buying first IP, quickest way to buy second.

Hi all!!:)

its my first post /thread so please forgive me if its a little amature compared to others.:eek:

im a 23 year old man that lives in Adelaide, SA.

im extreamly passionate about property and im FINALLY in a posistion where i have saved a decent deposit for my first investment property and am looking to buy, im looking around the southern areas such as, Morphett vale, Christies beach, Port Noarlunga and Aldinga beach as that is where i live, the reason im looking in these areas is because house prices are cheap and rental return is high, im looking for a property that pays for itself or is positivley geared, saying that i can see once i have my first id really like to get into buying another property almost immediately after the first, has anyone got any advice they can give me to reaching that goal??
 
.....FINALLY in a posistion where i have saved a decent deposit for my first investment property and am looking to buy,
Congrats!!


.... i can see once i have my first id really like to get into buying another property almost immediately after the first, has anyone got any advice they can give me to reaching that goal??
Either buy 'below market' - some kind of distressed sale etc. Then wait 12 months for comparable sales in the area to justify a new increased valuation on your IP. Then draw down some of the equity as cash for your next deposit.

Or, buy something to cosmetically renovate, to add value, for the same kind of strategy.

Save deposits or get deposits from manufactured (via reno) equity or organic capital growth.
 
Welcome to the forum. :)

I think you'll get along quite well here with that passion! Going a CF+ route, as Prop mentioned a underval property which might have unique selling circumstances (mortgagee, divorce etc) means that you can shave significant dollars off your buying price, allowing for 'insta-equity' which can be accessed later on to expand your portfolio.

If you know how to swing a hammer (or have the enthusiasm, access to youtube and a lot of trips to Bunnings) renos can boost your rental return and capital value.

As you are starting your Investment property portfolio, make sure you have your finance organise to reflect your future goals (i.e buying more properties, tax benefits). This might include adjusting your deposit amount to assist in your future serviceability, depending on your income, savings etc.

Keep us posted!
 
thanks for the advice!!:)

im looking to a bit of both actually, buy under the asking price and also do a small reno on it as well ie. floor coverings,kitchen,paint ect.

i guess im a little lucky as im a tradesperson so this wont cost me all that much because i can do most of the work myself, ive got my eye on a couple of houses so ill let you know how i go.

a couple of brokers i have talked to think my max borrowing capacity is 260,000, i have 24,000 saved i earn $700 clear a week, i have no expences and live at home, do you think that sounds about right?
 
You're limited by your savings, otherwise you're MAXCAP (most the banks will lend you) will be higher. So it's about right.

I'll PM you some specific details so you can get an idea of your serviceability calcs. :)
 
I believe you are doing the right thing investing in this region. My preference would be Port Noarlunga - but not beach front - perhaps few streets back. You just need to get in the suburb. You have not only good returns here (that's Adelaide in general) but potential for capital growth. All the infrastructure is in place (well apart from the duplication of freeway and extension of rail-line). You have McLaren Vale wineries neaby, Hospital, beach, jetty, reef - a great place to not only live but I believe a great investment.
 
First of all welcome.

Simlar age to myself, I was in similar position last year.

Purchase 1st house 6months ago.

Signed contract today on 2nd.

Looking to buy 3rd.


I think the area you are looking in is good, should do well.
Keep your eyes on the prize, your buying an investment property... be commercial with your decision, just because you live close by and know the area doesnt mean you should be looking for the nicest house to show your mates. Set goal with what you actually want from the property, stick to it and try buy well.

I've been watching the area for last 12months, there are good buys but they go quick. If you are serious I would go speak with real estate agents and let them know your serious. I missed 2 really good deals as I couldnt get down (otherside of adelaide) in time to look at them.

Not sure how your broker only got you servicing (maximum affordability) $260k? you could sevice more debt with your income from job and rent. It would be more around the deposit you have saved.


Also suggest coming along to a meeting to meet everyone next one is 31october
 
How do you identify/find distressed property?

Are they usually identifiable in some way on say realestate.com.au. Or do you just have to pick them?
 
thanks for the advice!!:)

im looking to a bit of both actually, buy under the asking price and also do a small reno on it as well ie. floor coverings,kitchen,paint ect.

i guess im a little lucky as im a tradesperson so this wont cost me all that much because i can do most of the work myself, ive got my eye on a couple of houses so ill let you know how i go.

a couple of brokers i have talked to think my max borrowing capacity is 260,000, i have 24,000 saved i earn $700 clear a week, i have no expences and live at home, do you think that sounds about right?

As an IP...you can def borrow more then $260,000- presuming you dont have any personal loans, hug credit cards or any another nasty...

Regarding buying your 2nd one stright away, just a matter of your broker finding you the right lender that supports quick equity release + right product + right loan structure ( LVR, fixed rate etc..)

Regards
Michael
 
Limiting factors for second purchase (over simplified obviously):

Serviceability - this has been covered by the fact that you are targetting CF+ properties - bear in mind that banks normally take account of 70-80% of rent as opposed to 100%.

Equity - You have saved your first deposit - to get to your second you will either need to save for the second deposit OR buy below market value OR wait for the value to go up OR manufacture growth (reno/development). This will then provide the basis for the deposit for the next prop.
 
Where clients have cash flow but not necessarily deposit we have used accessed a couple of Private lenders that do 100% top up loans for investors only.

Admitedly rate on the top up isnt cheap and is P & I but of course if it gets you to the next IP that much quicker it is worth considering given that it is usually only on the 5-10% of the purchase price.
 
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