1million in Equity!

now i have to sit down tonight and draw up the future direction plan - purely for the broker tomorrow. i know where we're headed and how to get there already.
Nice one.

I'm still very much the one foot in front of the other kind of approach for now. I'll knock this first one over completely before I rethink strategy and how then to take the next step. Mind you, this first one alone is going to cost me about $1.5M in good debt! ;)

Cheers,
Michael.
 
Hi can anyone tell me if they have achieve their goal of 1Million in net equity from their property portfolio and how long it took them to reach that goal!

I want to do it in 3 years is it possible! Any ideas or suggestions.

thanks

Trom!

Trom, I think you'll notice that all the people who have achieved what you want to achieve ($1m in net equity) don't really look at it as a goal. Or at least, by the time they're close to it, they no longer think of it as a real goal. I recently hit $1m in loans, and though, 'Is that all?'

Say you hit around $1m in equity. You COULD sell everything, put the money into shares and fixed income and make $50k a year. By that time you should have a decent idea of property investment, though. Are you going to be content with 5% returns that probably aren't even going to keep up with inflation? Probably not. A lot of the members could realistically sell everything (or restructure) and make a 'decent' salary just from passive income. The 'challenge' and 'fun' factor kicks in.

My point? Don't go around and ask whether it's possible or not. Everything is possible. People come up from dirt poor in third world countries to become rich. Possible isn't the issue. It's how you approach it. As everyone said, the fewer resources (salary, existing savyings and assets, etc) that you have to work with, the harder it is.

Stick to the basics. Develop a savings habit, read investment books, go out there and start researching and buying within your means.
Alex
 
Hi guys
Achieved the mil mark a few years ago after starting investing in IP's in '97 (when everyone said it was crazy to do so!)
Think the trick is to hang on to the properties (even though all around you are telling you you'll go bankrupt!) then all of a sudden,after a few years in the doldrums feeling you're getting nowhere, you find you're in a boom situation (particularly in Perth, as is my case) & your $500,000, then 1 mil triples in a few years & suddenly the ship has come in!
I think the hardest thing to do is to trust your own instincts & take no notice of 'experts' & people 'looking after your own interests' (they're not at the end of the day, however good their intentions might be!), particularly now in this economic phase, when the media hype is to 'sell, sell, sell' because it's all over, red rover, apparently.
Listen to the crew on this forum- they talk more sense than any 'expert' I've ever met! (talking from experience, having just lost $40,000 on managed funds!!!!- good job the properties are still there, that's all I can say!)
just my tuppence worth
Ann
 
Hi guys
Achieved the mil mark a few years ago after starting investing in IP's in '97

Good old hindsight. Funny how even in the best times to invest there were still people saying its the wrong time. There are a few posts from 2003-2004 suggesting Perth was overvalued and they were waiting for prices to drop.
 
hi Tom, we've made well over 1 million in equity in 18 months (our first buy was Karratha so needless to say this set us up very nicely).
our philosophy was to be quite agressive in our borrowing & basically go for broke. We did all this before the boom & covered most corners of WA.
My hubby has now had a "career break" (he's 41) & is hoping to study architecture at uni next year (something he's always wanted to do). I'll be taking a career break very soon & looking after our properties.

So it can be done.......!!:)
 
A FP and an accountant told me that a PPOR should never be put into the equity balance.
I dont see why not as we have used our PPOR to leverage off to buy other investments, and l dont have a problem with selling it, but l do know some people get very attached to their homes so they should have a setup in place to protect their home if thats the case.
cheers yadreamin
 
Trom,

I have the same situation like you. I used to work for a government and got a good pay. I did not like the job and the boring life. I Quit.

By accident, I have achieved more than $1m in equity over the last years. However, without certain prerequirsites (such as you have aleady few millons there), it is IMPOSSIBLE to achieve $1m next 3 years again (market condition).

Be realistic, donot lose everything trying to achieve impossible goal.
 
I took 9 years to get my first mill....now working on the 2nd...mill that is. By my projections the 2nd mill will only have taken 5 years. For me it's an indication of how much I'm learning, and that learning is exponetial.:) Not as fast as some...but fun for me. Enjoy getting your first mill.:D

cheers
Sharon
 
I think you'll notice that all the people who have achieved what you want to achieve ($1m in net equity) don't really look at it as a goal. Or at least, by the time they're close to it, they no longer think of it as a real goal. I recently hit $1m in loans, and though, 'Is that all?'


Alexlee...I was thinking along those lines too.

I have 1.3million in equity if I include my PPOR. I was looking at what to do next, was that it? and how to create passive income so I could stop working at a job I did not particularly want to do anymore. Have been looking at a few options which include:

1. Buy a small business franchise. The one I was looking at was worth about 400k to purchase, with a return net profit of 100K (with a manager in the shop), 150k (self-managed). Purchase 3 franchises, put 3 managers in them and you should have a relative passive income of $300k a year (tax will have to come out of that). Still not bad for investing 1.2million!

2. Sell all my properties and put it in the bank at 6.5% = $84500 per annum minus tax…for doing nothing! but I would also have to rent or borrow to buy a PPOR!...probably not the best option, but then it depends on you needs?

