How/where to start my IP portfolio - help

[Dominican]

Hi guys,

What do you think about using this service to start my IP portfolio?

http://www.investsmartproperty.com.au

I went to my bank and our borrowing capacity is high (we have 100k savings and a monthly salary 15/16k).

We are in a good position, but I donot where to start!!! I am happy to use s third service company to find the right place to buy and advices. This one is for free...

Any suggestion please?

Thank you in advance.

 

[knightm]

Hi guys,

This one is for free...

Any suggestion please?

Thank you in advance.

Welcome Dominican.

As to the company you mentioned - they are not free.

They appear to market new property and they get paid by the seller/developer. This means they work for them, and their objective is to move stock.

Suggestions:
1 The forum here has masses of wisdom so stick around, spend some time, do some searches and you will learn a lot.
2 If you have time read a few good property books (check out the information resources section)
3 You do need a team. I generally find its better to look for recommendations individually for brokers, accountants, solicitors. Then discuss with them your goals to see if they fit. Spending some time getting the right team is well worth it, as a lousy team will cause you grief and cost you thousands.
4 If you choose someone to help with buying property specifically they should be independent. That means licensed and working for you only. That means they will charge you, but you know they are not on the take from other sources.
5 refer to point 1!

All the best.

 

[Terry_w]

The free ones generally cost you more.

 

[J_aco]

Hi OP:

1. Educate yourself as much as you can first; know your end goal; work out the strategy that will get you to your end goal and work backwards from there.

2. Please don't rush into it just because you need to get in. (I myself am guilty of that so I'd like to pass this advice to others)

3. Develop a team as Matt said - you need a good broker for sure; accountant; solicitor etc. Contact as many as you can to see if you can work together.

4. The other thread you mentioned 1st IP in Bris - any suburbs you're thinking about? Rough budget?

Hope all goes well mate!

 

[LeoT]

Hi OP:

1. Educate yourself as much as you can first; know your end goal; work out the strategy that will get you to your end goal and work backwards from there.

2. Please don't rush into it just because you need to get in. (I myself am guilty of that so I'd like to pass this advice to others)

3. Develop a team as Matt said - you need a good broker for sure; accountant; solicitor etc. Contact as many as you can to see if you can work together.

4. The other thread you mentioned 1st IP in Bris - any suburbs you're thinking about? Rough budget?

Hope all goes well mate!

This is great advice. Spot on IMO.

Leo

 

[Dominican]

Hi OP:

1. Educate yourself as much as you can first; know your end goal; work out the strategy that will get you to your end goal and work backwards from there.

2. Please don't rush into it just because you need to get in. (I myself am guilty of that so I'd like to pass this advice to others)

3. Develop a team as Matt said - you need a good broker for sure; accountant; solicitor etc. Contact as many as you can to see if you can work together.

4. The other thread you mentioned 1st IP in Bris - any suburbs you're thinking about? Rough budget?

Hope all goes well mate!

Thank you for your comments!

The forum is helping a lot. I am starting to build a team, I have an accountant and a financial planner to draft the strategy for the next years, We are waiting for our pre-approval from the bank.

In terms of suburbs, as I mention in my previous thread, the idea is to buy a 300/350K (3 bedrooms) house in suburbs like south Brisbane (Inala, Forest Lake, etc.) or Logan as an IP (both suburbs have high rate in http://boomapp.com.au/). We have 100k savings and I think in 6 months we can have 60/70k more to pay in the mortgage. In this point our equity will be high and we can move to acquire another house.

I have made my own rule to buy only houses (not body corporate) with 3 bedrooms... my focus is families with children with low to medium income. They will stay longer renting the house to avoid to move in/out.

Also, I will renovate the IP if needed to make it more attractive and try to adjust the rent. My objective the first couples of years is not get too much profit from the rent. Now we both have good jobs, my idea is grow the portfolio and pay as much mortgage as possible.

Does it sounds ok for the gurus?

Thank you in advance!

 

[Redom]

Thank you for your comments!

The forum is helping a lot. I am starting to build a team, I have an accountant and a financial planner to draft the strategy for the next years, We are waiting for our pre-approval from the bank.

In terms of suburbs, as I mention in my previous thread, the idea is to buy a 300/350K (3 bedrooms) house in suburbs like south Brisbane (Inala, Forest Lake, etc.) or Logan as an IP (both suburbs have high rate in http://boomapp.com.au/). We have 100k savings and I think in 6 months we can have 60/70k more to pay in the mortgage. In this point our equity will be high and we can move to acquire another house.

I have made my own rule to buy only houses (not body corporate) with 3 bedrooms... my focus is families with children with low to medium income. They will stay longer renting the house to avoid to move in/out.

