Date: 2015
    Post Count: 35

    Thanks Steffan,

    Appreciate the advice. We are now looking at possibly doing a house and land option. Maximise tax benefits, less time and stress needed in the first 5 years so I can concentrate on working and paying down our PPOR mortgage.

    Cheers

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

    Hi Barlow,
    I’m not sure just exactly what you mean by this:-

    We are now looking at possibly doing a house and land option

    The main thing is this – if you are thinking of going to someone who is going to sell you a H&L package, DO read this link first:-
    https://www.propertyinvesting.com/topic/4408921-anyone-heard-of-asset-partner-in-perth/#post-5043546

    Especially see the link within that link that talks of “Buying off-the-plan is dumb!!” It might sound harsh, but hey, we all need to be aware of what is in play when taking that path – and Jason has spelled it all out in that link.

    But, another way would be for you to purchase the land, then approach a builder and build a house on it. That is a whole different kettle of fish.

    If you are wanting to pay down a PPOR, I think Equity Growth can do that a whole lot quicker than paying it in after-tax dollars via your excess in salary. But just be sure that the path you are choosing really does do the job that someone says it will do (i.e. reread the link above).

    ;)

    Benny

    Profile photo of BarlowBarlow
    Participant
    @barlow606
    Join Date: 2015
    Post Count: 35

    Thanks Benny,

    Yes both good articles. And it is a realistic fear I already had about the lending criteria changing, or in particular changing jobs in the next 6 months or so which would also effect lending options.

    Because of this reason we are waiting till the equity has been released and we are in more of a position to put deposit on an opertunity as we find it.

    We are meeting with an accountant on Tuesday to get more info on the comparative benifits of buying new or buying established aswell,

    When you said about it being quicker to pay down our mortgage using equity growth, do you mean equity growth in an investment property obviously? Equity in PPOR wouldn’t pay down our existing loan for the house the loan is secured against

    Thank you all for your input tho. I’m here to learn and do as much due dillagence as I can before entering into our first investment

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

    When you said about it being quicker to pay down our mortgage using equity growth, do you mean equity growth in an investment property obviously?

    Correct. e.g. let’s say your wage has a bit of excess and you can find an extra $200 a week to put toward your mortgage. Roughly, that’s $10k in a year. Pretty good, right?

    But what if you invested it in an IP that you manage to buy for $20k below market, and you spend a bit ($10k) to add value – like, paint, a new stove, carpet, whatever – and you can add a further $30k of equity that way. You’ve just created 5 years worth of your “salary excess” in a few months, haven’t you?

    Of course, what you do from there has yet to be determined. You might want to sell (but then CGT might play a part, and RE commission, etc) or you might rent it out for a better rent because it now looks so much nicer. Or maybe the extra equity can be borrowed against to buy #2 investment – and do it again. That $50k could be a large chunk of a deposit on another, right? And far quicker than attempting to “save” a deposit, right?

    This is where knowing WHY you are doing something, and just HOW to do it for best effect becomes important. Suffice to say most can create wealth more quickly than earning it. But one must also keep a weather eye on the market as a whole – including financing and any law changes relating…. etc.

    So there is a lot to it, but then a lot of good that can come from it too. Softly softly, and check your assumptions with those who know prior to implementing things.

    Benny

    Profile photo of Steve BSteve B
    Participant
    @steve-b-2
    Join Date: 2014
    Post Count: 1

    Hi Barlow

    There’s a lot of good advice here and some very generalised advice. Some are also painting everyone with the same brush when “everyone” are not the same, including you.
    Here’s some of my suggestions.
    I believe you need to first workout what you want to achieve and why from this investment property.
    You also need to know what your financial capacity is and what your personal limitations are, like available time, knowledge, experience etc.
    By what you have said, you are looking at buying and holding a IP for a period of time.If that’s the plan, have a good understanding of the differences in cash flow between a new home and an older home, both before and after tax. Your accountant can give you this information.
    There are advantages with buying a house and land package, lower stamp duty & title reg, meaning less funds required to settle. Although while under construction you don’t have rental income, generally the stamp duty saving is greater the the interest holding cost, plus the interest and running costs can be tax deductible against your income, even while not having a tenant.
    Many sceptical people who have seen the bad side of property marketers, put down house and land packages, however if you do your research and due diligence before committing to a project, you can come out in front with capital growth once the home is completed.
    Be careful signing up to land only before finding a builder, there can be a lot of hidden costs (under ground, slopes, trees, encumbrances etc) that can make a good land price become very expensive and if you have signed for the land 1st before knowing the answers, your now stuck with it.
    Obtain a fixed priced contract for the house and land for everything to be completed (full turnkey), then check the price against comparison sales, just like a bank valuer would. This will give you a good heads up if you are over paying. Do the same for the rental income, get several independent appraisal letters from local property managers, include a specialist property management firm who’s not part of a real estate agency and also look at comparisons data of what has recently been tenanted.
    Select a location that has good growth potential that is being driven by home owners and not dominated by investors.
    Main thing is to keep within your means and have a good team you can trust to work with.

    Cheers

    Steve B | Properties 4 U Pty Ltd
    http://properties4u.com.au/
    Email Me | Phone Me

    Buy Sell Invest

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