Getting Started

W

WebBoard

Guest
From: Mike .


What's the best way to start???
From: Batmann
Date: 29 Oct 2000
Time: 08:46:28

I am currently renting and would like to buy my first investment property. What is the best type of loan to get for the first property whilst still renting? Principal & interest or interest only????

Then after I have my first property how much do I need to pay off, or how long do I have to wait before I can buy the next one? Any and all advice would be much appreciated.
 
Last edited by a moderator:
W

WebBoard

Guest
Jeremy

Reply: 1
From: Mike .


Re: What's the best way to start???
From: Jeremy
Date: 30 Oct 2000
Time: 02:26:05

Well this is the advice I give everyone, though very few take it. Find in an area near you the best returning property you can. By this I mean rent * 52 /purchase price. Cheapish (no need to be over 100-120k even in Sydney). Preferably in an area that hasn't quite gone up in value yet (Balcktown/ Penrith/ Mt Druitt in Syd)

Stay renting. Use 10% (or more deposit) down. Pay this off diligently and get 50% equity ASAP. Once you have this much equity buy another. You then have half the first IP's rent paying the extra needed to the 2nd IP. Etc etc etc. Interest only EVER.

I used a similar (though not as good) formula and reached $1m net inside 6 years. This stuff is not rocket science go to it. Do not let people laugh at you for buying in slightly dodgy areas.
 
Last edited by a moderator:
W

WebBoard

Guest
Craig

Reply: 1.1
From: Mike .


Re: What's the best way to start???
From: Craig
Date: 31 Oct 2000
Time: 20:01:17

So say for example i bought around Blacktown for around $140,000 renting at $185 a week, and i use the rent + salary to pay off P & I loan, once i have reduced the loan balance to approx $70,000, what's the next step?

Refinance that loan to interest only or leave that one as is and take out another interest only to purchase another property?

Sorry if i am asking too many questions, but after reading Jan's book i have a thirst for knowledge that could assist me with my particular situation.

To think that up until a month ago i was planning to buy to live in, just like the rest of the flock.

My email address is batmann@mobsters.com

Thanks
 
Last edited by a moderator:
W

WebBoard

Guest
Dave

Reply: 1.1.1
From: Mike .


Re: What's the best way to start???
From: Dave
Date: 30 Oct 2000
Time: 14:46:07

I agree totally with this.I have bought in the Mt Druitt and I have found the returns great. I bought for $80k in late 97.This is now worth at least $105-110k.Also it is positive cashflow as rent(which is below market rates) is greater than the repayments on a P & I loan.
 
Last edited by a moderator:
W

WebBoard

Guest
NigelW

Reply: 1.1.1.1
From: Mike .


Re: What's the best way to start???
From: NigelW
Date: 31 Oct 2000
Time: 09:54:43

Sounds like you bought well Dave.

Although my thought would be: why not switch to Interest only and use the boosted cashflow to buy more IPs?

Just my 2.2 cents worth. N.
 
Last edited by a moderator:
W

WebBoard

Guest
dave

Reply: 1.1.1.1.1
From: Mike .


Re: What's the best way to start???
From: dave
Date: 31 Oct 2000
Time: 10:43:47

Yeah, I understand IO would is an option but as I see it, because I have positive cashflow, I want to be able to increase my equity more quickly. My next purchase (which I am investigating, at the moment)will defiantly be IO.
 
Last edited by a moderator:
Top