Also, I will renovate the IP if needed to make it more attractive and try to adjust the rent. My objective the first couples of years is not get too much profit from the rent. Now we both have good jobs, my idea is grow the portfolio and pay as much mortgage as possible.

Does it sounds ok for the gurus?

Thank you in advance!

Sounds pretty good Dominican.

I've derived so much value from having a team of investors around me - not selling their services, but talking about property in a likeminded way. Opens me up to lots of different strategies and makes it seem very achievable. Could be worth developing your own network of investor friends as a learning tool. SS is an online version of it.

Cheers,
Redom

 

[Redom]

Thank you for your comments!

The forum is helping a lot. I am starting to build a team, I have an accountant and a financial planner to draft the strategy for the next years, We are waiting for our pre-approval from the bank.

In terms of suburbs, as I mention in my previous thread, the idea is to buy a 300/350K (3 bedrooms) house in suburbs like south Brisbane (Inala, Forest Lake, etc.) or Logan as an IP (both suburbs have high rate in http://boomapp.com.au/). We have 100k savings and I think in 6 months we can have 60/70k more to pay in the mortgage. In this point our equity will be high and we can move to acquire another house.

I have made my own rule to buy only houses (not body corporate) with 3 bedrooms... my focus is families with children with low to medium income. They will stay longer renting the house to avoid to move in/out.

Also, I will renovate the IP if needed to make it more attractive and try to adjust the rent. My objective the first couples of years is not get too much profit from the rent. Now we both have good jobs, my idea is grow the portfolio and pay as much mortgage as possible.

Does it sounds ok for the gurus?

Thank you in advance!

PS if you're going to the same bank for multiple purchases - do not cross your loans. Read the 'securities' section of your loan contract very closely, banks generally do this by default!

Cheers,
Redom

 

[Jamie M]

2. Please don't rush into it just because you need to get in. (I myself am guilty of that so I'd like to pass this advice to others)

Agreed - and that's what I tell my clients too. Just because you've got some equity released - doesn't mean you have to spend it the next day.

At the same time - it's important to not get to a point where you've completely over analysed each deal and haven't been able to move forward on any.

Cheers

Jamie

 

[wylie]

Have you gone directly to a bank? I think you are better to go to one of the brokers from the forum. They understand the problems of crossing your loans and are able to look at multiple lenders. They also are investors themselves which is a big plus.

 

[LeoT]

[QUTEDomnican;1260701]Thank you for your comments!

The forum is helping a lot. I am starting to build a team, I have an accountant and a financial planner to draft the strategy for the next years, We are waiting for our pre-approval from the bank.
Great start, The accountant is good but I'm very doubtful about the financial planner to help you build wealth as its not their focus to help people to build wealth. I don't know your age but unless your in your late 50's, I don't see much use for a FP IMO, and they can actually hinder your wealth development as I have seen a few times before. your FP might be different though, just keep this mind. Also you need a good mortgage broker if you don't have one already.



Also, I will renovate the IP if needed to make it more attractive and try to adjust the rent. My objective the first couples of years is not get too much profit from the rent. Sounds good, in terms of building your base you want the best chance for equity growth, much more important than $5/week positive cash flow at the expense of a better chance to build equity faster in something slightly negative CF IMO. So well done.

Now we both have good jobs, my idea is grow the portfolio and pay as much mortgage as possible. If you mean pay down the debt as much as possible, that will slow you down very much from building wealth. I'm not sure if that's what you mean though?

Well done on starting mate!

Leo QUOTE]

p.s whatever you do, DO NOT cross collateralise your loans. Any accountant/broker/financial planner who suggests this, should be the last thing you allow them to tell you before you bolt for the door.

 

[scha9799]

I think you are on the right track.

One thing regarding to renovation, I would suggest if you are doing it for the first deal, don't get too excited with run down house, often, I see run-down-house got sold more than ok or livable house, just because a house needs a reno, don't necessary mean there is a profit to be made in the end.


I hope this will help

 

[J_aco]

Agreed - and that's what I tell my clients too. Just because you've got some equity released - doesn't mean you have to spend it the next day.

At the same time - it's important to not get to a point where you've completely over analysed each deal and haven't been able to move forward on any.

Cheers

Jamie

Jamie's right too on - don't get analysis paralysis! (like me with my shares... sometimes I think too much and didn't buy when I should have)

But Dominican you've mentioned the potential use of BA - that's not a bad idea as you'll be more likely to proceed. As long as you yourself know what you're looking for - in this instance 3BR house - and then do your own DD to see if it's a suitable deal (does not always have to be a 'bargain', buying 'fair' with a long term view, and with scope to add value etc, you won't go too much wrong IMO)