Couple of questions

Hi all,

While I read a fair bit on IP, I still have two questions I want to ask :)

1. When you draw equity from PPOR to buy IP #1 can you come back to PPOR to draw more equity once it rises again to purchase more IPs or do you move onto to the next IP and wait for that equity to rise?

2. With about 4-5 IPs, is it realistic to start chasing exotic cars like Porsche or Ferrari using equity from IPs?

Thanks
 
1/ You can indeed draw down multiple equity loans from a PPOR.
It just depends how you want to set up your accounts.
These loans can be totally seperate.

2/ I believe the answer to this question lies within the eye of the beholder.

I personally think that yes, no worries as long as you have sufficient equity and rental income.
It just depends what you want long term and where you are financially.

Hope this has answered your questions.
Cheers! :)
 
1/ You can indeed draw down multiple equity loans from a PPOR.
It just depends how you want to set up your accounts.
These loans can be totally seperate.

2/ I believe the answer to this question lies within the eye of the beholder.

I personally think that yes, no worries as long as you have sufficient equity and rental income.
It just depends what you want long term and where you are financially.

Hope this has answered your questions.
Cheers! :)


Cheers mate.

:)

Im 29 now... but would really like to be able to afford something exotic by the time I am in my early 40s... that would be great.
 
No worries mate. You've got a long time to go in that case. As long as you keep at it then I certainly don't see your goal as difficult to achieve, plenty of time ahead by even the most conservative minds here.
 
Hi all,

2. With about 4-5 IPs, is it realistic to start chasing exotic cars like Porsche or Ferrari using equity from IPs?

Thanks

You can try and chase down Porsche' or Ferraris with one IP, but unfortunately, they will always be faster than you can run.:)

Post Note. I have a fair bit more than 4 / 5 and you wont see me in line to buy one of these supercars. (maybe I might stand in the 2010 Range Rover Sports line.. LOL), but in saying this, it would depend on the market value of these 4 or 5 IP's and the income they produce.......together with maybe a handful of other requirements.

Also, why is there a time limit.......i.e 40 years old? Is this the time a mid life crisis is scheduled? Just make sure it is not a soft top!! LOL

Cheers,

F
 
2. With about 4-5 IPs, is it realistic to start chasing exotic cars like Porsche or Ferrari using equity from IPs?

I'm one of those who wouldn't be comfortable using the equity.

However, if you had 4-5 IP's paid off (yes, yes, I hear people screaming :eek:), it would generate 4 (or 5 ) times whatever rent you are getting. If that is enough for you to feed, cloth and shelter you, then theoretically whatever extra you earn (from work etc) can be thrown towards leasing your dream car.

Are you looking at new or second hand?
Which models did you have in mind? (Don't dream about - start doing some costing!)


Cheers,

The Y-man
 
Make that 6+ IP's. You can't have a Porsche and not have it parked in a nice garage in a decent suburb.

And it sure doesn't look right if it's in the drive of a sharehouse or carpark of a cheap unit.

Not having the other 'must haves' that go with the Porsche is like sporting a Louis V. handbag and wearing Target sunnies and shoes from Betts and Betts :D;).
 
Make that 6+ IP's. You can't have a Porsche and not have it parked in a nice garage in a decent suburb.

And it sure doesn't look right if it's in the drive of a sharehouse or carpark of a cheap unit.

Not having the other 'must haves' that go with the Porsche is like sporting a Louis V. handbag and wearing Target sunnies and shoes from Betts and Betts :D;).

It's still got a Porsche badge :)

http://www.carsales.com.au/all-cars...llcarhome&__Nne=15&trecs=4&__sid=1224F0AB4CBD

Cheers,

The Y-man
 
In the current enviro if you need anyting remotely resembling lo doc, and want decent rates and lvr, the best you may be able to get is a nice used Daewoo.

ta
rolf
 
its definitely not a ferrari but there's no reason after you get 5-6 properties you can't use some rent to pay a car loan, and capitalise the mortgage payments it would have been paying.

I did it with a subaru liberty, and it meant I didn't have to fork out a bunch of equity at once.

Mind you the extra 6-8% interest on a car loan is painful :(
 
I'm tempted to buy it for a giggle!

