SourceWe are on our 3rd property now including a PPOR.
We are a single income familly of 6, 4 kids 13-4 and a stay at home mum.
I work for Defence and earn about $52000pa befor TAX.
Things are certainly tight most weeks, but if you have willpower, forsight and courage you can do it on a small budget.
For us its simple, we do without. We by Bi-Lo groceries. Cheap cars and clothes. We don't go on holidays or weekends away.
The only thing we don't scrimp on is our kids education. We budget hard and put our kids in a private christian school.
I think the secret is not starting too big. We bought our first house in 1995 for $32500. We squeezed into it and spent every spare dollar we had paying it down.
$32000 - 3br Whetherboard
$110 000 - $120 000 - Todays value
Few years later we used the equity to buy again. Once more we went small, only a little bigger than last time. $122,500.
$122,500 - 3 brm Brick.
$130 000 - $140 000 - Todays value
We then purchased our PPOR.
$165 000 - 4br brick
Todays value - Unknown. Only bought late last year.
We had no deposit to speak of for first house and used min of equity to finance other houses since then.
Only advise I can give is:
1. Start small and work your way up.
2. Learn to only purchase things that are going to increase in value.
3. Realestate is very forgiving if you invest long enough.
4. Realestate is a long term investment so don't rush.
5. Average income earners want to rent and buy a house aswell so don't just buy $200,000+ houses.
6. Learn to use the banks money and don't be afraid of debt. (BIG ONE!!!)
My wife and I are only 33.
Like many others here I'm also 23 (must be a lucky number)...
I came about my first PPOR in a funny way. I was living at home with mum and dad when we got evicted from our rental property in 2006. (we only wanted month-month)
So after weeks of searching and failing to secure a rental property I went to an open inspection thinking it was a rental (It was a friday night...long week brain fade) anyway, I asked the agent "how much" to which they replyed "210", I thought gee not bad for a two-bedroom unit in eastern melbourne (20k out from CBD) and asked for the section 32.......
The agent gave me look and said $210,000 not $210 mate!...... so feeling rather I but an offer of 220K as I was sick of looking at rentals all week and was over filling in forms. Offer was accepted that night and I moved in 30 days later and charged mum and dad rent (sorry mum and dad, but thanks).
Well that was 18 months ago now and after renovating the unit and spending 25K on doing a really nice job it was valued at 310k+ last month (loan $200K).
Mum and dad have moved on, but I do now have a wife.
In feb 08, I got ichy fingers with my own unit finished and from reading API and somersoft I brought the unit down the street for 275K which rents for $260p/w, which is now worth 290K and can easy be made into a 3-beda in the future (it already has a DG)
I guess my point is I'm only 23, only have been working full-time for 3 years earning 50-60k, I had only 8K deposit and FHOG when I purchased my PPOR (no money from parents or anything). Sure I might be 500K in debt, but I now have over 100K in equity also after 18 months and its growing everyday (hopefully). More then the crappy 50K I earn each year anyway, which has shown me property can work!
In that three years I also travelled O/S, got Married and still shop still eat freash meat and veg each night
I sought of fell into property, taken on lots of debt (good debt) but hopefully like a snowball it will get bigger and better.
Wish everyone the best and lets keep it going!
SourceA story about a newbie...please help me with where to go from here!
Hi. I have been reading, reading, reading so much about property investing, and getting so muddled. I thought I might post my thoughts here in the hope that I can get some direction.
So, this will probably be a little rambling because i don't know what information you need to give me a gentle shove in the right direction
Typical start to the story: worked hard, saved hard. In 2005 bought $350k property (small acreage, good land old house), again worked like a dog to put just that little bit extra in it each week and so current mortgage is just under $300k. Haven't had it revalued as property has been flat as a tack around here so don't expect it to have moved much.
The conventional advice I read says sell, buy smaller, build up etc. This is not the path I want to take. I could go into reasons etc but there's not really much point because such things are different for everyone. I'm firm on this.
