At the crossroads - critical decision. Your thoughts?

[BLTN]

Savings of $370k and the possibility to ramp up the income to over $100k and without getting outside the comfort zone.....

$120k is not chicken feed for 90% of the population.

Stay where you are.

You can use a decent chunk of the $120k to invest and make an absolute fortune in 10 or 15 years.

You can always get a girlfriend (well; you can with Mr. Visa); but not $120k per year cushy jobs.

But you can't put an old head on young shoulders, so go for it; you're only here once.

That is pretty much my rationale as well.

At the very least though, I've applied for the job, so will see what comes of it. Even if I were to get an offer, it doesn't mean I'd necessarily accept it.

Self esteem, brother.

You really, really don't care what others think.

Period.

I'm not quite sure I get your point - are you saying that this will be good for my self esteem, or if I had good self esteem, I wouldn't do it?

I try not to care what people think, but it is easier said than done. I think doing this will help me not give a ****.

 

[INVSTOR]

There is definitely a stigma associated with it - but at the end of the day, people are always going to judge you for one thing or another. I already do bodybuilding and modelling - people tend not to take you seriously when you do those either. I'm obviously not going to advertise the fact that I'm thinking of doing this (other than to my closest friends), but I guess it is inevitable that people would find out should I pursue it.

It's also worth mentioning that there are different kinds of strips. Some are really sleazy and are definitely not the kind of thing I would be doing.

Some are just a bit of fun and are playful. That would be what I would be going for. Definitely not the seductive sleazy ones.

Fair enough! At the end of the day, as long as you are happy doing what you are doing. I know some of my friends didn't think much of me choosing to be a 'dumb' secretary or 'stay at home mum'. I didn't envy them either reading articles on a Saturday night while in the bath or still paying off HEC'S well after I paid off my first mortgage. I think they're a bit envious of me now though.

 

[BayView]

I'm not quite sure I get your point - are you saying that this will be good for my self esteem, or if I had good self esteem, I wouldn't do it?

I try not to care what people think, but it is easier said than done. I think doing this will help me not give a ****.

Sorry; I'm a bit subliminal at times.

I meant to say you should build your self esteem, or have some, get some.

Never let what others think of you influence what you do (unless it's illegal, etc).

Stripping is a perfectly acceptable job these days for males and females.

I'd be one, but the wife might object to having to share me with thousands of adoring, screaming females wanting my body (or would it be just my mind?).

I would have thought you needed to have enormous confidence already to be a stripper - not do it to get confidence.

My background was a golf professional, and one of the more common statements I heard from students was; "When I start playing better I'll get more confidence"....

It's actually the other way around - act confident, think confident and the confidence will come, and the play will improve.

Sorta along the lines of "Think and Grow Rich" - you become what you think of most.

 

[investor2009]

Well, no. It doesn't matter how much you buy them for, if the rents exceed the expenses then I don't understand your reasoning?

There are TONS of places out there right now! And if you can't find them now, you may never..? With these rates. $80k deposit on each, $1.5m property holdings. Bam

The only properties I can think of at that price would be units though right?

I might be able to find some CF+ places with land, but would be 1-2 tops with the amount of capital I have and the level of borrowing the bank will lend me.

 

[BLTN]

Sorry; I'm a bit subliminal at times.

I meant to say you should build your self esteem, or have some, get some.

Never let what others think of you influence what you do (unless it's illegal, etc).

Stripping is a perfectly acceptable job these days for males and females.

I'd be one, but the wife might object to having to share me with thousands of adoring, screaming females wanting my body (or would it be just my mind?).

I would have thought you needed to have enormous confidence already to be a stripper - not do it to get confidence.

My background was a golf professional, and one of the more common statements I heard from students was; "When I start playing better I'll get more confidence"....

It's actually the other way around - act confident, think confident and the confidence will come, and the play will improve.

Sorta along the lines of "Think and Grow Rich" - you become what you think of most.

Thanks for clarifying.

I have good body confidence and confidence in general, but not stage confidence or just in general confidence around strangers (think approaching random girls). This is where I think it might help.

All that said, I am a LOT more confident then I used to be - basically like you said, by acting confident and eventually becoming that way. It is the same with this - I think it will make me more confident and I'll have to ACT confident on stage and that should eventually translate to more confidence around strangers etc.

