Help/ideas on expanding my portfolio

[MohanWei]

Hello,

Its my post eventhogh I have been reading forum on a regular basis from past few months.

My first home (PPOR) is worth at least $350K with $220 loan pending and IP is worth $245K with $260K loan pending. I have income of around $90K per year (one pending kid and wife on casual work). I am planning to go for second investment property with $220-250K investment in mind.

Both PPOR and my first investment properties are located in Melton. IP in Melton is rented at $220 per week and current tenant is interested in renewing their tenancy agreement for another year in April 2011.
PPOR was built last year and my first IP was purchased 3 months back. I have been living in this country for over 6 years so I do have any relatives or anyone to guide/support me or anything like that.
I am planning to buy my second IP in may be hoppers crossing/Werribee or even Melton? Or is it better to look for other areas. If yes, any ideas/suggestions?

I really appreciate any ideas as how to go about getting my finances (and serviceability is one crucial one for me). Also I do have any savings at all for deposits etc and ways of avoiding mortgage insurance etc

Any ideas or suggestions is most welcome.

Regards
MohWei

 

[Tom-B]

You may find finance tough as you are already pretty close to 80%. Also, your IP in Melton has negative equity and a fairly low yield. Perhaps any spare cash you had available would be better spent on increasing equity / yield on your current property?

 

[bene313]

Best to see a mortgage broker.

 

[mary&mat]

Hi MohWei,

I think you've done pretty well for only being here 6yrs! Congrats on your achievements so far

Perhaps you could diversify a bit for your next IP? If the market dives in Melton & all your IP's are there, it may not be the best outcome. If you have a property in another state or even in the east, south or country areas of Vic, you won't 'have all your eggs in one basket'. So if one area is underperforming, you'll have others that may be going ok.

You can look at doing a PAYG Tax Variation where you get the tax you would've been paid at the end of the financial year in your pay packet each week. This may help with some holding costs of property.

Best of luck - you've done more in your short years here than many do in their whole lifetimes!

 

[MohanWei]

Thanks for reply and supporting words from mary&mat.

Will contact mortgage broker soon and also look at PAYG tax variations.

Thanks again
MohWei

 

[The Y-man]

Welcome aboard.

IMHO staying within a particular area you are familiar with is not a bad thing.

How did you organise the finance for your other properties?


The Y-man

 

[MohanWei]

Hi The Y-man,

For the first IP, my banker did ask for only my salary statement (have been with one financial institution for the last 6 years). But I am finding it difficult to get finance for my second IP. So I am looking for any other ways of getting it organised.

Regards
MohWei

 

[Jamie M]

You may find finance tough as you are already pretty close to 80%.

Lenders will generally go up to 90% - you'll have to pay some LMI. In any case, looks like those properties might be crossed - prob best to try and untangle first.

 

[Rolf Latham]

Hi The Y-man,
But I am finding it difficult to get finance for my second IP. So I am looking for any other ways of getting it organised.

Regards
MohWei

Hi Mohan

You may have to break up the cross collateralisation on your current setup if your current lender wont release any more funds due to serviceability.

There are ways you can make it work, but if your current bank cant make it work an independent broker that works with investors should be able to make something work

ta
rolf

 

[MohanWei]

Thanks for the input Rolf Latham.

I have received PM from a broker based in QLD who can help on this. Hopefully I will secure my second IP soon.

This forum is really helpful and thanks for everyone here.

Regards
MohWei