I work in a nearby country town. The second piece of advice I read a lot of is 'get a better job'. Mmmm. Ok. Doesn't work like that in a country town. Because I got myself an education I do already have one of the top paying jobs in town ($50k pa before tax).
Now at the moment I can pay all my bills and put food on the table. There are no luxuries. I started below the poverty line, so I know what 'no luxuries' means.
Just this last year since my performance review at work I've been managing to start saving again. It's not much and it's tight, but it's been 10% of my gross wage for 12 months now. I direct debit it, and despite all the quips I DO miss it lol. But I still don't touch it.
My goal is to buy a second, larger farm which would cost significantly more and wouldn't necessarily pay for the mortgage repayments in entirety (but hopeful would to a certain percentage).
How should I prioritise my goals to get there? To get my ppor I just scrimped and saved, but to do that again will take me a lifetime to get where I want to be.
I feel strongly my first goal should be a cash/highly liquid emergency fund. Have read recommendations of minimum 3 months wages for this.
Ok, what next? I prefer to grow what money I have than get into (more) significant debt. But then, I don't have enough money to grow, do I? Then again, surely if I'm that uncomfortable with a strategy involving high debt I'll not manage it as well as some other strategy I'm more enthusiastic about...??? Do you see how I run myself in circles on this with all the 'advice' that's out there?
Where do I start? How do I get from A to B?
SourceI bought my first house when I was young and foolish. It was a dump, and I fixed it all up and it was lovely. And then sold it 5 seconds before the boom for $notmuch and the thing is now worth a fortune. Bah. Fixing it up wasn't so bad, just chattered with other people about what to do and went off and did it. When I bought it the bank decided I was on an income of about $18k a year - I was a student and my only income was tutoring/lecturing.
Second house was also a dump. Fixed that up too to make it nice to live in. It was supposed to just be a weekender but we ended up living in there fulltime. Didn't make any money on this one, but it was fun.
Third house I bought on the back of hearing about this forum - it looked like it could be cleaned up, subdivided and some money made from it. Figured if people on this forum can do it, we can too. And we did, although the HIA order really bit into the bottom line. Mind you we're still waiting for the buyer to get finance, the house is just under contract, not sold.
Now we're in a nice new house and I'm sick of renovating crappy old houses lol
If I was on a pension now with no kids and trying to get financially independent I'd be getting another house around the $40-50k mark, tarting it up, selling it for $110k and repeating a couple of times. But maybe not at 50, although I know a couple of people over 60 who do this kind of thing. If you're less handy and have more money to start with you could build a new place in a regional on some cheap land, do the garden up, sell and repeat. Too hard to do this kind of thing in the city on an extremely low income unless you've got a massive amount saved up and don't need to deal with banks.
Sourcemight as well chip in my story.
born in '83 but didn't start investing until 2006. That was my final year at uni and I was also working part time. Mainly interested in shares back then so started by purchasing 1 stock with the 4k I had saved up. Kept saving like crazy and once I had minimum 4k I would go and buy another stock.
Graduated 2006 and went on an overseas holiday. Came back start of 2007 and got an offer at the place where I did my work placement/industry project at. Started with an average salary 40k and all of a sudden I felt rich (you have to be a uni student to truely understand this newfound fealing lol). Anyways, wanted to buy a house but was told by many that I had to wait for the probationary period of 6 months and also to be placed on a more permanent position (initial position was temp for 1 year). Being young I got really frustrated and didn't want to wait so I hit the footpath around work hours to try and find a way for someone to loan me.
Over a couple of months I visited many a banks and MB before I met this great guy at westpac who was willing to loan to me. Funny thing was this was the 3rd Westpac branch I approached. Learnt a valuable lesson from this excercise. Everything boils down to people. No matter the rules in place or what certain people say, everything ultimately has to be approved by people which means rules can be bent to a degree. All you have to do is find those people and justify/sell yourself and your vision/goals.
So, I got preapproval and now just needed a deposit. Was gonna use my shares portfolio but didn't want to sell cause they were doing great. Decided to approach my parents who gladly lent me the deposit and purchasing costs. So I went out and just bought a house around mid 2007. Purchase price was $382,000. On top of that I still have my shares portfolio which is around 90k and have also managed to save up a further 15k. My position is also permanent now
I have 2 properties in Brisbane valued at 770k (combined) with loans of 485k one is IP that rents for $350 p/w other is ppor.