Well, no. It doesn't matter how much you buy them for, if the rents exceed the expenses then I don't understand your reasoning?

There are TONS of places out there right now! And if you can't find them now, you may never..? With these rates. $80k deposit on each, $1.5m property holdings. Bam

I have $370K, but the most I could borrow is $600K. Take out transaction costs etc and you'd probably be looking at $800K max.

Is buying a property purely because it is currently CF+ a good strategy? Don't you want to aim for some CG? CF+ now at low interest rates doesn't mean it'll be CF+ in 2-3 years time.

My reasoning is that if you want CGs, your best bet is on land (not units). But to get a CF+ house is harder to find, unless you go further out (which seems to be inherently more risky with regards to future CG).

If I buy a house that isn't really far out, I'd be looking at say $400-500K. Which limits me to buying about 2 places.

If I were to look solely at CF+ units, then yes, I could probably get about 4, but is that the best option in my position? And would that be limiting my future potential CGs?

Or is it a good option to simply look for maximising my CF in the near future to fund future investments?

So many decisions...

 

[investor2009]

Why is your lending power so low?
And no, I am talking CG properties. These will equal both CF and CG if you buy right, which as I stated earlier isn't difficult to achieve right now. Interest only, offset account

 

[BLTN]

Why is your lending power so low?
And no, I am talking CG properties. These will equal both CF and CG if you buy right, which as I stated earlier isn't difficult to achieve right now. Interest only, offset account

I'm only on about $95K package at the moment - that isn't exactly a huge income to make repayments. Plus I've never had a loan before so my credit history probably isn't the best.

Well back to my earlier question, would it be fair to say that CG opportunities are limited when it comes to units?

It is easy to find CF+ units, but not so easy to find CF+ properties.

Clearly finding CF+ properties with good CG prospects is the way to go, but surely that is easier said than done.

 

[HiEquity]

Sounds like a PPOR debt limit - it should increase substantially if you actually buy CF+ properties that generate some decent net income by themselves. The properties should support the debt - not your salary!

In my opinion, the idea that low yielding properties have better CGs is one of the biggest confidence tricks in property investing today. Don't believe it! It will rob you of exposure today and add decades to your progress.

Yes it is easier said than done but finding CF+ properties with good CGs is exactly the type of game you need to play if you actually want to meet your goals. Getting yourself familiar with these properties takes time - if you have some spare time / attention now I would use it in this direction rather than get distracted by other things. Done properly this will give you far more than any job ever could. As you conquer your fears, close some deals and start to make some money, your confidence will improve out of sight.

Just my opinion...

 

[investor2009]

As HiEquity said, is this PPOR debt that's stopping you? We really need to know your living circumstance and what you'd like to do with it into the future if you want an accurate answer.

Put it this way: I was on about $45k a year when I hit 4 properties, so your reasoning makes little sense and if that's what your bank or broker is telling you, I think you should talk to another. I (fortunately) know a very good one if you'd like to speak with him. He's been one of the most valuable assets I have. Oh, and 'only' & 'probably' aren't the most positive words. You make very good money! I still make quite a bit less than that and have hit $2.5M in assets. Nothing extraordinary but it is what it is and it's the lack of positive cash-flow that's kept me back for a while. You underestimate your position greatly here my friend.
Put it this way, I had a $40,000 deposit and that was the last one I ever needed,

Kerry Packer once had a taxable income of $25,000.. That's saying something

I disagree with your unit cash-flow thing. You'll find that the strata fees quickly turn these cash-flow beasts into a drain. I have a few, and the growth has been ok, but they're still negative even today because body corporate costs $3,500 a year. And climbing.

When you say easier said than done, lets look at the numbers

Normal house for sale at $450,000
Renting for $500p/w which equals $26,000p/a
Interest only loan of $400,000 fixed at 5% = $20,000p/a
Insurance $1,000
Rates $1,500
Repairs $1,000
Water & sewerage $800
Property manager @ 6% of rental income $1,600

Total outgoing $25,900. Total incoming $26,000. A couple hundred dollars positive before tax

After tax +$3,000 and rents climb into the future. Lets say we average 5% growth to be conservative, add a further +$22,500 tax free for the first year, compounding into the future. Times this by (insert number here?) and try 7-10% growth in a year, you do the math

Can you see a little more clearly now? This is just a normal everyday house today at a 5% interest rate. Can you say "opportunity"?

