Geting Started

[WebBoard]

From: Mike .


First time investor
From: Tricia Abela
Date: 6/13/00
Time: 7:32:16 PM

Hi Everyone, This is the first time I've posted on this site. I'm only new to all this PI stuff. I'm from Brisbane and am looking to invest.

My husband and I are a little nervous. We are renting at the moment at $125/w and are paying a car that we just bought at 150/w.at 26%. I am looking at a 4 bedroom house in Gailes (ex housing commission). at $60,000. Every house in the street is privately owned and it's in the okay area of Gailes. Shops 3 mins up the road walk. The Ipswich Motorway 2 mins drive away, the Logan Motorway to the Gold Coast is 3 Mins drive away and the Centenary/Western Freeway is 5 Mins drive away. Gailes don't have such a good name but is reasonable. The house has great potential with a good size yard and 2 sheds out the back. Need a good paint job but is no problem as my husband and I are painters and can get paint on trade prices with other materials. Driveway is shit need definite doing and carpets need redoing. Big dirty tree in the front yard, but can be pruned. (Maybe have to check roots etc.) But apart from that I think it's okay. Rent in this area is for $140-150/w.

My thinking is I'm already paying $275/w on rent and car payments. Get a house loan for 60,000 and a personal loan for 20,000, pay the car out. Because it;s our first home, use the first homebuyers grant $7,000 with a 5,000 deposit, which will bring the loan down to 48,000, live in the house for 1 year while fixing it up(which will qualify me for homebuyers grant.) and then rent it out and do the same on the next house.

With my repayments of the $275/w (rent and car) on the new loans with 8-10% int rate I will own not just the car in 5 years but a house too.

Well that's my reasoning. What do you think? Does any one know the Gailes area? I know it's not the best suburb but even if it falls through as a rental and I have to live in it my repayments are only $100/w instead of $275/w and if I keep the repayments of $275/w up I will not just own the car, but a house too for free. BETTER THAN THE SITUATION I'M IN NOW.

What do you think?

Regards, Tricia

 

[WebBoard]

Les

Reply: 1
From: Mike .


Re: First time investor
From: Les
Date: 6/17/00
Time: 4:04:43 PM

G'day Tricia,

A friend of mine (MANY years ago) said to me when I was thinking of buying my first house "Get on the train - you can always change carriages!!" I thanked him for that, as we then bought our first home (pretty ordinary, in average suburb) and within a year it had climbed 50% in value. Where would we have been if we HADN'T "got on board the train?"

I'm from Brisbane, so know of Gailes, but don't KNOW Gailes. But the older Housing Commission properties were usually large, solid, on big blocks - so I don't see much downside, especially as you can add value with your painting, etc. What is the median price in Gailes? What prices are other houses selling for in that area?

In a nutshell, give it a go!! Try for a lower price, too - you never know - and then work like beavers to get the home nice for next year. And I hope you've had a good look through this forum - there are a bunch of top ideas from many good people re houses as investments.

Let us know how you go - and come back with more questions if you wish. Good luck

Regards, Les

 

[WebBoard]

Gee Cee

Reply: 1.1
From: Mike .


Re: First time investor
From: Gee Cee
Date: 6/17/00
Time: 4:53:03 PM

Dear Tricia I agree with the posting that Les made has in regards to getting "0nto the train."

Just make sure that the train is not overpriced for the trip at the start.

Check out what the prices being paid recently are for similar houses in the area. As well walk into a agent and tell them you want to rent a home in the area. You will see if there are already to many rental houses available and therefore a oversupply.

By doing this in any location you will within a few days get a feel for the area. As well walk the area over and don't be afraid to drum up a conversation with locals.(Nasal Appraisal per A.J. Falkson's book)

I was many years ago going to buy a block of flats along the Brisbane river. The agent commented that the flood waters a few years back had only come to the edge of the yard area. However after going back and having a walk around and a talk to the locals I soon found out the total building had been covered by flood waters.

As well do not get emotional. There will always another bargain of a lifetime coming available next week.

Happy house hunting

Gee Cee

P.S. Keep us all posted.