- CarrParticipant@andyjamescarrJoin Date: 2019Post Count: 3
I’m completely new to property investing. I read Steve’s book after deciding that I wanted to replace my income.
I don’t know if I am doing calculations correctly or even if I am doing the correct calculation. The way I am looking at things, property has increased in value a lot since 0-130 was written.
I’m trying to look at things in terms of ‘buying’ cashflow, but when I do that, it starts to get a bit depressing, as I’m looking at finding a deposit of $60,000 (LTV 80% on a purchase price of $300,000, earning a weekly rent of about $285)to earn a positive weekly cashflow of $115. Does that seem correct?
To replace my family’s weekly expenses, I’d need to do this about 17 times.
I have a discretionary family trust with a corporate trustee. I don’t see how the bank would lend me enough money to do the above 17 times over.
What am I missing?
AndyBennyModerator@bennyJoin Date: 2002Post Count: 1,416
Keep in mind that Steve’s book was written many years ago and, even when he was buying up, this was in a “forgotten area” of Ballarat. He bought there because the numbers worked for him there, at that time. Later, when the numbers didn’t work, he moved his focus to NZ, then later to the USA. It was all about tailoring his investing to the areas in which that style would work.
In my welcome PM to you, did you happen upon the example (from a more recent timeframe) where a young bloke was using a similar pattern to build up his portfolio. In case you didn’t, check out his post here:-
Now, that is from 5 years back or so – I suspect his way can still work in some areas today – but then, his way worked by having him doing renos – will THAT way work for you? See, there are many ways property investing can work, but they don’t all suit everybody. You might be better to start with the end in mind and work out what you want to achieve, and by when, then come back to ask how you might make that happen. For some, a slow steady path works – for others, they may be in more of a hurry (which introduces more risk).
I just checked Darryl’s story, and I note the original posted photos don’t display any more. Suffice to say, the numbers were impressive. In most cases, he bought low, renovated the place, then refinanced to get this depsoit back for the next property – and nearly ALL of the properties had a 10% return, so his share after mortgages and all other expenses still left him with a healthy chunk of change. If I recall correctly, his total Income from property was around $200k pa, and his expenses totalled about $140k. In a later post on here, he reported that he’d started working on paying down debt to get his leverage down to 50% to further consolidate his portfolio.
Further down in the linked topic you will see where some of us were able to buy back-issues of the magazine, so you can easily read the whole story. I highly recommend it to you,