On the other side of investments I have 295k (not geared) in about 10 diff shares and 210k in capital notes/bonds in NZ (not geared) returning only 9% as they are a few years old and due to mature in a couple of years, and around 60k in term deposit that I haven't decided what to use it for.
I have a good job for my age and have worked hard, I recently changed jobs and was offered a state sales managers role at nearly 100k but turned it down for another role paying 70k (less than I was on) that allowed me more freedom and less stress.
I haven't forgone any so called luxuries either, I have a brand new car (novated lease paid by work), I went overseas to the states and NZ in the last 12 months. I have the large TV, new furniture, nice food, eat out and so on, but I don't waste money.
On the property front I am taking the wait and see approach as I'm not confident that the timing is right to buy, but I do have plenty of capital/equity for when I feel the time has come.
It's good to see there are other's of similar age taking a proactive approach to financial freedom as I don't have a single friend that does.
I have had shares since I was about 14, the first shares I ever brought were $3000 in the Warehouse at the float they ended up returning about 400% a couple of years later. I then put all that into a company called BestFoods, this was then taken over a few months later with the accepted bid 50% over what I had paid. My dad was a business analyst for some of the largest companies in NZ and let me know what I should be doing. We owned a orchid and I used to sell the non export fruit to local markets and shops and my parents would let me keep the money, they always took the approach that if I was enterprising enough to come up with the idea they would let me reap the reward, they were a bit suprised when i told them I was making around $800 a week they stopped giving me lunch money after that. I just built from there, I didn't finish high school as I found it so boring I only went to uni for one year and also found that boring then started my own business. I moved to Australia from NZ around 4 years ago.
SourceWould have liked to have been more aggressive with investing in the past 7 years.
We started with our first PPOR/IP (switched between both) 8 1/2 years ago when I was 26 years old, end of 2002.
We were on lowish combined income of about 70k.
Sold this and bought old rundown PPOR to renovate ourselves to create some value as we were cash poor.
House this time, first one was an apartment.
This was 7 years ago and is still our PPOR.
Since then, only bought one IP in all that time, just under 3 years ago.
No real research done, just a local purchase because it was only up the road and I knew we should be buying something eventually.
In the meantime, started a business 5 years ago from scratch, and sort of distracted me from investing.
Must have missed alot of investing opportunities in that time, however, now earning 10 times the amount we were when we started (salaries+net profits).
I suppose the business we started, planning to make a couple hundred extra dollars a week to help us invest has done it's job in creating cashflow.
We have plenty of cash now, just been too busy working to get around to investing it !!!
Property investment has always been my number one priority since I learned of it and found this site about 9 years ago.
But I realised we had to set some solid foundations and increase cashflow for serviceability because of our low wages and PPOR mortgage, otherwise property investing would have been a long and slow road for us.
Just got a little sidetracked on the creating cashflow part.
Will definately be making multiple purchases this year.
How we bought 20 IP's in 5yrs
Hi all, Lily has requested we tell our story of how we bought 20 IP's in 5 yrs.
We're not sure how it happened except we were blessed, lived frugally, & madly kept paying off debt.
In '98 we were a single income family with 2 children (still are).
Our only assets were a block of land val $10k & Life Ins policy cashed in for $19k.
Will try not to bore everyone too much so will break up thread into parts. Here goes nothin.
IP1- 8/1/98 $125k. rent $125pw. Bank val now $160k rent $140.
IP2- 4/12/98 $27k. renov $5k. rent $100. Reval $46k rent $105.
PPOR- 3/12/99 $70. Bank deval 2000-$60k. Reval 2002 $75k.
IP3- 10/11/00 $105k. rent $170. Bank val now $185k. rent $180.
Cheers Brenda & Les
Bored yet? Here's some more:
IP4- 17/8/01 $55k rented $135. Today bank val $80k. rent $145.
