Please Help!!!

[USANA]

Hello everybody,
I have a dilemma and I need some expert advice. I am 26 yrs. old and currently own no property or any other assets. I am desperate to get into the real estate market asap.
Up until this point in my life I have uselessly wasted my money and have very little at the moment ( I realise my mistakes and am working on it ). I have discovered this forum and think it's fantastic, congratulations to all!
Since I don't have enough money to obtain a loan through a traditional lender at the moment I have been looking at alternate lenders. I am looking at lenders that do not require any deposit but I would have to come up with the money for stamp duty, legals etc..
What I wanted to know was if anybody here has dealt with such lenders, should I stay away from them or does anybody know about any other means of finance I could obtain.
I really want to get into the market ASAP and do not want to wait until I have a full deposit, I want to start now even if it does cost me that little extra at least it's a start!!
I am eagerly awaiting your advice guys!

usana

 

[Puppeteer]

I think there are a few lenders around who do no-deposit homeloans. Also, you may be able to utilize the First Home Owners Grant to help you on your way. It's probably best to talk to a broker to examine your options with what savings you do have, the level of debt you have and your income.

My suggestion though is to work on saving your deposit. Saving demonstrates to the banks (and to yourself) that you can manage your finances. This also gives you some time to educate yourself about the RE market, and to get some of your groundwork research done.

At 26 you are still young and have plenty of time to grow your portfolio and wealth. Working on reducing any debt that you currently have also helps lots with the bank.

Congrats on taking the first steps. Keep at it.

 

[not a sheep]

Welcome on board Usana,

Another option you may and I stress may want to consider is to look at developers of a Kit homes within estates.

They sometime offer 100% lends + Pay for your stamp duty.

I had friends who took up this option before the boom and managed to make some money out of nothing.

In the case of my friends, once the equity rose through capital growth they transferred across to a traditional lender.

Just be aware that the market is slowing down and that you could pay for something that may not go up for a little while.

Also consider that the builders usually charge about 1% above normal lenders rates.

Something you also must be ready for is the long term commitement.

Perhaps a way to soften the first loan is for you to initially make the property your prime residence and then move out.

This will allow you to have a six year period where you would be able to harness tax breaks and have a tennant help pay the property off while not having to worry about capital gains tax.

In addition, Puppeteer is spot on with utilisation of a mortgage broker and the first home owners grant as a loophole.

Good Luck, stay focused and be prepared.

Regards,

NAS

 

[Jamie]

Hi Usana,

Welcome to the forum

This might not be exactly what youre looking for, but have you considered spending the next 6 to 12 months studying and learning about the market while you save towards a deposit? I understand you are "desparate" to enter the market, but this is often when people make mistakes they might not make with more time researching under their belt.

Most investors will agree that the "boom" is well and truly over in most areas, and now its much harder to pick those properties that are going to skyrocket in value and propel you on your journey. This is even more relevant for those without experience in the market.

My advice would be to realise that you have made a step the vast majority of people never make, and not to rush in just to buy for the sake of buying. Spend every spare minute you have researching and learning, and the opportunities will present themselves.

Best wishes, and congrats for starting the journey.

Jamie

 

[Aceyducey]

Hi Usana,

Welcome to the forum!

I second what Jamie has said.

Rushing in is worse than taking your time.

The property market moves slowly. Get a feel for it before you start risking your money.

It is possible to lose money in property - and the best time to lose it is by buying just at the end of a boom into a high market when you have limited experience - ie you buying right now.

You have lots of time. Use it!

If you're trying to turn over a financial leaf - prove i!
Prove that you're ready to invest in property by spending the next six months saving your deposit & researching the market.

Then you'll be in a position to enter the market with the knowledge & capital you need to avoid major mistakes.

Remember the words of the song... 'where fools rush in'

Cheers,

Aceyducey

 

[Sunfish]

Listen to Jamie & Acey.

Thommo the Grouch

 

[see_change]

Listen to Jamie & Acey.

Thommo the Grouch

I'll Fourth that.

See Change

 

[Peter_Tersteeg]

At 26 I was in a very similar position. I'd just gotten my first job, suddenly had a bit of extra money coming in and I was enjoying it after being a poor student for so long. Needless to say, whilst I've always been disiplined with money, I wasn't keeping much at the time.

A year later my wife (then girlfriend) and I decided we wanted into the property market and started investigating. We were lucky that we could afford a deposit, because whilst we were saving, we also did a lot of research into the field.

We saved very aggresivly. Shortly after we were married we were able to purchase a property and haven't looked back since.

My advice would be to get into the habit of saving. Going into the market now with a high interest/low deposit loan could be a mistake which might take a long time to recover from. Use the time spent saving to do a lot of research:

1) Figure out what you'll need to do to get a mainstream loan and work towards it. Most brokers will happily work with you to figure this out.
2) Research the areas you might be interested in by going to auctions and open houses.
3) Research property related issues like tax, legal structures, negotiation, land value, tenancy obligations, etc. The list is endless.

When you do have to money to enter the market, you'll be much more confident about your purchase because you'll know what you're talking about. Financially you'll also be in a better position to be able to deal with unexpected issues.

Keep in mind that part of the investor mindset tends to be knowing when, where and what to spend you money on. Good investors know where they spend their money and thust tend to be good savers as well. Also remember that the first house is the hardest, so don't worry if it takes you a while to get there.

 

[Corsa]

Hello everybody,
I have a dilemma and I need some expert advice. I am 26 yrs. old and currently own no property or any other assets. I am desperate to get into the real estate market asap.
Up until this point in my life I have uselessly wasted my money and have very little at the moment ( I realise my mistakes and am working on it
usana

Hi Usana

Welcome to the forum. This post reminds me of myself 2 years ago. I was 26 and had no property but 10k in shares, and spent to much money on clothes, going out, and basically the high life.

What I did was spend about 6 months monitoring the property market, talking a lot over with my parents, and speaking to work collegues and friends who had invested, and read a lot of books.

I took the plunge with a little 1 BR unit for $57k that at the time no-one thought would rise in value. It was pretty crap but would rent out for $125 a week. So I went for it, and the valuation done by the bank even came in at $55k so I thought I had made a huge mistake and had taken on to much risk!! Luckily for me, it has been tenanted from day 1 and has risen in value over the last 2 years to $97k.

Since then, in the past 2 years I have purchased another 6 properties and the combined portfolio asset value is over a million dollars but with a fairly hefty loan. Most of these properties have been bought with "no money down" using some creative purchasing techniques and others just using cash and equity.

I had to think outside the square the same as you will need to as I didnt have any start up capital other than $10k to start with the same as yourself. Sit down, work out what your goals are, and go out and make it happen. In terms of non traditional lenders, go and buy a copy of "Your Mortgage" magazine, it has lots of ads and articles about non-conforming lenders as well as lots of lenders.

All the other posts above contain great advice, take little steps often towards your goals and dont rush into anything. Make sure all the fundamentals are there whether you invest in Shares or Property so that you can generate capital gains and income from the investment type you select in the short and long term. The key to making it work is to set up a budget, regularly save 20% of your salary, and contribute funds towards mortgages, live within your means. When you start to do this, you start to understand how you can service a mortgage that is quite large, and not lose any sleep about the risks that you are taking on.

I look forward to hearing from you when you take the plunge and start investing in your future. Good luck!!

Kind regards

Corsa