Actually, while the 924 is very much seen as a rebadged Audi, the 944 is very much more respected:
http://www.carsales.com.au/all-cars...5&seot=1&__Nne=15&trecs=38&__sid=1224F0AB4CBD

"Conventional" front engine layout means they are much more forgiving to drive in the wet around corners.


The 928 is also front engine (but rear gearbox to distribute weight) and was very much the Porsche Supercar of its time. I still think it has one of the most beautiful rear end to come out of a Porsche factory :D

http://www.carsales.com.au/all-cars...5&seot=1&__Nne=15&trecs=26&__sid=1224F0AB4CBD


As for Ferraris, $40k will get you into the seat of a Mondial....
http://www.carsales.com.au/all-cars...lcarhome&__Nne=15&trecs=17&__sid=1224F0AB4CBD

The point is - why not try out an old one to see what it's like to "drive the badge".

That's what I did with my first E30 Bimmer - bought one under $20k with 180,000km on the clock, because I always wnated to know what it would be like to be in something other than a Ford, Holden or Toyota :).
The funny thing was, when I drove the E36 and the E46 (both brand new at the time), they didn't really feel "magic" any more - in fact it was more a case of "oh, they improved that" or "oh heck, they STILL haven't fixed that!!"

Cheers,

The Y-man
 
.....2. With about 4-5 IPs, is it realistic to start chasing exotic cars like Porsche or Ferrari using equity from IPs?....

If you become a serious investor with the mindset that goes along with it, and by having 4-5 IP's, that would in my eyes put you on the path to being one, your views about expensive cars and toys will change. You may still want one but you will always turn around and say, gees, this $100k car, that is going to be worth say $50k in five years. what is this costing me in foregone serviceability? What else could I do with $100k, I could leverage into another IP, a business, shares etc

When you have your first IP, you will already start planning your 2nd and then the 3rd. Your expectations and wants will change. What you think is important now, won't be in a few years.
 
If I had say $2.5 MM in net equity, I'd be open to taking out say 150k (about 5% of your net equity) to pay for something like this:

http://www.carsales.com.au/all-cars...0&seot=1&__No=45&__Nne=15&trecs=103&silo=1011

If the car is for ''business use'' then that would be ideal, and I would pay interest only, claim depreciation, GST, and never pay the loan back... kind of write off the equity as a cost of a lifestyle purchase.

It could be CF +ve for the first couple of years done this way.

If it's not for business use then it would be more expensive to hold (as it's non-deductible debt), and you should consider repaying the loan.

A ''debt recycling'' strategy that capitalises deductible expenses and interest costs and channels spare cash flow to reducing such non-deductible debt may be beneficial here.

Alternatively, you could pay cash for it, or lease it using surplus +ve cash flow from your passive investments.

Or, you could do what I initially said, and, pay the interest costs using surplus +ve cash flow from your investments.

Personally, I'm not that interested in cars, but it seems to pull the ladies, so I'm re-considering. :)

Thing big, and be smart about it, and it may not be that silly or impossible a purchase.
 
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Thanks guys, some great replies :)

I am 29 atm, already paying mortgage on my PPOR, have an index fund that I top up monthly for the long run retirement, have a side business that brings in some extra money and work also mon-fri in a day job.

My plan is to buy 4-5 IPs before I turn 40... after if everything goes according to plan, Ill look into the exotic cars and etc.
 
If you become a serious investor with the mindset that goes along with it, and by having 4-5 IP's, that would in my eyes put you on the path to being one, your views about expensive cars and toys will change. You may still want one but you will always turn around and say, gees, this $100k car, that is going to be worth say $50k in five years. what is this costing me in foregone serviceability? What else could I do with $100k, I could leverage into another IP, a business, shares etc

When you have your first IP, you will already start planning your 2nd and then the 3rd. Your expectations and wants will change. What you think is important now, won't be in a few years.

I agree.

No to mention it is very hard to fit two children, a babyseat and a wife into a Porsche.;)

Regards JO
 
Thanks guys, some great replies :)

I am 29 atm, already paying mortgage on my PPOR, have an index fund that I top up monthly for the long run retirement, have a side business that brings in some extra money and work also mon-fri in a day job.

My plan is to buy 4-5 IPs before I turn 40... after if everything goes according to plan, Ill look into the exotic cars and etc.

Good for you. There is nothing wrong with having a plan. That is what it's all about. :)

Regards JO
 
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