IP5- 28/2/02 $50k. renov $2k. rent $130. Reval $65k. rent $135.
IP6- 7/6/02 $35k. renov $5k. rent $125. Today bank val- $80k.
IP7- 14/6/02 $58.5k. rent $140. Today bank val- $80k.
IP8- 24/6/02 $64k. rent $145. Today bank val- $80k.
IP9- 4/10/02 $65k. rent $145. Today bank val- $80k.
IP10- 14/10/02 $65k. rent $130. Today bank val- $80k, rent $135
Half way there.
But wait, there's more:
IP11- 20/10/02 $65k. renov $3k. rent $145. Bank reval- $80k.
IP12- 13/11/02 $36k. Rent $90pw. Today rent $95pw.
IP13- 5/12/02 $92.5k. rent $160. Today bank val- $110.
IP14- 24/1/03 $52k. rent $120pw.
IP15- 24/1/03 $52k. rent $105pw.
IP16- 31/1/03 $38k. rent $100pw.
IP17- 7/3/03 $30k. rent $95pw.
IP18- 14/3/03 $122k rent $185pw.
IP19- 28/3/03 $100k. rent $155pw.
IP20- 16/4/03 $105k. renov $3k. rent $185pw.
Whew, made it.
Here's xtra info:
All are houses on P&I loans with most on 30yr terms.
Net rental= $100,010 pa, less P&I payments of $104,068 pa= $4068pa or ave cost per IP per week = $3.89.
Current LVR= 80%
IP1 currently being sold for $185k to payout PPOR & IP2. Then refinance for 3 more IP's around $52k in July.
Once you start investing its like the battery bunny on TV, you just keep going & going.
Hope this is what you were interested in seeing, Lily. Sorry to bore everyone else.
Cheers Brenda & Les
SourceHi! I'm new here, my situation
A little about myself.
I'm still quite young at 25 years, I own 4x interest only properties at a value of $1.5million with a total debt of $1.1 million.
I've been investing for roughly 2 years so far.
I'm looking to add to the portfolio slowly, maybe 1 or two properties per year from here on in and my main goal is to live off equity once rents are equal to all repayments. (I'm around 12k out before tax atm)
I'm crystal balling by adding 7% to my total portfolio per annum, and in a few years if all goes right (3 years or so) I can quit my job and go travelling like I've always wanted.
I plan to take a 240k LOC and use 60k per annum for four years.
I calculate (if all goes well) that I will have more equity than I originally started with after this time-frame and will take it from there.
Problem is. It seems too good to be true, am I missing something here?
Lets say in 3 years I have a portfolio worth (assuming no more purchases) $1,837,000 and debt of $1,100,000, rents cover repayments. (standard 7% compounding)
And I take $240,000 to live off for 4 years.
I now have loans of $1,340,000 and $2,407,932 (thats $1,067,000 equity) and rents have been rising during that four year period.
The only 'flaw' I can see would be 'if' property did not do much within that period. Causing me to have to get another job at the end of my four year trip.
What do you guys think?
Good forum by the way, lots of advice
SourceSome great stories on here, thought we may as well add our own fun journey!
Laura and I met in early 2005 after both finishing school in 2004, both 18 yo. Over the next 6 months we both managed to start university, drop out in first semester and move out of home! We both worked basic jobs around $30-35k and by using garage sale furniture and home brand everything actually saved quite alot.
This led us to very different paths to our friends who are all still at home, most still at Uni after changing courses. We saw that the standard 'career' was not what we wanted and through a brief stint with a direct marketing company were introduced to books such as 'Rich Dad' and our lives were changed forever!
from the start property was something we could grasp and find interest in so in 2007 (Ages 20&19 at the time), we were able to buy a 2br unit in small group Oaklands Park, SA. This purchase was made possible with the first home owners grant as well as the mortgage being backed with one of Laura's parents IP's as security. Obviously we are forever indebted to them for this as it showed alot of faith in us in allowed us into the game probably a couple of years earlier than otherwise possible.
