How do you keep purchasing properties?
- Thread starter Alex1
- Start date
Well the diff in a $20k CC is huge...almost $600 per month in servicing.
Are you following all of the below (including #7)
I'm doing all 7 of those.
What happens if your partner forces you a no: 7
find a new partner
I can visualise the robot in Lost In Space waving his arms up and down saying....... Danger Danger Danger.
Here's a post from 2011 on How to build a 10 property portfolio in 3 to 5 years realistically on $50,000 pa.
Have you played monopoly as you can learn!
Alex1,
Have you ever played the Monopoly? Did you ever have a strategy what and when you would buy? If you win in that game and have a similar strategy in life you cannot go wrong!
To start we buy average, so to answer your questions, no I wouldn't buy one property worth $800k nor would I buy four worth $200K, for me would be where and what they could achieve over 30-40 years as my strategy would be never to sell.
Eventually like in Monopoly, you learn the game, you start buying the hotels (the more expensive upmarket IPs, right?) once you can hold and afford the houses, you learn the game. You cannot place a number of IPs, your strategy, time and life and your circumstance will dictate that.
And most of all it is not the number of IPs you hold but what your asset worth would be, like in the game, do you remember how one person could wipe you out when you landed on Park St (was it that the most expensive street???), where they owned hotels there? They didn't need to own properties everywhere, on every street, right, just few good ones could do the job, right?
I must admit I haven't played the game for some time, but I certainly play the game in real life now!
So set a strategy, start buying average, don't worry how many you will buy, no one has a crystal ball, keep buying if you can afford and you like what you can afford, eventually once you have collected more rent, buy few hotels.
And you can keep repeating the process again...Also you can diversify and buy few utilities, if that is your strategy too, right?
SO play few games and see how you go....good luck. Perhaps it would help you with the strategy you chose, as I can see that you understand a lot but are unsure on what the strategy is for you, am I correct there?
Alex1,
Have you ever played the Monopoly? Did you ever have a strategy what and when you would buy? If you win in that game and have a similar strategy in life you cannot go wrong!
To start we buy average, so to answer your questions, no I wouldn't buy one property worth $800k nor would I buy four worth $200K, for me would be where and what they could achieve over 30-40 years as my strategy would be never to sell.
Eventually like in Monopoly, you learn the game, you start buying the hotels (the more expensive upmarket IPs, right?) once you can hold and afford the houses, you learn the game. You cannot place a number of IPs, your strategy, time and life and your circumstance will dictate that.
And most of all it is not the number of IPs you hold but what your asset worth would be, like in the game, do you remember how one person could wipe you out when you landed on Park St (was it that the most expensive street???), where they owned hotels there? They didn't need to own properties everywhere, on every street, right, just few good ones could do the job, right?
I must admit I haven't played the game for some time, but I certainly play the game in real life now!
So set a strategy, start buying average, don't worry how many you will buy, no one has a crystal ball, keep buying if you can afford and you like what you can afford, eventually once you have collected more rent, buy few hotels.
And you can keep repeating the process again...Also you can diversify and buy few utilities, if that is your strategy too, right?
SO play few games and see how you go....good luck. Perhaps it would help you with the strategy you chose, as I can see that you understand a lot but are unsure on what the strategy is for you, am I correct there?
Individual circumstances ( income, debt levels etc ) and you're willingness to pull the trigger (instead of being paralysed by pickiness) are the two primary things that will determine how quickly you can grow. And a bit of luck doesn't go astray either .... i.e catching a quick growth cycle - but by and large- it comes down to decision making rather than decision avoidance.
What is beyond dispute is this - You need equity and cash flow to grow a portfolio. All the equity (used for deposits) in the world is useless without sufficient cash flow to qualify for loans. And all the cash flow in the world ( borrowing capacity) is useless without equity to provide deposits.
Most people - even those with some investment property experience, simply aren't disciplined enough to achieve things quickly, because they spend too much time dithering, searching for that utopian deal, focus too much on growth at the expense of cash flow, and simply cant see the forest for the trees. It's remarkable how many investors have a "business model" reliant entirely on growth, and then wonder why they cant get beyond 1 or 2 properties ( answer= because they run out of borrowing capacity)
I've paid off a 440K PPOR debt and added 10 new properties to my portfolio in just 2 years, using NRAS. I've reached a point where I have sufficient deductions to enjoy a tax free income, have zero non deductible debt left on my home, and my portfolio not only pays for itself, it makes me about 80K extra , tax free per year. All that extra cash flow , coupled with the equity at my disposal ( from paying off the PPOR) allows me to go much much further , much much faster, which I will quite likely do.
