How well-informed were you before entering market?

[our obsession]

Prior to building our first property we did have a lot of fun educating ourselves about our proposed area. We took every opportunity to venture there and visit open for inspections, check out different builders handywork, become very familiar with all the suburbs, observe auctions, just everything... it was great, we both got a lot out of it.

Our money was invested at the time and we used that timeframe (before it became available to us) to learn some stuff about stuff.

I did get my hands on a few books, (Steve McKnight's, Rich Dad Poor Dad, Dolf de Roos and Jan Somers) during this period...and accessed everything since! But the biggest learning curve was doing it...and again, and again...and...

Then the next thing was...oh s***, how do we keep doing this, don't want to be knocked back ...especially as we've only just started...scurried for a Mortgage Broker (Kristine ) and that was the biggest learning (and still is) curve...money and loans and products and systems and all that stuff is their speciality...(if you know what I mean), we are keen to concentrate on the property bit... personally, myself...and this is only me... figures and calculations and dealing with banks and all that I find really boring...I know enough to continue buying property that is the right deal and purchase for us but I am ever so happy to have Kristine to work her magic.

Yes Dazzling we are more than happy to cross collaterise and be up the wazoo!! ...you have no idea how much we love wazooing...but we haven't actually wazoo-ed all the way there...part this, part that... so we still have a lot of options, and that's what a Mortgage Broker has been for us, plonking great options, products and scenarios before us (that suit our particular circumstances) so we can keep doing what we want, the best way we can and repeat...

So, what we thought we knew at the time...and what we did initially was okay, but now we have a great Mortgage Broker, a great Accountant, a great Builder, a great Handyman, great Insurance Brokers, great Property Manager...it's like, don't be frightened or apprehensive to assemble a great dreamteam to help you chase that property dream.

That's what we have found the best thing for us...everybody is different of course, this is just what we have done as we have become better informed and more experienced property investors.

 

[sailor]

I was really naive about investment property when I started. I didn't consult the team (eg., a broker, banker, insurer, book, course, lawyer or accountant, or even know SS existed). Just poked around my local suburb looking for a bargain. Fortunately I lucked on a bargain at the right time in the right place.

Now I have the team in place...I'm older, wiser, wee bit more learned, and my growing list of IP's are now better value, insured, better structured, with better tax deductions, and growing faster in CG and CF.

Do I wish I knew then, what I know now? Yes, please. Having a good team behind me is both reassuring and filled with expertise.

 

[Les]

G'day Dazzling,

My very, very limited knowledge of brokers is that they fully encourage you to not X-coll, not for your protection, which they constantly put forward, but more for the fact that it allows them the flexibility of shopping around to different banks.

I believe there are very good reasons for not x-colling (my Broker told me - but then, he was preaching to the converted....) and most of it is "down the track" stuff -like, if/when you want to sell just one of them.

Our experience has been that we are happy to be X-colled up the wazoo

and I know others in the forum who have done VERY WELL this way too.

.. but then this allows us to breach the 80% LVR "limit" commonly referred to, and subsequently allows us to leverage to the max

Bzzt - lose 5 points - in my world, x-coll or not has nothing to do with 80% LVR. My broker can do a 97% lend for me without x-coll.

As I understand it, x-coll can make your CURRENT Bank happier to cut you some slack (more so if you have "runs on the board" - think that means YOU, Dazz ). But it doesn't mean x-coll is the ONLY way you'd be able to do the same deal.

Anyway, you seem to be doing pretty good just the way you are, Dazz - xcoll and all

Regards,

 

[Bandita]

Yes Dazzling we are more than happy to cross collaterise and be up the wazoo!! ...you have no idea how much we love wazooing...but we haven't actually wazoo-ed all the way there...part this, part that... so we still have a lot of options, and that's what a Mortgage Broker has been for us, plonking great options, products and scenarios before us (that suit our particular circumstances) so we can keep doing what we want, the best way we can and repeat...

Hi Ourobsession,

Can you help me understand why you have been cross collaterising so heavily and why you love it so much? I might be very confused - but I would consider that a last resort to trying to get finance? Do you have a sound exit strategy with that in place? Would love to hear your thoughts!

Cheers,
Jen

 

[Simone]

My mother was my mentor at the beginning....and a bit further along too! so I did not research for my first IP, but mums are always right - and she was. I am glad to say that my husband and I can now purchase property by ourselves! We usually start with a realistic figure for the mortgage we can afford to support - don't over extend. Narrow down the area, look for areas that have not taken off as much as others around it and then research. As others have said spend time viewing homes so that you become confident with houses that are well priced and over priced so that when yours comes along you will know. Don't be put off by homes that just need paint / new carpets and window treatments (basic cosmetic makeover) as often you can get them at a good price for the area as other people can't see past the pink carpet!

 

[our obsession]

My thoughts...



But Jen, isn't this what it's all about? We are all so different, people wise, circumstances, finances, the property we have compared to you...to others, how we view things? how we arrange our finance? Is there a right or wrong? Is there a risky vs safe? complex vs simple?...is it not each to their own?

The other thing is via my enthusiastic? nature and post, I have made us sound like we are out there x-collaterising the world...apologies for that...I just get excited easily, we have only done it the once, the others are stand alone (at the moment), but we wont hesitate to x-coll them if we so desire, and that will be Peter and my decision, our choice, when we have all the info before us before acquiring or building the next IP....and this is why a Mortgage Broker is so great, especially one that has IP's herself, the experience and ideas and knowledge and having been around the block a few times...my stepsister has some property and she has never used a Mortgage Broker, she revels in playing off Bank against Bank... finance as to compared to whatever other deal she can get...she loves that! The idea of that bores me to tears, and my partner.. he would go demented.

The current x-coll property has seen us acquire two more houses, it could have been three, our offer wasn't accepted and we walked...we can keep buying properties through that x-coll'd set up indefinitely, as long as we purchase a property that will return a set gross return...would have to run through all the figures to tell you what current return is required...

Exit strategy? Why would we want to exit, the only way we are exiting the property game is if we cark it...do you mean if problems occur or tough times hit us?

If problems or things go wrong, then we will find a solution, failure is not an option, words easy said? why yes..but do we mean it, hell yeah.

Exit strategy? I don't know...we have our buffer, we have great insurance, properties, life, accident, illness, income, interest rate rises? go for it...wont worry us for a while..(long long while)...time is on our side.....when it comes to property investing I believe Peter and myself have a very simple view...buy property and keep buying (or build) property that fits our criteria and lays the groundwork to keep buying more property...so far it consists of IP's in rural cities and country Victoria and there would be some who may think it unwise to have too many eggs in the bush...I guess? time will tell in regard to our penchant for x-coll and rural city/town locations...but so far it's working really well and we are very very happy people.

As our properties build up their equity and we access and leverage to acquire more x-coll them is a great option for us...we still have a couple of floaties...stand alones, the thing is we haven't had to x-coll anymore (yet) because we haven't used up all the bikkies in the other barrel

This forum is fantastic re information/experience and sharing... but at the end of the day we must do what's right for us.. at the moment... and it may not be a generally popular or approved measure by other property investors, and that's okay.