We bought for $202,500 and lived in the unit for the next 13 months. During this time we had some interesting times with a break-up and the reduction in my working hours as I completed both a PM certificate and started a degree in Property & Business externally (30 hrs job & Full 4 subjects a semester externally).
A big change came in November 2008 as we became engaged and decided to renovate the unit. This was a huge learning curve as we lived in the unit whilst ripping out the kitchen, part of the bathroom and repainted everywhere mostly at night! We tried to do most ourselves and definitely found our passion. We finished in early 2009 at a cost of around 12k with most of the cost, around 6k, going to plumbing and electricity. Ikea provided the kitchen and as we installed and tiled the splashback ourselves only cost around 2.5k.
In the end it ate our savings and made a start on my credit card so was slightly stressful time when went to sell March 09. Of course everyone at the time was shouting D&G and telling us worst possible time to sell but due to our research, much on Somersoft, we saw that units were still in huge demand with their affordability in good areas. The first open saw 80 seperate groups of people and a day later we accepted an offer of 258,500 (New high price for the block) and we were an extremely happy 22yo couple!
Pictures of the reno and result here - http://www.flickr.com/photos/4937524...7623747417635/
Even though mortgage costs etc realistically need to be factored in there is no other way we can think of that would have given us, after selling costs, tax etc, almost 40k cash in hand! The path was now clear and after paying off my credit card and Laura banning me from ownership of another one we started looking for the next IP.
After almost purchasing a PPOR which would have seen us stuck for a very long time we settled on a 3br trust home on a large 800sqm corner block in Smithfield Plains, SA. Again all family told us we were silly buying up there but you dont have to look far to see how much growth is happening in Northern SA both in infrastructure and population and we are very happy with the purchase. Purchase price was $186,250 and we were able to rent out straight away after spending 3k on cosmetic reno for $195 p/week. This is slightly under market but got a great tenant and have had no issues to date and as loan is variable it is currently around $50 negative p/week with property value around the 200-205k mark after almost 12 months.
The rest of our 'winnings' went inevitably to our wedding in Dec 09 and the subsequent 5 month honeymoon that is about to end iwith a flight from LA home in about 3 days!
This choice was made after being heavily influenced by the '4-hour work week' by Timothy Ferriss which has shifted some of our mindset and helped us make the choice to quit our jobs before the wedding and take this 'mini-retirement' to Latin America for our 5 month honeymoon.
Now coming back to Aus with VERY little in cash and no job we are still very excited for the future still holding our IP and recently a small share portfolio to diversify our investment learning. We have also started experimenting with online income and we have already learnt alot through our experiment with our property blog below. This is an exciting project it is allowing us to spend more time researching and being involved in everything property as well as the online community so would love any feedback
I am currently 1 year into my degree at 23 and start my second year, still externally, in second half of this year so will look for only part-time work upon returning home with Laura full time. At this stage we are looking at property under $150k in regional NSW, VIC, SA and TAS and hope to make a purchase before the end of the year which would most likely be neutral cashflow.
Sorry for the long post but hopefully gives people more background and insight into our posts on here. Im sure many things haven't been covered well enough so please ask us anything, we are very open and check Somersoft daily so will happily respond!
Ben & Laura
SourceMy Commercial Story
For the benifit of budding Commercial Investors....
Due to the residential market peaking, I decided to buy my first Commercial property. I was after positive cash flow and looked to Brisbane to find it.
Late 2003 I purchased an Office/Warehouse: (280 sqm) for 470,000 with as an ongoing concern with a 3 year lease (extended at my request).
Return - 9.2% + outgoings paid by tenant
Location - 3k north of Brisbane CBD
Thought I would self manage. Applied for an ABN and registered for GST. Looking good! until rent was due...Here began 12 months of suffering...Phoning tenant, chasing late rent, broken promises etc... I ended up getting about 2/3 of the rent due to me. Finally my legal advise, late 2004, was to ask the tenant to leave and it wouldn't be worth persuing the arrears due to:
- Two dollar company
- no director garantees
- no bank garantee
- they were going down
I still had a lot of faith in the property. All I needed was a new tenant. It took 6 mths to find a new tenant. The offer was signed @ 46,000 gross and with some more frustration was converted to a lease 2 months later (complications made it take longer than the usual 14 days).