COMPOUNDING, MULTIPLIER EFFECTS = Powerful stuff.
Re the Monopoly example earlier - luck determines outcome as much as anything. But all rolls of the dice in the first 8-10 turns ( when all the purchasing occurs) being equal, the player who focuses on accumulating multiple low- modest assets and buys a lot of them, almost always beats the player who focuses on Park Lane or Mayfair. Takes enormous cash flow to build houses and hotels on those properties, and the probability of other players landing on you and paying you rent is quite low. ( this is where luck is required) On the other hand, the player with multiple, multiple modest properties is much more likely to be able to build a cash flow suffiicient to start adding houses then hotels, and the law of probability dictates that income will keep pouring in because other players will land on those sites more frequently. You rarely lose the game to the Park Lane or Mayfair owner But luck plays the biggest role in determining that.
What is beyond dispute is this - You need equity and cash flow to grow a portfolio. All the equity (used for deposits) in the world is useless without sufficient cash flow to qualify for loans. And all the cash flow in the world ( borrowing capacity) is useless without equity to provide deposits.
Most people - even those with some investment property experience, simply aren't disciplined enough to achieve things quickly, because they spend too much time dithering, searching for that utopian deal, focus too much on growth at the expense of cash flow, and simply cant see the forest for the trees. It's remarkable how many investors have a "business model" reliant entirely on growth, and then wonder why they cant get beyond 1 or 2 properties ( answer= because they run out of borrowing capacity)
I've paid off a 440K PPOR debt and added 10 new properties to my portfolio in just 2 years, using NRAS. I've reached a point where I have sufficient deductions to enjoy a tax free income, have zero non deductible debt left on my home, and my portfolio not only pays for itself, it makes me about 80K extra , tax free per year. All that extra cash flow , coupled with the equity at my disposal ( from paying off the PPOR) allows me to go much much further , much much faster, which I will quite likely do.
COMPOUNDING, MULTIPLIER EFFECTS = Powerful stuff.
Re the Monopoly example earlier - luck determines outcome as much as anything. But all rolls of the dice in the first 8-10 turns ( when all the purchasing occurs) being equal, the player who focuses on accumulating multiple low- modest assets and buys a lot of them, almost always beats the player who focuses on Park Lane or Mayfair. Takes enormous cash flow to build houses and hotels on those properties, and the probability of other players landing on you and paying you rent is quite low. ( this is where luck is required) On the other hand, the player with multiple, multiple modest properties is much more likely to be able to build a cash flow suffiicient to start adding houses then hotels, and the law of probability dictates that income will keep pouring in because other players will land on those sites more frequently. You rarely lose the game to the Park Lane or Mayfair owner
But luck plays the biggest role in determining that.Alex1,
Have you ever played the Monopoly? Did you ever have a strategy what and when you would buy? If you win in that game and have a similar strategy in life you cannot go wrong!
Eventually like in Monopoly, you learn the game, you start buying the hotels (the more expensive upmarket IPs, right?) once you can hold and afford the houses, you learn the game. ... do you remember how one person could wipe you out when you landed on Park St (was it that the most expensive street???), where they owned hotels there?
SO play few games and see how you go....good luck. Perhaps it would help you with the strategy you chose, as I can see that you understand a lot but are unsure on what the strategy is for you, am I correct there?
Great advice. I think Monopoly taught me a lot too.
The fear of the unknown.
Like someone has said, the first bag of coins is the hardest, then it becomes easier for the next bag of gold, and the rest would just be a flow on effect.
The situation you are describing of purchasing multiple IP's would be the compounding effect of the example given above, it does become easier, deposit is the key
Like someone has said, the first bag of coins is the hardest, then it becomes easier for the next bag of gold, and the rest would just be a flow on effect.
The situation you are describing of purchasing multiple IP's would be the compounding effect of the example given above, it does become easier, deposit is the key
I always seem to lose in monopoly.
No one wants to trade with me
Everyone thinks my deals suck.
