Living off Equity

[DebtEquity]

Landlubber great to see someone with a positive note. Also good to see someone actually undertaking the strategy. Do you use spreadsheets to monitor your expenses etc. How do you approach the bank if you need more money without a working income in this current environment.

I am still a long way from it but am very interested in doing it safely and slowly if possible.

 

[landlubber]

Everything (i.e. everything) is on XL spreadsheets. One for monitor total situation. Two for tax returns. Three to present to bank as necessary. Review of facility by bank is "same as always". Value all IPs, apply LVR (mostly 80%, some 60%)& establish facility limit. Then, we "horse trade" some of the total $$ facility limit which is put on term deposit as extra security for the bank. Last time we did this they wanted about 4.1% of the facility put on TD.
LL

 

[BLKS2K]

Hi there,

im fairly new to this forum and have been doing some research on purchasing a cash bond for servicing purposes.

I have well and truly hit the DSR wall and am always looking for ways to keep purchasing. Cash bonds look to be a good option if you have spare cash. I currently have the cash for a deposit as well as a bond etc.

My questions is: Which banks accept a cash bond for servicing? is this widely accepted? or only accepted by specialist lenders?

Last thing id want is to quit my job, get the cash bond and then the lender saying your too heavily reliant on the cash bond income.

Any feedback would be greatly appreciated

Rob

 

[Rixter]

Rob you may like to read this thread here for answers & further info.

 

[Peter_Tersteeg]

My questions is: Which banks accept a cash bond for servicing? is this widely accepted? or only accepted by specialist lenders?

Last thing id want is to quit my job, get the cash bond and then the lender saying your too heavily reliant on the cash bond income.

Westpac have accepted cash bonds. It's often on a case by case basis.

There is a massive risk of the lender refusing further finance on this basis. I've seen a few people achieve success with this type of strategy. I've also seen a lot of people get into serious financial trouble trying to implement a LOE strategy.

 

[oc1]

I've also seen a lot of people get into serious financial trouble trying to implement a LOE strategy.

It really depends on how much they rely on LOG (Living off Growth) rather than LOE. Many confuse both.

 

[D.T.]

Hi there,

im fairly new to this forum and have been doing some research on purchasing a cash bond for servicing purposes.

I have well and truly hit the DSR wall and am always looking for ways to keep purchasing. Cash bonds look to be a good option if you have spare cash. I currently have the cash for a deposit as well as a bond etc.

My questions is: Which banks accept a cash bond for servicing? is this widely accepted? or only accepted by specialist lenders?

Last thing id want is to quit my job, get the cash bond and then the lender saying your too heavily reliant on the cash bond income.

Any feedback would be greatly appreciated

Rob

I find it incredibly hard to believe that you (or most people) could hit DSR wall. I'm on a meager income at the moment and DSR seems endless based on choosing lenders in the right order and choosing properties which don't cost too much to hold.

 

[Richard Feynman]

I find it incredibly hard to believe that you (or most people) could hit DSR wall. I'm on a meager income at the moment and DSR seems endless based on choosing lenders in the right order and choosing properties which don't cost too much to hold.

I think it might be worth re-phrasing this as your post itself states how easily easily someone can hit a wall (by making certain choices in lender order and asset purchases).

 

[D.T.]

I think it might be worth re-phrasing this as your post itself states how easily easily someone can hit a wall (by making certain choices in lender order and asset purchases).

That's sorta my point - think about what you're doing and dont just buy stuff because it sounds cool or use pot luck. Have a deliberate purpose / direction.

 

[Richard Feynman]

That's sorta my point - think about what you're doing and dont just buy stuff because it sounds cool or use pot luck. Have a deliberate purpose / direction.

I totally get your point -- it's silly not to have a plan and clear purpose/direction but not everyone will have a the same plan (to purchase investment properties ad infinitum).

 

[D.T.]

I totally get your point -- it's silly not to have a plan and clear purpose/direction but not everyone will have a the same plan (to purchase investment properties ad infinitum).

Everyones goals are different, but serviceability in it's current state should not be the limiting factor. IE never need to erode your wealth on cashbonds

 

[Rixter]

It really depends on how much they rely on LOG (Living of Growth) rather than LOE. Many confuse both.

I think you've hit the nail on the head.

Can you provide an example of each to differentiate your definition of the two for people?

 

[oc1]

I think you've hit the nail on the head.

Can you provide an example of each to differentiate your definition of the two for people?

No, not really. Self explanatory.

 

[Rixter]

No, not really. Self explanatory.

Are you meaning :

LOG - Living of Growth that being, relying on growth that has not materialised as yet.

LOE - Living of Equity being growth that has already materialised and secured as available funds.