The tenants are now settled in.
The property is being professionally managed by an agent.
The Botton Line:
I am now inducted, I'm no longer a commercial novice, I've suffered a lot, I've learned a lot, the only way is up!
- Get a bank garantee or a Directors garantee. ( I prefer the cash)
- Personaly I believe managment by an agent is the way to go.
- Don't consider an offer to lease as a garantee that a lease will be drawn. Try to make offers non binding for you so you can look at other offers if a better deal comes along at the same time.
- Make sure you can handle a 12mth vacancy. Mine took 7 months
- Open list with a couple of agents, when looking for new tenants, if the property is vacated. Gives you much more exposure.
The property is now worth @ $ 570,000
Happy Commercial Investing.
So i'm another one born in 1981. I have also been around property all my life, in fact being the bright kid of immigrants I sort of ran the property portfolio as a kid.
so a couple of years ago tenants burnt down and destroyed an IP which i spent the first 6 years of my life in. My parents turned around and told me it was all mine and could do what I wanted with it. So we spoke about it and my parents suggested I develop the site. i think there could have been 3 townhouses on it. I was only 23 at the time, earning good money so it was do-able with my parents helping me a little bit, and going guarantor.
Then my parents suggested I build two townhouses instead with one being bigger and better than the other. The better one I would live in, and as they said the other would be a IP and if i'm off on mat leave i will still have a source of income. This is what I planned to do, went to council and all, made appointment to see the architect and i was ready to go.
I remember the night before I waked into my parents room at like midnight as I had spent the past two days thinking about what I was about to do, and I had a change of mind.
At the 11th hour it had sunk in that I was getting a block of land in Melb, east side, 12km from the city....for nothing. I realised that, this sort of opportunity (and luck) will never come again for nothing. I understood that the price of land would only increase and it was always my desire to continue living where i grew up rather than in whoop whoop. So we spent a few hours that night discussing and the next morning and I decided that I was going to build my dream PPOR. Re scheduled architect appointment for a month later and I gave him my brief of what I wanted and after while of going back and forth I got exactly what I wanted.
So here I was at 24 about to build my PPOR. It was exciting and scary. I was the owner builder (well dad was) I just said what I wanted and it was done. I maximized the land, I had/have no interest what so ever in gardening or mowing lawn so my design took that in account. I had no budget, I got what some would call a McMansion. I wanted bricks that cost $1100 -1200 per thou, I wanted commercial windows, 2pac kitchens and vanities, black galaxy granite, downlights throughout, 3.7 something cielings in the entry, hall and living area, 2.7 throughout the rest of the house, stainless steel rope balustrades, 2340 doors, 140 skirts, 90 archs, kohler basins in all bathrooms and toilets, solid jarrah timber floor, jarrah staircases, glass balconies and alfresco, bifolds, office downstairs with separate entry, nexion keyless front door system. So my PPOR is a few months away from completion. I have NO regrets what so ever. I should also add that thanks to my parents and especially partner who did the carpentry and organized quality tradies at mates rates, the house ended up costing much less than i thought it should of. I also would like to add that my PPOR loan is quite small and paid for by the money recieved from rent of other IPs.
Now most people here might think that I was insane by not developing the site but as I mentioned earlier about my opportunity i'm glad i didn't.
Now i'm just soaking up all the info on investing like a sponge until our next move which will be probably some time in 2009. I don't want to do anything until my house is complete and i'm in there.
My partner is a chippy and builder, he has a job as a builder at the start of 09, work lined up for other builders as a chippy on development sites throughout 09. We'll do our plan and figures, involve our family if we need to and do our own developments. No doubt down the track there will be another dream PPOR designed and built.
SourceWow, some amazing and inspiring stuff here. I'm blown away by what some of my peers have achieved. While it's true that age isn't the whole story, there is a level of emotional and financial maturity in some of the stories here that I just haven't seen in most of my peers and I'm happy for those who benefit from it.
