Getting Started - Building Capital

[TheBacon]

Building Capital

So, I want to invest in real estate but have no money. I need to get a deposit together first (even using wraps I need SOME money right?)

So what are the best ways to get this cash together? What investment opportunities are there for someone with just a few thousand dollars available?

Thanks in Advance





Bringing it Home

The Bacon

 

[Nicholas H]

there is always getting a job and saving up the old fashion way.

 

[cornflower]

My first proerty was a 1 bedroom shack in Cessnock that cost me $51k and was rented out for $100 a week. I only had to save up about $8000 before buying it.

It has proved a good move for me because the extra income helped me buy my next one. It also gained in equity as I did some work on it and got it revalued.

Don't be afraid to start small. But yes, yoo doo need some money to start with, and that can be the difficult bit

 

[Mike]

Hi Bacon,

What investment opportunities are there for someone with just a few thousand dollars available?

You can buy a Wrap property from a Wrapper with a low deposit. Property is a good hedge against inflation so the sooner you put your capital in property the better.

Depending on which State you buy in you can get the First Home Owners Grant immediately.

Regards, Mike

 

[JoannaK]

become a "finder" and get a fee for it.

 

[Steve Navra]

Property = best returns with leverage.

Shares = best % returns.

As an initial step, start to value add through building up a share portfolio - this way you receive income (dividends) and capital growth and at least your dollar is working twice for you.

Sooner than you think, you will accrue enough for a deposit on an investment property and then you get the benefit of leverage as well. (AND your dollar will be working 4 fold!)

Beyond that with the correct structure you can get your dollar to work 6X and you will be well on your way.

Good luck,

Steve

 

[frian03]

An Alternative

If you don't have a job or money, perhaps you are time-rich. If this is the case, work with a time-poor investor to structure a renovation.

Either you can get your hands dirty yourself, or act as a project manager for a slice of the sale (assuming this is an in-and-out proposition and not a buy-and-hold).

If you agree to take a % of the net return, then it is in your very best interests to keep costs down and maximise return for the provider of the venture capital.

The only downside is that it puts a lot of onus on you, and possibly exposes you to some level of risk. I would be seeking a time-bound arangement, and expecting a project manager to indemnify me in the event of a negative net return.

Personally, I fall in the time-poor category and would look seriously at such a proposal in WA.

Regards
Anthony

 

[Nicholas H]

I was between jobs and was planning to look at doing something like that .. where i go with a friend, I do the work on the renovation, they buy the place and split how much the place had gone up. Granted I am sure it would work, but I guess I thought the risks were to much at the end of the day for me to do it. I would be risking someone else money based off an idea and no experience. Had I done a couple before then no problem, what about if you disagree with your business partner about how somethings should be done .. or how much money to spend on certain things. At the end of the day I figured it would be great if everything stayed good .. if anything goes wrong then it could destroy a long standing friendship.

The other thing which got me was how long of it takes .. I mean I might not get a cent for a couple of months or even longer, if I had to do this for a living then you would have to have a decent amount saved up to live off.

 

[landlubber]

Howdy Bacon,
You need an income (for most of us that means a job) first to start this game.

Then, since we all need somehwere to live ...if you've never owned a property, then you could take advantange of the first home buyers grant , but you have to live in the property. That will help with the deposit . If your income is "half regular" banks will lend up to (say) 95% of purchase for your home.

You could consider buying a largish rundown house in the "best suburb you can afford" for the best price you can.
Rent rooms to boarders to help cashflow.

Renovate the property and sell it or have it revalued. If you sell, it's your family home (PPOR) and the profits will be tax free .

Use the profits to do it again.

Peter H.

 

[JohnK]

If you have a job, why not apply for a personal loan? you will still need a 2-3% at least genuine savings. You might have to face pathetic interest rates but at least you're in the game.

Once you have built some equity on the property, draw it down and pay off the personal loan.

Thats my 2 cents worth.

Cheers
P