Got $50K LOC.....

[eternit]

Hi There,

I have $50K LoC taken out on one of my investment property but I am not sure how to use it. I am not thinking of buying a property at the moment as I do contract work and my contract ends next month and I am going to take some time off (4-5 months).

I would prefer to maybe use it to investment in a business or shares but even the share market doesn't look that good at the moment.

Anyone got any ideas?

Thanks.

 

[Rixter]

I have $50K LoC taken out on one of my investment property but I am not sure how to use it.

Whats your investment strategy?

1/ Where and what to purchase is determined by your chosen investment strategy.

2/ Your chosen investment strategy is determined by what you are wanting to ulitimately achieve (from using property as your investment vehicle) and the time fame you want to attain in it, according to your own individual risk profile.

Do you have answers to the later?

By having answers to these questions you will take away all the uncertainty and frustration. This is the catalyst in working out your purchasing criteria for what you are looking for.

Most people (newbies & others who have been around for a while) don't know what they are looking for because they have not identified answers to the above questions beforehand. If they dont know what they are looking for how will they ever know where to look, what it looks like and know when they have found it!?

Hope this provides you some food for thought.

 

[jaycee]

Give me the money, I'll make you heaps, promise... Can't guarantee anything though, you know, investing is risky....Trust me




Following Rixter's advice is a good way to ensure you avoid pple like the above...

 

[eternit]

Whats your investment strategy?

1/ Where and what to purchase is determined by your chosen investment strategy.

2/ Your chosen investment strategy is determined by what you are wanting to ulitimately achieve (from using property as your investment vehicle) and the time fame you want to attain in it, according to your own individual risk profile.

Do you have answers to the later?

By having answers to these questions you will take away all the uncertainty and frustration. This is the catalyst in working out your purchasing criteria for what you are looking for.

Most people (newbies & others who have been around for a while) don't know what they are looking for because they have not identified answers to the above questions beforehand. If they dont know what they are looking for how will they ever know where to look, what it looks like and know when they have found it!?

Hope this provides you some food for thought.

I currently have 3 IPs, 2 in Sydney and 1 in Brisbane. I am easily making the repayments for those IPs so that is good. I dont want to buy another IP at the moment. I want to invest in something where I can get a steady income stream. Maybe shares or a business seems like the way to go.

 

[stumunro]

I currently have 3 IPs, 2 in Sydney and 1 in Brisbane. I am easily making the repayments for those IPs so that is good. I dont want to buy another IP at the moment. I want to invest in something where I can get a steady income stream. Maybe shares or a business seems like the way to go.

your 50k won't produce much of an income in a managed fund for it to be worth the risk. why not keep it locked in until it grows further and purchase a property with it?

 

[Belu]

what kind of business? what kind of contract work do you do?

 

[eternit]

i dont think right now is the best time to buy properties.

A type of business that would make me lots pf money

I do contract work in IT. I am a Programmer/Analyst.

 

[Belu]

thought of starting your own consulting firm?

 

[eternit]

thought of starting your own consulting firm?

Trying to get out of IT......

 

[voigtstr]

I currently have 3 IPs, 2 in Sydney and 1 in Brisbane. I am easily making the repayments for those IPs so that is good. I dont want to buy another IP at the moment. I want to invest in something where I can get a steady income stream. Maybe shares or a business seems like the way to go.

Navra retail fund, would be ok if you wanted an income fund.

www.navrainvest.com.au

 

[Goldigger]

eternit,

50k, you have 4-5 mths, you mentioned shares but the market doesnt look good.... Then Look into ETOs, they're not for everyone, it takes alot of commitment & dedication but you might find it's for you.

 

[firstmillion]

Hi There,

I have $50K LoC taken out on one of my investment property but I am not sure how to use it. I am not thinking of buying a property at the moment as I do contract work and my contract ends next month and I am going to take some time off (4-5 months).

I would prefer to maybe use it to investment in a business or shares but even the share market doesn't look that good at the moment.

