How do people buy dozens of house yet on the same wage

[RumpledElf]

You can spot them - they come up on re.com.au or domain and you just know they're not going to sell fast. The sort where you look at it and go "nah, there's gotta be something terribly wrong with that house, ewww, why would anyone buy THAT"

Ours was listed for about $80k for well over a year and we were ignoring it because the price was soooooo below all the other listings (all in mid 100s-high 200s). It wasn't listed as subdivisible. The ad had a spelling mistake in the title. They took our offer of $65k. I've seen several other houses come and go that would have been worth getting and fixing up but we aren't in a position to buy.

Now we have a house worth in the mid-high 100s and a block of land worth $50k for an outlay of about $30k, and the option to build new on the land. If we could repeat this just once or twice again we could be set for life.

 

[blaster]

You can spot them - they come up on re.com.au or domain and you just know they're not going to sell fast. The sort where you look at it and go "nah, there's gotta be something terribly wrong with that house, ewww, why would anyone buy THAT"

Ours was listed for about $80k for well over a year and we were ignoring it because the price was soooooo below all the other listings (all in mid 100s-high 200s). It wasn't listed as subdivisible. The ad had a spelling mistake in the title. They took our offer of $65k. I've seen several other houses come and go that would have been worth getting and fixing up but we aren't in a position to buy.

Now we have a house worth in the mid-high 100s and a block of land worth $50k for an outlay of about $30k, and the option to build new on the land. If we could repeat this just once or twice again we could be set for life.

Ahh Rump I thought you were already set for life , nice to know I'm not the only one with more to do.
But what you've said - " IF " we could repeat ! I've formed the opinion lately and I'll admit my strategies flowed about a bit but if I looked for this type of thing alone and dug up even just one every two yrs, I'd be 3 x better off and no financing, messing about buying 3 or 4 so so's in the same period, If only I had that patience .
There's been two in my area in 2 yrs, I missed both would you believe.
Cheers

 

[cloudyday]

equity, people just keep buying more and more with loan deposits, anyone on decent salary could do it. People like us are screwed if interest rates rise dramatically and everyone sells at the same time. Otherwise, its a CG+ game.

 

[RumpledElf]

But what you've said - " IF " we could repeat !

House prices here are going beserk. There's not much 'doer-upper' stock *left* around here either, most have been knocked down, subdivided and then new houses built there that are worth $300K+. But they do exist, they're just not for sale right now. Not selling my old house doesn't help matters either.

Our main problem is a very low self-employed income and all our disposable income going straight to paying off around $8k in subdivision fees so we could sell this house if we wanted to - no way I'm selling it with subdivision *approval* and let someone else pay the last few $1000 to finish it themselves.

If things work out, a nice, below-average subdivisible place will magically pop up for $120k just when we've got our place ready to go and we can move there without having to mess around with really borderline finance deals to build on our vacant block. The figures are great for building there but having two overlapping lo-doc 60% loans during construction is the killer.

 

[heathgt350]

Thanks RE and Blaster, I'll keep my eye out

Reading these forums is certainly helping me to think outside the square!

 

[Minxdamanx]

Thanks RE and Blaster, I'll keep my eye out

Reading these forums is certainly helping me to think outside the square!

The square isn't a bad place to be either.

Sometimes it's better to not try anything ots for the first one or two, just learn as you go.

Good luck with it all.

 

[heathgt350]

The square isn't a bad place to be either.

Sometimes it's better to not try anything ots for the first one or two, just learn as you go.

Good luck with it all.

That's good advice too, thanks minx

 

[blaster]

Thanks RE and Blaster, I'll keep my eye out

Reading these forums is certainly helping me to think outside the square!

Actually I wouldn't know what a square looked like to be honest but not to say there is anything at all wrong with the conservative approach.
Most people seem to just accumulate slowly, conservatively, sticking within typical order and they do accumulate no doubt about that one . It's amazing what even that racks up in what is really only a very short time. As good a strategy as any I feel.
That doesn't suit me though as I like creating with a property and doing as much as I can with it . I also want to go f/t so I like having something to do.
If your serious for those hidden gems you have to do more than just keep your eye out though, as I've found out the hard way, they tend to slip straight under the old radar and usually don't come with the advertising package, just an RE window or something which I rarely bother looking at these days. They can be pretty allusive as the RE's are too busy going for the money deals.

Cheers

 

[blaster]

House prices here are going beserk. There's not much 'doer-upper' stock *left* around here either, most have been knocked down, subdivided and then new houses built there that are worth $300K+. But they do exist, they're just not for sale right now. Not selling my old house doesn't help matters either.

Our main problem is a very low self-employed income and all our disposable income going straight to paying off around $8k in subdivision fees so we could sell this house if we wanted to - no way I'm selling it with subdivision *approval* and let someone else pay the last few $1000 to finish it themselves.

If things work out, a nice, below-average subdivisible place will magically pop up for $120k just when we've got our place ready to go and we can move there without having to mess around with really borderline finance deals to build on our vacant block. The figures are great for building there but having two overlapping lo-doc 60% loans during construction is the killer.

Sounds like our tune Rumpled.
We have a mixed bag ourselves right now and one v/expensive loan on the side, they can be a killer.
I may pay it out in a few mths if I sell another one I'm in the middle of deciding what to do with right now, so we're putting up with it while waiting on that outcome for now.

Cheers

 

[RumpledElf]

We'll be fine as soon as I track down the woman who wanted to rent my house out - silly lady has a Virgin phone or something that has no reception out here in Telstra Land so I can't ring her back

Not an insurmountable problem, however. That's why they invented pen, paper, and the general store.

 

[bradje]

Interesting....
I'm in the same boat at the moment. 3 CF +ve properties, yet the CBA are telling me that I can't get a 4th. Equity is not a problem.

