I finally get it!!

[MsAli]

Hi all,

Thought I'd post a thread and let you know that I FINALLY get it. I get my strategy and I can somewhat see the glass half full.

I wasn't liking the Sydney boom...when I really should. But we are looking for a few more properties right now and it's a relief to read posts from the likes of MTR, Rixter, see_change to name a few.

I finally get compounding growth. And I know what I want to do in three years once the basic asset base portfolio is built.

Although I need to write this all down and look at the numbers and what I want as the END RESULT/$ figure, I just know that I would likely leave corporate world much earlier than I first set the date!

I want to say thank you to everyone who contributes on SS. I have learnt a lot and I keep learning.

Thanks
MsAli

 

[MTR]

Hi all,

Thought I'd post a thread and let you know that I FINALLY get it. I get my strategy and I can somewhat see the glass half full.

I wasn't liking the Sydney boom...when I really should. But we are looking for a few more properties right now and it's a relief to read posts from the likes of MTR, Rixter, see_change to name a few.

I finally get compounding growth. And I know what I want to do in three years once the basic asset base portfolio is built.

Although I need to write this all down and look at the numbers and what I want as the END RESULT/$ figure, I just know that I would likely leave corporate world much earlier than I first set the date!

I want to say thank you to everyone who contributes on SS. I have learnt a lot and I keep learning.

Thanks
MsAli

You now have your strategy/end plan and as long as you have the determination/passion you will most definitely succeed.

You also happen to be jumping into the property cycle at the right time this will speed up the process, sometimes all you need is one boom cycle, forget lotto

All the best

 

[see_change]

Hi Ms Ali

Great to hear that . Look at the next step .

Do you want to wait or do you have the opportunity to take another step that you might not have thought of taking.

Paul Zag had an interesting thought on how long it takes to make serious money in property. ( paraphrasing )

The first cycle - " what the f ..... happened ??

Second Cycle - " ah .... that's what happened .... "

Third Cycle - is when you make the money.

For me , this forum enables people who read , watch and listen , to do serious damage in their first Cycle .

We didn't start until after Sydney had already boomed in the last cycle , however seeing what had happened , talking to people on the forum , posting , and asking and answering question enabled us to make serious money in the last half of the last cycle .

At the moment for me , it really comes down to how much we want to risk what we've made to gain more . I'm happy to gradually extend our exposure over the next 1-2 years while we keep a close eye on what is going on.

Cliff

 

[monalisa]

We didn't start until after Sydney had already boomed in the last cycle , however seeing what had happened , talking to people on the forum , posting , and asking and answering question enabled us to make serious money in the last half of the last cycle .


Cliff

Hi Cliff, like always, very insightful.

Here, are you talking about the boom in 2003? At what stage of the boom did you start purchasing? (ie when was the "Last half of the last cycle")

How do you define serious money?

Wondering where our portfolio may end up in the next few years - it is exciting - but we are looking for two more, hopefully get these two done ASAP - should be ready to buy another two soon as Sydney continues to move, but will have to revisit and determine if it is best to purchase else where.

 

[devank]

Today's (10 Aug 13) Auction results (Sydney)
Total Properties: 263
% Cleared: 84%
Median: $810,000

I can't wait for the spring

 

[see_change]

we started buying in around 2002 .

By that stage , Sydney's boom was entering it's last stage , Central Brisbane had gone up significantly and the only places that hadn't moved up dramatically were places like logan , caboulture , ipswich ( no one was game to buy in Inala ....) and regional areas.

Day after my fortieth Birthday I had my moment on the road to Damascus.

Life begins at Forty ( 1998 ) .... back of envelope calculation showed house with large mortgage , three kids at private schools and no superannuation.

We were able to do a subdivision where we lived , so by 2002 , we had a much nice house with more equity but everything else was unchanged .

Ended up selling the house of which one of my wife's friends said " I'd have to be dead before you got me out of this " ..... bought a another house for half the money ( and no mortgage ) and then got seriously into property investing . Moved house just after 9/11.

After our initial bout of property investing we then had an even nicer house ( with no Mortgage !!!! ) , less school fees ( we actually paid a couple of lump sums in advance ) and a health balance in our super . Out side the change in attitude & mood by knowing that we were going ahead more than made it worth while.

I've never accurately calculated the figures ( can't be bothered ) but our equity went up several fold , at a minimum by around 2 mill.

Given we had owned PPOR's since 1988 we had some equity in our PPOR and this is really important to help the process. I don't think you can save enough to get the deposits you need to to make fast progress . I have a reliable income and that has certainly helped.

Get you're initial deposit , make capital gain , refinance and use the new money to fund a deposit for your next.

The biggest trap ... Getting sidetracked into " better ways to make money " but more on that in another post . http://somersoft.com/forums/showthread.php?t=90527

Cliff

 

[alexlee]

Two things to keep in mind, for perspective:
1) There is nothing you can do to affect the cycle. It goes up, you can't stop it. It crashes, you can't stop that either.

2) You will go through many cycles before you're dead. Get used to it.

Take it easy. If you believe that the long term trend is up, don't worry about the ups and downs.

 

[evan1875]

Hey See-Change, could you please do an interview with the Y-man>

 

[MTR]

Two things to keep in mind, for perspective:
1) There is nothing you can do to affect the cycle. It goes up, you can't stop it. It crashes, you can't stop that either.

2) You will go through many cycles before you're dead. Get used to it.

Take it easy. If you believe that the long term trend is up, don't worry about the ups and downs.

That's a good point, that is why it is important to strategise sell some of your stock prior to the market peaking, that way you are not holding property that will bleed you dry.

When the market crashes properties can fall back to below original purchase price, however you still have the debt and are stuck with it until the next boom cycle perhaps 7-10 years.

 

[alexlee]

That's a good point, that is why it is important to strategise sell some of your stock prior to the market peaking, that way you are not holding property that will bleed you dry.

If you can survive the first cycle, it's unlikely your properties will be that negatively geared by the second cycle. Unless you keep borrowing to the limit.

When the market crashes properties can fall back to below original purchase price, however you still have the debt and are stuck with it until the next boom cycle perhaps 7-10 years.

By the time you enter your second cycle (out of the half a dozen or more you'll experience in your lifetime), it doesn't matter.

 

[MTR]

If you can survive the first cycle, it's unlikely your properties will be that negatively geared by the second cycle. Unless you keep borrowing to the limit.



By the time you enter your second cycle (out of the half a dozen or more you'll experience in your lifetime), it doesn't matter.

Many factors come into play, ie interest rates, location etc.

For example - I am selling a property which I built 8 years ago (land and house package) and its not quite neutral and we are talking 5% IR here, imagine if it was 7.5% it would most certainly be negatively geared. I am in Perth and rising market started 18 months ago.

If I had sold it after the build I would have made $200,000. I will now make $120,000 on sale after 8 years and holding a negatively geared, with swings in IR during this period of much higher than 8%.

If a property has potential for strong cash flow from day 1 or there is an opportunity in the future to add value, ie renovate/develop I am more than happy to hold and just access the equity moving forward.

I have learnt a few lessons as I have been through at least 4 property cycles now in the last 12 years. I now rationalise what I will keep and what I will sell.

MTR