Anyone got any ideas?

Thanks.

How are you going about your investments ?

 

[MCS_80]

I have no idea where or what to invest your 50k in.

Just remember, most others who are reading this thread have the same opinion as me, but like to voice "opinions".

Be our own expert I say.

As Rick mentioned, work out where you want to be and how many years you have to get there, and take the most direct route YOU know how to.

As I have not worked out my investment stratergy as yet, I have not purchased any investment as yet. "SIBKIS" See It Big - Keep It Simple.

Live by those words, and you will find the answer yourself before you know it.

Cheers

Mick

 

[stargazer]

Hi

eternit
I would prefer to maybe use it to investment in a business or shares but even the share market doesn't look that good at the moment.

What makes you say that eternit? Depends if you bought at the top or whether you are looking at entering.

Some of those Dividend Yields for what has been strong blue chip stocks is starting to look attractive 8-10%. Do you really think banks are going to dissappear?

It is exactly as property Buy in gloom sell in boom....

cheers
BC

 

[ILoveProperty]

Some of those Dividend Yields for what has been strong blue chip stocks is starting to look attractive 8-10%. Do you really think banks are going to dissappear?

Banks may not dissappear but their dividend yields might? How can you be sure that dividends can be maintained at pre-"crash" values?

 

[BayView]

Putting $50k into a business as a deposit won't get you much of a business.

The lending rules for them are different; most Banks will only give you around 60%, maybe 70% LVR for a business loan.

Unless you are buying a business that is turning over at least $1 mill or even more (I'd say $2 mill), you will have to be in it and running it yourself full-time pretty much. Do you want that?

 

[silversands]

Hey Bay View,

Deviating a little, but you can't really broad sweep like that. I have just sold a business that turned over a little over $500k but the profits were excellent, we could have had it fully managed and still managed to pull $40k pa. Yes, we set up the business but the new owner will not have to work in it for more than two years and then he will be in the same position. We only sold for around the $250K mark and the bank fairly threw money at him. Many have said we shouldn't have sold if it was so good, but hey when you're over something, you're over it!

Regards Jodie

 

[firstmillion]

Hey Bay View,

Deviating a little, but you can't really broad sweep like that. I have just sold a business that turned over a little over $500k but the profits were excellent, we could have had it fully managed and still managed to pull $40k pa. Yes, we set up the business but the new owner will not have to work in it for more than two years and then he will be in the same position. We only sold for around the $250K mark and the bank fairly threw money at him. Many have said we shouldn't have sold if it was so good, but hey when you're over something, you're over it!

Regards Jodie

Hi Jodie,

What was the business dealing in? How do you value a business to sell?

Cheers

 

[outbackjack]

I recently came across a business for sale 140K inc stock. Had one employee who could run the show. Net profit was 60k per annum. Vendor was willing to finance %50 for 12 months.

I just couldnt come up with the cash otherwise I wouldve jumped on it.

 

[silversands]

Hi!

Business was discount variety. Yep, you'd be surprised how much profit there is in a product that sells for $2 - $2.50. many $2.50 items cost less than 75cents wholesale. Our shop was also in a high growth area with little competition. A friend had (still does) have a deli for sale. It turns over tripple what we did, but the profit from food is dismal. and the hours are disgusting. Her business if it ever sells will sell for much less!

Pricing a business for sale is complex, investors expectations of acceptable returns differ, depending on whether they usually invest in shares(not great returns there in general at present but a couple of years ago they may have seemed more attractive in comparison to a business.) You would need to talk to a business broker to get a more informed idea of the formulae they use to determine business value accross the various sectors. For example, my business even 10k's closer to the city would have been isause they is becconsiderably more. Asians in particular who want to immigrate will pay big money for business in cbd area.

All I was trying to say to Bayview is that you can't always determine how good the profits from a business are, based on turnover alone
I'm not saying thay you can always buy such a well priced business, but it is possible.

Cheers everyone.

Jodie