I'm 26 and own a couple of IPs. 1 in Canberra, bought 2001 for $145K, now worth $350K.. I spent the next 4 years ******* my money up the wall and getting into all kinds of trouble. I did however get to travel around the world, and fell in love with Europe.
I met an amazing girl and settled down. She had a 2 year old daughter from a previous (abusive) relationship. We've been together for 2 years now, I bought a place in Melbourne in 2007 for $320K which we now owe $270K on, we moved in, and in 2008 I've bought a further 2 IPs in Melbourne for $215K and $240K.
It took the responsibility of a family to straighten my priorities out. I love them to death and quickly got a second job to save up for the deposit for the place we moved to. We're lucky to have everything we need in life.
I've been working now for 8 years, and have been doing 2 part time uni degrees for the last 3 years, in my 'spare' time. I'm disappointed that I don't get as much family time as possible, but I'm motivated to build us a future, and I'm proud of where we are. Neither of us came from wealthy or privileged backgrounds, and while that's hardly the mark of a man, it's been a big ride for us.
I'm far from finished in property - with around 300K equity all up I'm spending my time working hard and considering my next move. I have a pretty straightforward goal of adding another 1M to my portfolio (in value, not in equity) by the time I'm 31. I don't expect miracles but I look forward to being able to choose when and where I work, and spend more time with my family. Maybe I'm crazy, but I'm also looking forward to a few more kids around the house.
Most of all, I'm 100% happy and comfortable in my goals. I don't want to be rich, I just want to be one of the enlightened individuals that have the means to make their own life decisions. There's nothing better than the feeling that I'm slowly extracting myself from the corporate culture that I despise.
SourceWell done everyone.
OC1- I am very impressed. I first stumbled upon Somersoft a long time ago when John Burley and wraps were all the rage. I didn't have the guts to do wraps and no money to attend Bootcamp though I did buy the readings/folder.
Bought first property at 23 yo. Made over $200k on buying and selling in the past few years.
Property networth of approx $350k with about another $100k of cash and shares. Car paid with cash and a house full of new furniture and electronics in storage (waste of money). LVR is 65% so I am pretty comfortable with that.
All Ip's are actually positively geared. I always though they were negative.
Goal is to buy a PPOR fully paid off or with a loan of under $100k. Put all our extra $$ into repaying our IP's within 10 to 15 years and be able to buy more IP's. I want to be financially free by 40ish. Ideally would be to own 4 IP's fully paid off and 4 Ip's mortgaged, paid off PPOR and about $250k min in managed funds.
I envisage another 5 or so house & land packages to build and sell and I would have accomplished my short term goals.
1 IP I'm waiting on to be settled on. $366k, rental appraisal of ~$350/week.
I started saving at about 15 when I started working in my grandparents' bakery, bought TAB shares when I was 16 and got fully into the share market when I was 19-20 with about $10-13k, investing in commodity stocks looking for producers, or soon to be producers who didn't have the cash flow, or future cash flow factored into their share price/market capitalisation... made 300%+ on OPL, 80%+ on MAE which helped to more than double my savings, but I was also lazy and stopped working periodically while I partied hard, so that chewed up a fair bit of savings... also spent $5k on a comercial coffee machine + grinder, more money on cars - been through 3 in the last 12 months and have spent $18k alone on the damn things! Still got $6k left on a personal loan due to my latest car which I bought for $13.5k. Wish I hadn't spent so much on a car, but what's done now is done and I'm trying to pay it off ASAP.
Most of my deposit money came from profits I made gambling in the last 12-18 months... betting on MMA (Mixed Martial Arts), mainly on the UFC (Ultimate Fighting Championships).. it is a nice little money spinner for me to supplement my income and I tend to return at least a 20%+ ROI overall and I will churn over $100-150k in bets this year easily.