I'm only on about $95K package at the moment - that isn't exactly a huge income to make repayments. Plus I've never had a loan before so my credit history probably isn't the best.

Well back to my earlier question, would it be fair to say that CG opportunities are limited when it comes to units?

It is easy to find CF+ units, but not so easy to find CF+ properties.

Clearly finding CF+ properties with good CG prospects is the way to go, but surely that is easier said than done.

 

[Dazz]

Critical decision....turn it up....this is a joke right ??

 

[cu@thetop]

Not a helpful contribution but this will hopefully throw some light on your option:

http://www.youtube.com/watch?v=CYgxxVXUhUg

 

[BLTN]

Sounds like a PPOR debt limit - it should increase substantially if you actually buy CF+ properties that generate some decent net income by themselves. The properties should support the debt - not your salary!

In my opinion, the idea that low yielding properties have better CGs is one of the biggest confidence tricks in property investing today. Don't believe it! It will rob you of exposure today and add decades to your progress.

Yes it is easier said than done but finding CF+ properties with good CGs is exactly the type of game you need to play if you actually want to meet your goals. Getting yourself familiar with these properties takes time - if you have some spare time / attention now I would use it in this direction rather than get distracted by other things. Done properly this will give you far more than any job ever could. As you conquer your fears, close some deals and start to make some money, your confidence will improve out of sight.

Just my opinion...

Thanks mate, that is good advice.

Regarding your point in bold above, do you have any suggestions on what I should be researching or reading?

I definitely do want to commit as much free time to this as possible - but I'm not sure exactly what I should be doing with my time.

As HiEquity said, is this PPOR debt that's stopping you? We really need to know your living circumstance and what you'd like to do with it into the future if you want an accurate answer.

Put it this way: I was on about $45k a year when I hit 4 properties, so your reasoning makes little sense and if that's what your bank or broker is telling you, I think you should talk to another. I (fortunately) know a very good one if you'd like to speak with him. He's been one of the most valuable assets I have. Oh, and 'only' & 'probably' aren't the most positive words. You make very good money! I still make quite a bit less than that and have hit $2.5M in assets. Nothing extraordinary but it is what it is and it's the lack of positive cash-flow that's kept me back for a while. You underestimate your position greatly here my friend.
Put it this way, I had a $40,000 deposit and that was the last one I ever needed,

Kerry Packer once had a taxable income of $25,000.. That's saying something

I disagree with your unit cash-flow thing. You'll find that the strata fees quickly turn these cash-flow beasts into a drain. I have a few, and the growth has been ok, but they're still negative even today because body corporate costs $3,500 a year. And climbing.

When you say easier said than done, lets look at the numbers

Normal house for sale at $450,000
Renting for $500p/w which equals $26,000p/a
Interest only loan of $400,000 fixed at 5% = $20,000p/a
Insurance $1,000
Rates $1,500
Repairs $1,000
Water & sewerage $800
Property manager @ 6% of rental income $1,600

Total outgoing $25,900. Total incoming $26,000. A couple hundred dollars positive before tax

After tax +$3,000 and rents climb into the future. Lets say we average 5% growth to be conservative, add a further +$22,500 tax free for the first year, compounding into the future. Times this by (insert number here?) and try 7-10% growth in a year, you do the math

Can you see a little more clearly now? This is just a normal everyday house today at a 5% interest rate. Can you say "opportunity"?

Yes I can, thanks for clarifying.

I think this could be a sound strategy and something I will look into.

Quick question though - where is the $22,500 tax free number coming from? And why is it only in the first year?

You haven't include sales costs in the calcs - but I guess I would include them in the overall house cost (or is that what you've done?)

Critical decision....turn it up....this is a joke right ??

Read the OP.

The critical decision was not whether or not to strip.

Incidentally, I don't think I'm going to do it. I think the time would be better spent researching investing.

Topless waiting maybe, but the money isn't really enough to justify the lost time.

Not a helpful contribution but this will hopefully throw some light on your option:

http://www.youtube.com/watch?v=CYgxxVXUhUg

Thanks mate, I'll check it out.

