Is My Plan Unrealistic?

Good to see you on here lil skater, and good to hear your progression :) Your parents are the perfect role models

* sorry for the thread hi jack andrew *
 
Anything is possible mate, thats why I am aiming for that amount! If I told my parents I wanted 10 houses by 2016, they would probably scream and tell me it's not possible.
 
Hi Andrew,

My advice to you is to ensure that you get a great grounding on finance and cashflow.

This above all is where people fail to build a large enough portfolio....your current property lets for $350 and worth about 345K...this is only a 5% return. You will find it difficult to get past 2-3 properties as they net negative cashflow will start to bite.

You have a high level of leverage....you will either need to find a way to being this down quickly or buy property that only has a small shortfall...rent increases over 1-2 years will bring it down.

Being young...you are probably in a hurry...ensure that you take time to think things through. Interest rates are rising....so factor that in.

In my opinion slow and steady always wins the race....it took me 10 year to build up to 12 properties (I sold 2 over the lasy 2 years).....as a result I know have a 45K pa positive income from my properties and have a 34% LVR.

...another tip in life be careful about people who claim to have done this or that...ensure you that you check their achievements out before taking their advice.


I want us to have the oppurtunity to buy another IP in the next 2 years. I know that westpac give 95% LVR to existing customers of 6+ Months but isn't there more risk with borrowing this sort of money and paying MI?

I am after peoples opinions, help and guidance. Are we looking into IP too soon? Currently I have great motivation to get into real estate and begin our IP journey but when I look at our funds, I can't see how we can do it?

Sorry in advance for the long post, and all the information is all over the place!!!

Regards,
Andrew (Confused Soul :rolleyes:)


P.S. Our Plan is to have 10 IP's by 2016...
 
Hi Andrew,

My advice to you is to ensure that you get a great grounding on finance and cashflow.

This above all is where people fail to build a large enough portfolio....your current property lets for $350 and worth about 345K...this is only a 5% return. You will find it difficult to get past 2-3 properties as they net negative cashflow will start to bite.

You have a high level of leverage....you will either need to find a way to being this down quickly or buy property that only has a small shortfall...rent increases over 1-2 years will bring it down.

Being young...you are probably in a hurry...ensure that you take time to think things through. Interest rates are rising....so factor that in.

In my opinion slow and steady always wins the race....it took me 10 year to build up to 12 properties (I sold 2 over the lasy 2 years).....as a result I know have a 45K pa positive income from my properties and have a 34% LVR.

...another tip in life be careful about people who claim to have done this or that...ensure you that you check their achievements out before taking their advice.

Thankyou for your advice.

The problem I am seeing at the moment is finding properties that are going to give me a rental yeild of over 5%. I have a few suburbs in mind that I want to move onto with my next IP but yeilds are around the same, 5-5.5%. Do I just keep looking, searching for a bargain price in these areas?

Over the next few years we have many plans, not only with property but with careers. Not only will I be a tradesman in 2 years, my partners father wants us to take over his successful bobcat and excavator business. So hopefully we will be in a better financial situation as we progress with properties.

You are right, everyone my age wants to rush into things. I am so excited about property that this sometimes gets the better of me but I am learning to settle down and not let emotions get in the way! I have been taking my time reading books, and trying to learn as much as possible to prepare myself for the right time!

Your stats are impressive and if I could reach what you have, I would be extremely proud and happy!

10 properties by 2016 is just something I want to aim for, I realise it might be an impossible target for me to reach but it's something for me to aim for!
 
The problem I am seeing at the moment is finding properties that are going to give me a rental yeild of over 5%. I have a few suburbs in mind that I want to move onto with my next IP but yeilds are around the same, 5-5.5%. Do I just keep looking, searching for a bargain price in these areas?

Either that or change your suburb selection. There are quite a few of them that have yields over 6% & 7% for instance.
 
Do you usually just search and search until you find rental yeilds of 6-7%? I like to flick to the back of API magazine and look into the stats, then I continue with a search online in those particular areas with good figures. I probably shouldn't be relying on the API stats so much should i?
 
thanks Propertunity that sites look really interesting!

I know that this question diverts from the subject here, but do you ever worry about what kind of tenants you would be attracting if you purchase in some areas? i don't mean to discriminate and i am mainly asking this question because of comments that have heard made by others time and time again. i am fairly new to Sydney myslef and cannot judge.
 
thanks Propertunity that sites look really interesting!
You're welcome ;)

I know that this question diverts from the subject here, but do you ever worry about what kind of tenants you would be attracting if you purchase in some areas?
Yes & No. Yes I worry and then No I don't worry because we select good Property Managers to do tenant selection. PM's hate going to Tribunal so it is in their best interstes to put good tenants in your property. PMs hate chasing late rent payments.

i don't mean to discriminate and i am mainly asking this question because of comments that have heard made by others time and time again. i am fairly new to Sydney myslef and cannot judge.
You just have to take people as people I think. You check their credit history, rental references, employment etc. There a dodgy rich people, there are dodgy poor people. A rich person that loses their job today and can't find another job within 3 months can turn bad - as can a poor person. In many respects poor people on welfare could be seen as having a steady income stream (government benefits). They also can be very house proud and treat the place better than you or I would.
 
Thanks for your opinion. I think you’re right though but having no experience yet its hard to look at it from all angles! But it sure makes sense.

much appreciated! :)
 
The more and more I research, the more and more I come back to Newcastle and places like Mayfield and Adamstown. My partner thinks it's a bad idea because the area's are "too far away for us to manage".

So confusing trying to research different areas and coming up with an idea of where to buy...even gets a bit frustrating!

Considering using a property manager to get our first IP....:rolleyes:
 
Invest in your future

Invest in your future and marry Melissa this year. She is now and will grow in to a major asset on your balance sheet in the future:)

Congratulations Melissa. We look forward to your postings!

I can highly recommend Bella Champagne to celebrate. I am not a bubbly drinker usually but this is a treat!
 
It will be great when i propose to Mel. I cannot wait, and she will be an asset and always has been. I'm just so thankful that she also wants to invest in property! No need to convince her otherwise!
Funny that you mention bella, its her favourite drink!
 
I'm starting to think about buying in area's where property values are around the 100k mark. Using this to get us into the market, with some low value / low risk investments? Places like up towards Mudgee and so on.

Bad idea?
 
my step uncle told me once ,

you must have a dream.
so you can build a plan ,
because without the plan you can not, have the dream!

if your dream is VERY LARGE , you simly place a VERY LARGE plan next to it?

easy pezy japenezy,:D
 
Do you usually just search and search until you find rental yeilds of 6-7%?
They're out there, they're often tenanted, and a lot of the time they aren't advertised as having X yield. I hit one the other day in Snowtown - 4br house, massive stone and brick thing, $140k, has a tenant in. Given a 2br house in Snowtown rents for $160pw you'd hope this one is going for more. That would be a good start, and the house has horrific dated decor that if it was redone it would be worth near $200k. There was no mention at all of the tenant, the agent accidentally let it slip in passing that someone was living there.

There is also a $180k house rented for $200pw here, and the one I am after is $100k rented at $140pw but the agent must have noticed I was keen because its not on the internet anymore ... but we want that one to live in, it is the only 4br house within a few 100km of here that is actually affordable. My own house was appraised at $200pw and is also a $180k house ($180k is the median here, most of the older houses sell close to that mark), and my old one I'd happily sell for $75k and it has tenants in at $110pw. There's one in the next street listed at $240k and would rent for $280pw.

That's several right there around 6-7%, spread out over a number of towns north of Adelaide. You can probably find some closer to you.
 
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