3. Do nothing, keep the properties going maybe buy more get more debt, work more??? Yes it should in theory all be worth 2.6million in 7-10yrs…then what? Do you just keep working etc etc…That’s 10 years more out of life!

In the end you have to decide how much is enough for the life you want…if living on a beach surfing all day is what you want…then 1.3 million in the bank and living in Thailand would do it nicely! Having a plan to make a million in 3 years is great…then what…3 years more for your 2 million? 9 years more, 20 years more…I guess the question has to be what makes you happy in the end? Having 100million in the bank will not make you happy necessarily if all you want to do is surf…sure it would be great to have etc…but if it took 50 years to achieve then you have wastes surfing time!… I believe someone wiser than me once said something to the effect that…you can’t buy time, not matter how much money you have.

Anyhow, I guess that the plan to have 10,20,30 million or 100 properties is not good enough in the end…you need to plan for what makes you happy after you have achieved some relative comfort in the equity side of life!..I don’t believe equity alone can make you happy.

Just feeling philosophical today…so my 2cents worth…
 
Hi Tom, We did it in 5 years. Never our goal though, heck I've never earned over $30k per ann, the missus on casual earnings and raising two small children etc. Making a million, for us, has been a consequence of the process we've used all along the way. Buy neutral, positive geared properties, in good locations, put the tenants first - a property's worthless without them, and buy older heritage homes in likewise suburbs that need fixing up.
I wish you all the best in reaching your first million.

Regards Dean
 
Rixter, are you finding that you're getting much cap growth from your townhouse strategy?

Asdf, the last IP I bought in Brisbane last year I've had an increase in cap growth of 13% plus an increase in rental yield of 19% in that one property alone. In other property there Ive had 47% Cap growth in the last 3 years. Across my entire portfolio its been massively more due to my Perth holdings.
 
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Can somebody give me an explaination as to why everybody is so enthusiastic about having debt (even good debt) - I may have misread but I am a little lost?
 
Can somebody give me an explaination as to why everybody is so enthusiastic about having debt (even good debt) - I may have misread but I am a little lost?

Oi, who's 'everybody'?

It depends on where you invest and when you can expect capital growth as to how much debt you want. I have almost finished with debt at present, after amassing $1.4mill of it at one time. I would imagine when I feel the time is right, I will again amass a ton of debt.

Debt is just a means to an end. It is a side effect of gearing for investment.
 
Can somebody give me an explaination as to why everybody is so enthusiastic about having debt (even good debt) - I may have misread but I am a little lost?


No , You're not wrong Peter . It's one of the forum fetishes.

Many members seem to think you should have an ever increasing debt , and if you're not doing that then you're not really an investor ( maybe that's simplistic , but to me that seems to be the gist of it ).

For me there's obviously a place for increasing debt at the right time in the cycle, but I'm also quite happy ( as is Brenda ) to consolidate at certain times. I've never done a full analysis , but a recent basic calculation in another thread , showed ( for me ) that in certain circumstances, selling and paying CGT , can actually give me more capital and cash flow to take the next step. ( IMHO this is applicable when we 've had strong growth , with no significant anticipated growth in the near future ).

See Change
 
Good debt has dangers of course. However I too am looking to increase it over the next 5 years because the upside outweighs the down for me. I don't have multi-millions in equity yet.

To be fair to the rest of us, I don't think Peter Spann, Brenda Irwin and See Change have a net worth representative of the forum, a bit skewed to the right of the curve I think. :)
 
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Good debt has dangers of course. However I too am looking to increase it over the next 5 years because the upside outweighs the down for me. I don't have multi-millions in equity yet.

To be fair to the rest of us, I don't think Peter Spann, Brenda Irwin and See Change are have a net worth representative of the forum, a bit skewed to the right of the curve I think. :)
I'm only skewed a weeny bit. $2m equity and still a single income family with 2 dependants.
Peter has waaaay more skew than me.:D
 
Can somebody give me an explaination as to why everybody is so enthusiastic about having debt (even good debt) - I may have misread but I am a little lost?

no so much enthusiastic about the debt ... but the means to the ends that it affords.

by increasing debt this week by another $300k means i get to hold a 3-4 townhouse site (with a good rentable house currently on it) in a top location which, by the time i develop it in 2 years time, the final development will have an valuation equity of at least the land value.

but we plan to holds these - along with all our other townhouse developments. currently developing and selling the single dwelling premises to fund purchasing the townhouse sites.

it is a means to an end - and the end is worth getting excited about - therefore every stage of the journey is worth getting excited about.

i'm sure peter, seech and brenda all used good debt to propel themselves to the next level thru using it intelligently.
 
Hi can anyone tell me if they have achieve their goal of 1Million in net equity from their property portfolio and how long it took them to reach that goal!]
Trom,
I think some may be able to achieve the magic i million mark a few may even get to that level within 3 years but for us we hit that i million
mark about six years ago, after about 16 years of ups and downs
in the property markets and other areas of investment..
But as other people say it will always be different this time around
it;s always been the same for just try and be a step beyond the
smart people in this forum..good luck willair.
 
... without certain prerequirsites (such as you have aleady few millons there), it is IMPOSSIBLE to achieve $1m next 3 years again (market condition).

I must disagree. I am certain that there are new investors who will achieve that target. I wonder on what basis you think it is IMPOSSIBLE?

regards,
 
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