I lost $15k+ in the space of 4-6 weeks... lost $7k on the stock market after liquidating my entire portfolio over 18 months months ago and jumping on a "hot insider tip"... lost several plays gambling, including a couple of real heavy plays gambling that I considered "LOCKS", this was after going 15+ fight win streak and over $20k in profits before the end of April was up. I think I was placing too much pressure on myself to gamble more aggressively and more often while I was "hot" than what I would otherwise which forced me to make a couple of plays I normally would not make, as I tend to go with a slow and steady, grinding, approach.
It was there & then that I realised I needed to borrow other people's money and leverage to create the wealth I was after, working harder, saving harder & gambling harder & more aggressively was not going to give me the financial freedom I was after. So I pulled the trigger and decided to invest in property as I figured that going by the average historical returns of ~7-10% p.a, that would generate me as much money as a terrific year gambling would... my decision was perhaps a little rash as in a period of 2 weeks I had contacted a mortgage broker and agreed to buy a property OTP in a new estate through an investment group, but I was very impressed with this group's past timing & results, buying in Brisbane and Perth just before the boom and and their systematic and disciplined approach on the DVD of buying in a major city, etc...
I guess the main key factor which has enabled me to get into the property market is relocating to Mount Isa 10 months ago from Newcastle to start working full-time where I earn a much higher income than what I would otherwise seeing as I am unskilled and unqualified. My income at present is $85k+/year, working 2 jobs and about 60 hours/week. I never have a weekend off because of the cash I can earn working on weekends with penalty rates, so I work every Fri + Sat night doing 6 hours security at a minimum, but there are weekends where I work Fri and/or Sat day, as well as Fri + Sat night and get virtually no sleep...
I live pretty basically, don't drink or smoke... I only really spend money on rent, food, phone/internet and some cheap entertainment... share a little dump of a place with very cheap furniture and cutlery and what not, but I don't mind in the least as I see it as a way to get out of the rat race and becoming financially independent and self-sufficient.
Right now, I desperately want a second IP as I know I have the cash flow to service it and would even go and work a 3rd job, doing 80-85 hours a week if that's what it meant I had to (maybe for a 3rd one?!) - I enjoy working long hours, helps me to avoid the drama in this small town, stay out of trouble and stay focused... the bank said no go to a 100% home loan, but I have a small debt remaining on a personal loan which may change things if I pay it off. Basically, they said they would lend me up tp $250k now, but if I pay it off, they would lend me up to $350k. I will have IP #2 in several months all going well.
SourceI don't know if I qualify as a young investor, certainly my better half does
I'm 31 she's 26, we started in 2002, so at ages 27 and 22. Late bloomers in comparison to some on here. Let's just say my debaucherous youth held me up a little.
We bought our PPOR that year for 301k, and have since bought IPs in 2003 and 2005.
We have been lucky more than anything, in that we bought all property in Perth which has done really well over this time, and is continuing to do so.
We currently hold ~1.2 Million in property with borrowings ~700k, so net worth of approx 500k.
Both IPs are neg geared to the tune of about $100/week (combined).
We are about to buy into a partnership in a kitchen company so once that settles down, we'll be looking for IP #3 later this year, which we hope to be a future development site sometime down the track.
This should have us near our servicability limits, so will start to look at shares for income and possible renovations for increased yield.
We have a goal of financial independance by (my) 40 through a strategy of buy and hold IPs for growth and shares for income.
It's an evolving beast however, and we're lovin every minute of it!
SourceI don't know that I would have done anything differently, under the circumstances.
Bought first PPOR in 2002, for 300k. With 70k deposit.
Bought first IP in 2003 for 205k, IO 105% finance
Bought 2nd IP in 2005 for 360k IO 105% finance
Setup offset and LOC to capitalise interest to pay loan on PPOR down to ~50k
After relationship ordeal, sold PPOR for 670k and netted ~300k cash. Took IP 2 in settlement.
Bought new PPOR in 2009 with new partner for 440k
Bought 3rd IP in 2009 for 525k.
Currently sitting on about 2.2M of property at about 70% LVR. IPs 1 and 2 are close to neutral, IP3 heavily negative and planning to shave off the back block to reduce exposure and increase cashflow. If this strategy is successful we might try it again.
I don't know what I would or could have done differently really... while maintaining desired lifestyle anyway