 

[Blair007]

If you earn 1000 for a short weekends work stripping, why not quit your monday to friday job and just strip all week around - income potential of 150000k + pa. Then focus on wealth creation during the day. 370k is a pretty impressive nest egg to have at 27 years old, should make things a lot easier to get the ball rolling with that sort of savings behind you.

 

[BLTN]

If you earn 1000 for a short weekends work stripping, why not quit your monday to friday job and just strip all week around - income potential of 150000k + pa. Then focus on wealth creation during the day. 370k is a pretty impressive nest egg to have at 27 years old, should make things a lot easier to get the ball rolling with that sort of savings behind you.

I'm not earning that - I'm not doing it yet.

That's just what some guys in the business said was possible.

It's the sort of job where you would be underemployed - you couldn't earn that much even if you wanted to.

And as mentioned in my post above, I don't think I'm going to do it now anyway. I've had a bit of a taste of the industry, and I don't think I like it.

 

[HiEquity]

Thanks mate, that is good advice.

Regarding your point in bold above, do you have any suggestions on what I should be researching or reading?

I definitely do want to commit as much free time to this as possible - but I'm not sure exactly what I should be doing with my time.

Start with the archives of this forum. With your head start I would focus on the commercial industrial sections first but that's a minority view around here. Just learning about the office markets in different cities and regions takes time. Agents publish reports and you need to compare yield with lease duration, tenant quality, rent reviews, tenant quality etc etc etc.

Find out which market or segment of the wide world of property you like, talk to people, ask questions, check past sales, do your DD and take action - without action you will have learnt nothing useful about yourself, which is the most important determinant of success.

Good luck!

 

[investor2009]

I think you should do a little (or, a LOT) of reading OP. You need to have a good understanding of where that $22,500 came from and why it is tax free in the first place, otherwise you might buy IP for the wrong reasons? It's capital, not cash, although it can be converted to liquid cash tax free, but theres a charge for doing so, the current interest rate.

 

[BLTN]

I think you should do a little (or, a LOT) of reading OP. You need to have a good understanding of where that $22,500 came from and why it is tax free in the first place, otherwise you might buy IP for the wrong reasons? It's capital, not cash, although it can be converted to liquid cash tax free, but theres a charge for doing so, the current interest rate.

I intend to do so, but I'm not sure what I should be reading - do you have any suggestions? Either crucial books or threads on here?

I am mindful also that I don't want to spend all my time reading and not doing, but obviously I want to be informed before purchasing anything as well.

I definitely want to have at least 2 properties by the end of this year however.

 

[investor2009]

Good work my friend

I recommend the following:
"How to achieve wealth for life" by Ed Chan
All the Jan Somers books
All the Robert Kiyosaki books
Maybe even a Michael Yardney book and positive cashflow author to offset each other. But the best book has to be the Building wealth for life books by Jan Somers. Both the red and the blue ones. Red is 101 stories and the other is the actual book. I even have some oddball ones which are just interviews by pro real estate investors which are all really good. We have many at home

Also, pick up a copy of Australian Property Investor and Your Investment Property magazine's too

 

[thatbum]

Along with the reading, I would recommend going to house opens as much as you can.

During my "research" phase, I think I averaged more than 10 home opens each weekend for a 6 month period. Combined with asking different agents questions and looking at certificates of title and strata documents, it was a pretty nice bit of hands-on education.

 

[BLTN]

Good work my friend

I recommend the following:
"How to achieve wealth for life" by Ed Chan
All the Jan Somers books
All the Robert Kiyosaki books
Maybe even a Michael Yardney book and positive cashflow author to offset each other. But the best book has to be the Building wealth for life books by Jan Somers. Both the red and the blue ones. Red is 101 stories and the other is the actual book. I even have some oddball ones which are just interviews by pro real estate investors which are all really good. We have many at home

Also, pick up a copy of Australian Property Investor and Your Investment Property magazine's too

Thanks for that - I'll do some research on them tonight.

My plan is basically to commit at least an hour or two each night to reading (and a bit of time during the day where possible). I also want to spend a good portion of the weekend researching as well.

Along with the reading, I would recommend going to house opens as much as you can.

During my "research" phase, I think I averaged more than 10 home opens each weekend for a 6 month period. Combined with asking different agents questions and looking at certificates of title and strata documents, it was a pretty nice bit of hands-on education.

Sounds like a good idea.

What is the value of looking athe certificates of title and strata documents though?