I am having a bit of a tussle with the particular guy who looks after me, just to see how he is coming to his decision. Seems that he can't give me more cos I earn too little, but as I keep saying to him, "Hey, I don't need to earn a penny to keep the properties going. They pay for themselves".

3 years ago, they would have been falling over themselves. I notice even Steve McKnight has given away the strategy in the current climate (unless I have mis-interpreted what he is saying).
Yet what seems strange to me is that some lenders, like Suncorp are giving away 95% loans to 1st home buyers, with nothing but 5% down. But CBA are dragging the chain. Maybe I need to talk to a few more lenders....

JB

 

[josko]

Interesting....
I'm in the same boat at the moment. 3 CF +ve properties, yet the CBA are telling me that I can't get a 4th. Equity is not a problem.

I am having a bit of a tussle with the particular guy who looks after me, just to see how he is coming to his decision. Seems that he can't give me more cos I earn too little, but as I keep saying to him, "Hey, I don't need to earn a penny to keep the properties going. They pay for themselves".

3 years ago, they would have been falling over themselves. I notice even Steve McKnight has given away the strategy in the current climate (unless I have mis-interpreted what he is saying).
Yet what seems strange to me is that some lenders, like Suncorp are giving away 95% loans to 1st home buyers, with nothing but 5% down. But CBA are dragging the chain. Maybe I need to talk to a few more lenders....

JB

hi JB,

Well done on the 3+ properties. You need to move to another bank. Get a MB that can run a few figures for you. Different banks...different servicing calculators. You also need to diversify your banks and seem to have too much exposure to CBA.

If you have X-Collateralised......you'll need a creative broker! Good luck!

95% Lending for FHOB = less debt, less exposure. Yours is a different scenario.

Regards JO

 

[blaster]

G'day JB and Jo

Yeah and see that was the origional point . I read everywhere of even on fairly good incomes people getting stumped at the 3 or 4 mark and this is what I don't get with the on going purchases from there.
JB has the equity , CP properties paying for themselves and according to the gurus you just keep on buying from there . Yet at this point in reality it's as if you could squeeze one more over the line pulling out all the stops but unless your income ups from there that's the end of the road for quite a spell .

In reality it seems really that most people who can keep buying from there do have well above average incomes .

 

[josko]

G'day JB and Jo

Yeah and see that was the origional point . I read everywhere of even on fairly good incomes people getting stumped at the 3 or 4 mark and this is what I don't get with the on going purchases from there.
JB has the equity , CP properties paying for themselves and according to the gurus you just keep on buying from there . Yet at this point in reality it's as if you could squeeze one more over the line pulling out all the stops but unless your income ups from there that's the end of the road for quite a spell .

In reality it seems really that most people who can keep buying from there do have well above average incomes .

yes, you are right blaster.

There are three hurdles:

1. If you stick with the same bank, you will come across problems. I have a client atm who has been told it is not possible to lend more money based on income.

WRONG. At that particular bank- Yes, but certainly not at other banks.

2. Incomes can restrict you in the current lending climate. I don't believe this will always be the case.

3. The biggest problem: Negativelty Geared properties.

Without knowing enough details I can only guess that it is not JB's income that is restricting him. It may be X-Collateralisation and the bank.

I guess you could climb this hurdle when you get there blaster. Tomorrow's lending and opportunities can be very different from today's.

Regards JO

 

[Rolf Latham]

Hiya Josko

All u said and

Negatively geared people

Tis good to have a breath of fresh air like u around !


ta
rolf

 

[bradje]

Ta Josko.
I do not understand why an expeienced CBA lender would have any more "issues" with loans than another lender/broker. Yet, it does seem to be the case!!

I hate switching lenders though. It always costs a few grand. I'll report back after I have made a few more calls and gained a few more grey hairs
Cheers,
JB

 

[jingo]

In reality it seems really that most people who can keep buying from there do have well above average incomes .

Or are those who pay down their debt before buying again. Repeat ad nausium.

 

[Kristine..]

Ta Josko.
I do not understand why an expeienced CBA lender would have any more "issues" with loans than another lender/broker. Yet, it does seem to be the case!!

I hate switching lenders though. It always costs a few grand. I'll report back after I have made a few more calls and gained a few more grey hairs
Cheers,
JB

Hi JB

You do not have to 'switch' lenders - just give the current lender a rest for a while and pursue the slightly greener grass on the other side of the fence.

CBA have an interesting serviceability formula. They are a good lender to start of with, get all the bells and whistles set up, but you may need to do the serious borrowing with other lenders as you go along.

Over the past twelve months CBA market share has risen to a whopping 73% - and over the past few months they have restricted serviceabilty to reduce their exposure. Keep in mind that most customers are a One Loan Wonder, the target market for any lender is the home buyer, not the investor.

Perhaps it is time for you to suss out a few brokers to help complement rather than replace your CBA loans, which of themselves are probably good quality products.

Take care to not throw the baby out with the bath water. Growth and your existing loan portfolio are not mutually exclusive, rather you should build on that which you already have.

Brokers are a bit like plumbers: You don't need one till you need one, but that doesn't mean that the first plumber will earn your undying loyalty and respect from one conversation or one leaky tap - or one new loan.

Take your time to find the resources to take you into the next stage. You are still in the early days of your investing journey and you have plenty of time to do the job well.

Cheers
Kristine

 

[bradje]

Ta Kristine....Yeah I know this is a plodding thing.....But the pieces of the puzzle are starting to fall into place and I just want to "make hay while the sun shines".
i think I just need to sell the right business plan to the bank and it will happen. The CBA guy I am dealing with is open to more suggestions, so it's a matter of persevering.
JB