$2m in 22 months - Rob's story ..

Great write up! As everyone else has said, very inspirational! For someone like me, who is just starting out in the property investment game it is very motivating to read the story of someones success!

To get to the point of having 7 propertys in 2 years is a great feat in itself, I am hoping to get my 2nd next year and I'm already getting nervous about it (about making the wrong choice and so on...).
 
AndrewT said:
To get to the point of having 7 propertys in 2 years is a great feat in itself, I am hoping to get my 2nd next year and I'm already getting nervous about it (about making the wrong choice and so on...).
Click to expand...

The only wrong choice is the choice 95% of the population make and that's to do nothing.
Anything you do beyond that is a good choice. Like Rixter says - you don't have to get it right, you just have to get going. You can always course correct along the way.
Go for it!
 
Great story Rob. Just read the whole lot. :D

What size income were you on when you started this 22 month journey?

Cheers

Mick
 
Thanks for all the support and kind words from the Somersoft community.
I greatly appreciate it and I really hope that one or more of you have got something useful out of it.
Today was a bit of a milestone for me. The property that I settled six months ago was valued by the bank last Friday as part of my loan top up application.
I was hoping for a valuation of $300k (purchase price was $250k with a loan of $200k). The valuation came in at $320k. Giving me an equity release of $56,000. Not a bad effort for a month of reno work.
The tenant has just signed a lease renewal at $260pw, so all up, it's been a good deal for me.
For those who don't know the story behind the story, here's the link to the events that preceded my property investment journey in 2007:
http://www.somersoft.com/forums/showthread.php?t=53304
 
Well done Rob and congrats on the results....your hard work & perseverance is a real credit to you and a true inspiration to the SS community.
 
Equity Release and loan top up applic.

Keep the good news coming - we all win with you sharing.

With the equity release - do you use this to fund the 20% of a new loan so you do not have to pay mortgage insurance?

Does equity release always equal borrowing power? Or is this limited sometimes by the banks lending limit in some cases?

I have not heard of a loan top up - can you explain this?
 
Thanks Rixter. I owe you one for showing me the way when I thought I couldn't grow any more.

Samantha, When I bought the property, I used funds from an earlier re-finance to cover the 20% deposit, purchase costs and reno budget. So, my loan from the lender for this deal was $200,000 at an LVR or 80%.
So, with the revaluation at $320,000 I'm able to maintain my 80% LVR, so I get a loan top up from them (Homeside) of $56,000.
I've also re-financed another property and pulled a similar amount in equity out of it and I'll be doing the same thing with another of my earlier purchases very soon.
That will give me enough cash to use as a "deposit", purchase costs and reno costs on another deal.
This process works fine so long as you have the serviceability to meet the commitment. Homeside must be happy that I can service the additional $56k, or they wouldn't lend it to me.
Hope I've answered your questions.
 
Excellent result, congrats!

So will you use it as a deposit on another villa/ grouped dwelling?

What did you think of Sydney market? Will your next purchase be there?
 
INVSTOR said:
Excellent result, congrats!

So will you use it as a deposit on another villa/ grouped dwelling?

What did you think of Sydney market? Will your next purchase be there?
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That's the plan at the moment. May do buy and hold or some type of reno for sale. Depends on the deal.
There are a few things I like about Sydney at the moment. Some of the real estate there looks great, as well :)
 
Thankyou for the words of inspiration Rob. This site is extremely invaluable to me, not only has it been a great source of information, it's been a even greater source of inspiration. I am the sort of person that gets onto a great idea, follows it for a little bit then somehow losses interest and drops off! (In 2004 I designed a wetsuit with built-in water bladders, from what I could research - there was nothing else on the market....but I lost interest and lost out I believe)

This site has been the difference in this case, now I have built up an obsession like I had with car's only a year ago....and to tell you the truth - I haven't gone onto any car forums, or bought any car magazines since!

My partner can't believe it! (Either can I! :))
 
Rob Williams said:
Thanks Rixter. I owe you one for showing me the way when I thought I couldn't grow any more.

Samantha, When I bought the property, I used funds from an earlier re-finance to cover the 20% deposit, purchase costs and reno budget. So, my loan from the lender for this deal was $200,000 at an LVR or 80%.
So, with the revaluation at $320,000 I'm able to maintain my 80% LVR, so I get a loan top up from them (Homeside) of $56,000.
I've also re-financed another property and pulled a similar amount in equity out of it and I'll be doing the same thing with another of my earlier purchases very soon.
That will give me enough cash to use as a "deposit", purchase costs and reno costs on another deal.
This process works fine so long as you have the serviceability to meet the commitment. Homeside must be happy that I can service the additional $56k, or they wouldn't lend it to me.
Hope I've answered your questions.
Click to expand...

Well done Rob ... can I ask what you do for a living ?
 
Very inspiring ............

Hi Rob, Very inspiring Rob and I hope to do something similar.
I started my journey in Feb 2008. It has been 21 months but I am nowhere near you. Why? Why? I have got 4 properties in 21 months, but I learnt lots of strategies from your story, I am also following your path, only the different is WIFE & Devorse.
All the investors are not lucky. (wife/no wife)
I am going to see a good lawyer now.
Ha Ha.......Just kidding.:D
Really enjoyed reading 15 pages.
 
Last edited:
vsdabhi said:
r you. Why? Why? I have got 4 properties in 21 months,
Click to expand...

Maybe thats the biggets part of your problem-its not the 'number' of properties that matter....

Its the return that the overall portfolio is providing

I could own 15 $150k properties and have 'bragging' rights but limited C.G or negative cash flow etc

Or I could have 4 $562k properties that may be overall cashflow positive etc. Who knows, but I do know it is a numbers game, but not the number of properties....
 
Great story

Thanks for sharing Rob. I have a financial market background too and shifted to property about a year ago. I find that some principles like risk management works in any type of market. I wish you all the best and as long as you're having fun, keep doing it.
 
Update

If anyone's interested in how the portfolio has weathered the GFC, I'm happy to share some stats:

Total portfolio value: $2,385,000
LVR: 65%
Increase in portfolio net value since original post: 37%
Rents increased: 4.75%

I've spent the past 6 months (and still going) consolidating my position and releasing as much equity as I can and squirreling the cash in offset accounts.
I'm still a buyer if the right deal comes along, but I'm not going to stretch myself too far. The time isn't right, in my opinion.
Credit policies are tighening further and further and will continue to do so. Rates will continue to rise as a result of world events, bailouts and stimulus packages over which we have no control and to which we are not immune, despite the state of our local economy.
My projections are including some very harsh rate predictions so I can be sure to ride out the next few years without stress or fear.
The time to make those preparations is now, in my opinion, not when the cracks begin to appear and you're forced to take action in an environment which provides little flexibility.

"He will win who knows when to fight and when not to fight. He will win who knows how to handle both superior and inferior forces. He will win whose army is animated by the same spirit throughout all its ranks. He will win who, prepared himself, waits to take the enemy unprepared. He will win who has military capacity and is not interfered with by the sovereign."
-Sun Tzu, the Art of War
 
crc_error said:
can I ask a question, what is your cost of holding this portfolio per month?

Has this dropped much since you started?
Click to expand...

My monthly shortfall has decreased a lot over the last year or so as interest rates have declined.
I'm re-financing my fixed loans to reduce my monthly interest costs. This puts me in a better cash flow position and gives me some equity release as a buffer against future rate rises.
Current monthly shortfall is around $1900 per month. It was a lot higher than this, even before I purchased IP 7.
I pay little (almost no) tax, so a big chunk (more than half) of this shortfall is funded by my tax breaks.
Hope that answers your question.
 
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