$2m in 22 months - Rob's story ..
- Thread starter Rob Williams
- Start date
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"additional income streams" is a very important point unless you can generate additional "income" from the portfolio by doing a reno and sell.
All investors and business owners need to thik really reaally hard about where their next bit of income is sourced from and spread some of the concentration risk.
ta
rolf
"additional income streams" is a very important point unless you can generate additional "income" from the portfolio by doing a reno and sell.
All investors and business owners need to thik really reaally hard about where their next bit of income is sourced from and spread some of the concentration risk.
ta
rolf
Thanks for an inspiring read !
Congratulations, Rob.
Great story and 9 pages of kudos, wow !
Citius, Altius, Fortius !!
Amelia
Congratulations, Rob.
Great story and 9 pages of kudos, wow !
Citius, Altius, Fortius !!
Amelia
Congrats and good work Rob.
We'll definately have to catch up for a drink and a chat. I'm a little more upbeat since returning from QLD, except for the SA weather-but we do need the rain. I reckon having a chat with you would increase my motivation to continue on with my plan no end.
Project 1080
The project: 10 IPs in 80 mths.
We'll definately have to catch up for a drink and a chat. I'm a little more upbeat since returning from QLD, except for the SA weather-but we do need the rain. I reckon having a chat with you would increase my motivation to continue on with my plan no end.
Project 1080
The project: 10 IPs in 80 mths.
Anytime. I'm working on a reno at present but will be getting into a more normal routing in a couple of weeks. Sometimes, I need some motivation, too and it's great to hook up with other investors.
Thanks for sharing your story Rob. I found it very inspirational reading about your success. I can totally relate to your strategy and I hope you continue to fill everyone in on how you progress.
Good luck with your future success
I have the same feelings at times, especially in times like these where there isn't a great deal of price movement but it's posts like these that help.
Good luck with your future success
Rob Williams said:
Oh, don't we all? I was just talking to hubby about this yesterday, when he remarked that our net worth right now was not much better than if we'd not invested at all.
Whilst I know high LVR is out of fashion right now, that's where we are, and fortunately we have the cashflow to sustain it.
Come the next boom, the difference between - for example - $0 assets and $0 debt, and $2M assets and $2M debt, will become apparent pretty quickly.
I think it may take quite a few years, and you want to be sure you have the cashflow to hold in the meanwhile, but I believe the day will come when we'll be very glad we invested.
I think you will be right.............
I have been speaking to a few of the oldies around my area lately (Sydney Northern Beaches) and some examples of what they had to say........
"I paid $16,000 for this property nearly 40 odd years ago and now it is worth over a million, but back then it felt like $16 grand was more than we could ever pay back but we just had a go...............(Freshwater)
"........I was a panel beater earning $40 bucks a week when we bought this place for 28 thou, did a bit of a reno as the kids came along, now our neighbour just sold for 1.9 mill............(collaroy)
".our second investment property we paid 60k in 1980 and we only have ever painted it, polished the floor boards, and put in a new stove and it is now worth around 600-700 thousand." (frenchs forest)
So thats enough for me to keep investing in property...........
Big Tone
I think where I get a bit frustrated, when looking at the numbers, is seeing the amount of cash taken out of the pot and pumped into the Govt coffers with each transaction.
Even allowing for buying below market value, you can still feel like you haven't moved ahead (initially) when you look at the debt, the value of the property and your actual equity, overall.
I reckon I've forked out around $100,000 in buying costs in the last couple of years. That's money straight of my bottom line, up front.
Yes, I know I have to be patient and let time and compounding do it's magic.
Are we there yet .. are we there yet?
Even allowing for buying below market value, you can still feel like you haven't moved ahead (initially) when you look at the debt, the value of the property and your actual equity, overall.
I reckon I've forked out around $100,000 in buying costs in the last couple of years. That's money straight of my bottom line, up front.
Yes, I know I have to be patient and let time and compounding do it's magic.
Are we there yet .. are we there yet?
Yes, it's true that the day after settlement, your equity has actually decreased, due to purchase costs.
I just love paying land tax on a property which 1) makes a taxable loss within a DT that we're unable to offset against other income, and 2) has also dropped in value the past two years.
The pain of having to also pay land tax for the privilege of owning this asset really burns me. It'd better be ultimately worth it!I once heard a futures trader say that being a successful trader was all about how much pain you could bear.
I think that's true in life and investing in general.
That's a flashback for us ozperp. We had that conversation in May 2004. From that conversation came a most marvellous turning point.
The conversation ended with a realisation that we had purchased our houses for the simple fact of them supposedly "looking after us", but we knew after 9 years of hard slog that the reality was we were looking after them. The big hitters were constant bugging with maintenance calls, large land tax bills and low rents.
If left for a month or two, it was beyond obvious that we were tethered to them.....not only could they not look after themselves, but there wasn't a ghosts hope of them ever looking after us.
The silver lining ?? Well, wind the clock forward and after 14 years, two of them are just now wobbling on their own two feet. The other one is still hopelessly inadequate and needs constant attention and cash injections. There is talk of State Govt's increasing the Land Tax impost further, which will push them back again.
How anyone expects their housing and unit / flat portfolio to not only support itself, but generate enough spare cash to support a modern 2009 household expenses is beyond me. Room rates of $ 15 to $ 20 per night simply isn't enough.....but that's all the customers will pay. I gave up on the idea.
me too. unfortunately you have a 14 year head start - that's a long path ahead for me
This is why its important in my opinion to buy a residential property only when it can approximate cash flow neautrality, either on itself or through revenovations and development.
You also must give due consideration that property price cycles and rent cycles may not occur together. From 2001-2006 rents hardly moved yet property prices whent gang busters. Now the rental cycle is really moving, yet property prices are more stagnant.
I still feel its possible to one day just live off the rents from your residential property portfolio. You just have to acquire more property than is needed. Then as you approach retirement, you sell some of the properties to pay off debt and just live of the rent proceeds of the remaining properties.
This is the strategy originally devised by Jan Somers, and if it worked for her it can work for you, but it involves a 15 year+ time horizon, its no get rich quick scheme and thats why i like it.
The trouble is too many people try to turbo charge their investments, and often get themselves into hot water. Its also why i am very suspicious of all those property spruiking seminars.
Seeing as though Ian and Jan started in '72, that's 37 years.....a tad different from 15. Your (+) symbol is more important than the figure in front of it. I guess I'm not as patient as Ian and Jan.
100% agreed.
Your comments have some merit, but from reading some of your other posts it has given you access to cheap equity to fund your intial comm purchases is this right if not feel free to jump in.
So even tho the cash flow from your resi portfolio hasn't enabled you to retire, it has given you the oppurtunity to invest in something that does, so you just can't dismiss it as trash.
Regs,
RH
From reading Jan's books she acknowledges that investment in residential real estate is not a fast track to wealth. It is, however, a proven strategy over time. Many people do fast track the process (eg Dazz) by then using the equity gained in their residential portfolios to invest in commercial real estate, shares or to buy a business. Others may venture into developments. So whilst residential real estate in itself may not be a fast track to riches, it is used by many investors as a foundation and cornerstone to build further wealth.
Regards Jason.
