More questions than answers

I went to a property seminar about buying a coach to allow for investing. Mainly to support a mate of mine who likes going to them to learn. I hear all the time about how someone has bought 10 properties in 10 months who is a single mother. My main question that seemed to not get answered is the costs that come with these properties. I bought a IP in Sydney last year and used 45k of my savings. I want to buy another IP but I dont have enough savings to pay the deposit. Can it be done without a cash savings? Is it done by loaning the whole amount and using this as a deposit? I just dont know how the 10 in 10 months is viable. Can anyone shed any light on this?
 
Welcome,

The 10 in 10 months answer is depends..
Perhaps the single mother won a lottery
Perhaps the single mother have a huge equity
Perhaps the single mother got huge amount of money inherited etc..
So many hidden factors involve, but since the people like this marketing jargon, that's why this become a norm.


Moving on to your question, yes it can be done with cash savings. Its called equity..
Can you provide us more details about your number :
1. How much - estimate value of your property?
2. Loan
3. Positive/Negative cashflow
4. LVR
5. Saving, salary, families, etc..

Information like that will help Mortgage broker identify and work out :
1. How much you can borrow (equity)
2. if you afford to purchase next property..
 
Maybe she had a PPOR with equity.

Buy one using the equity as a deposit.

Buy another by using more equity from PPOR or buy a property under market value and/or add equity by reno etc. Get it revalued and get your deposit back to use for the next one.

If you've done a reno not only has your equity increased but your yield has also meaning you are not out of pocket any more than before that purchase and you have your equity back.

Rinse and repeat.:D
 
I went to a property seminar about buying a coach to allow for investing. Mainly to support a mate of mine who likes going to them to learn. I hear all the time about how someone has bought 10 properties in 10 months who is a single mother. My main question that seemed to not get answered is the costs that come with these properties. I bought a IP in Sydney last year and used 45k of my savings. I want to buy another IP but I dont have enough savings to pay the deposit. Can it be done without a cash savings? Is it done by loaning the whole amount and using this as a deposit? I just dont know how the 10 in 10 months is viable. Can anyone shed any light on this?

10 in 10 months is very right in my opinion. For me it took me 2 and a half months for 2 IP and that was full on hunting. I'm still a newbie though :)
 
I have clients with 10 IP's but not purchased in 10 months, more like 5 years or longer and none are single mums.

You need 2 basic things before you can build a property portfolio, savings and/or equity to fund the minimum settlement funds needed and to be able to show the income for servicing of debt.

If you buy very well and structure your finances well, it may be possible.
Most would need to release equity in their own home first to cover the funds needed to settle on the subsequent purchases. You may then consider what type of IP's to buy, it may be lower cost IP's in regional towns or look at lower stamp duty IP's (off the plan in Vic perhaps) and higher loan to value ratio (LVR) loans with selected lenders in order of lowest serviceability first.

You may need to structure your purchases also based on rent yield to cover the issue of servicing unless you have high incomes. Manufactured growth (renovations etc) are a way to increase rent yield and value but it takes time and money.

My personal view is that 10 in 10 months is not feasible for most, to be able to do due diligence, arrange finance and the settlement, getting tenants etc. I have also been to the sales companies that promote their ability to do this, mostly I take away some bits of information I may not have heard before and then steer clear of them after that.

Why put yourself under the pressure to do this?
 
ask yourself another question or 2. why are these plans promoted and who benefits? if it sounds too good to be true... you know the rest. agree why put yourself in that much pressure? it does not need to happen in a short time frame.
these things are often marketed to novices for a good reason. take care.
 
I hear all the time about how someone has bought 10 properties in 10 months who is a single mother. ... I just dont know how the 10 in 10 months is viable.

Single mothers are lucky if they have a property in which they and their children can live. I wouldn't believe everything you hear. For someone starting out, 10 in 10 months is not doable and, if it is, it's stupid. Slow and steady wins the race.
 
The 10 in 10 months answer is depends..
Perhaps the single mother won a lottery
Perhaps the single mother have a huge equity
Perhaps the single mother got huge amount of money inherited etc.....

Perhaps the mother is single now because she had a massive divorce settlement
Perhaps the single mother earns a 7 figure income
The list goes on.......

The Y-man
 
I went to a property seminar about buying a coach to allow for investing. Mainly to support a mate of mine who likes going to them to learn. I hear all the time about how someone has bought 10 properties in 10 months who is a single mother. My main question that seemed to not get answered is the costs that come with these properties. I bought a IP in Sydney last year and used 45k of my savings. I want to buy another IP but I dont have enough savings to pay the deposit. Can it be done without a cash savings? Is it done by loaning the whole amount and using this as a deposit? I just dont know how the 10 in 10 months is viable. Can anyone shed any light on this?

Welcome Chrisoooo,

As others have mentioned, they're not telling you something!

Generally property is purchased via cash or via borrowing against existing equity.

The 10 in 10 is basically a marketing tool to get people listning and engaged. It can be done sure, but its not possible without equity/large cash reserves/windfalls/etc.

If your goal is to build a large portfolio, planning is pretty important. As Greg mentioned, if you dont structure things correctly, you might hit your 'borrowing wall' sooner rather than later.

In terms of education, get your mate on the forums - best place to learn and less marketing spin!

Cheers,
Redom
 
Thank you for your responses. I understand the marketing ploy used to get business so I am not a sucker and didn't and will not join. I use this forum all the time and bought my IP in Granville from reading and researching on here and elsewhere.

I am saving at the moment for my next IP but I guess the main question from this is how to buy another property with little cash. Was it possible to use the banks money to buy again. It has been answered with the discussion of equity. I thought this was the case but wanted to clarify. My next step will be discussing my ideas with a mortgage broker. I want to buy in Central Coast next and looking at house near beach. Main areas I am looking are from Wamberal to Kilcare and in between. Anyone have any suggestions on this area. I am going to post in the Where to Buy section so please feel free to answer in there.

I completely agree with the structure of loans and portfolio. My aim in 5 IP's in 10 years. A lot less than the "10 in 10 months" but I am happy with this.
 
Thank you for your responses. I understand the marketing ploy used to get business so I am not a sucker and didn't and will not join. I use this forum all the time and bought my IP in Granville from reading and researching on here and elsewhere.

I am saving at the moment for my next IP but I guess the main question from this is how to buy another property with little cash. Was it possible to use the banks money to buy again. It has been answered with the discussion of equity. I thought this was the case but wanted to clarify. My next step will be discussing my ideas with a mortgage broker. I want to buy in Central Coast next and looking at house near beach. Main areas I am looking are from Wamberal to Kilcare and in between. Anyone have any suggestions on this area. I am going to post in the Where to Buy section so please feel free to answer in there.

I completely agree with the structure of loans and portfolio. My aim in 5 IP's in 10 years. A lot less than the "10 in 10 months" but I am happy with this.

5 IP's in the next 10 years will put you in the very top group of property investors in the country Chrisooo - its definitely an achievement worth celebrating!

Regarding your finances - get a valuation done on your Granville property if you haven't already done so - may do you wonders.

Quite a few clients of mine have made over 100k in equity gains in Sydney over a 12-24 month period.

If a good number comes out for you, you can take out the equity and then use it to fund more purchases.

The experienced investor often says 'one of my mistakes was buying property with cash' - partly because the 'cash' part isn't deductible, while the financed part (borrowed equity) is.


There's quite a few Central Coast experts on the forums - best to talk to them (knightM I think is one)

Good luck!
 
Some of what is mentioned appears to be core things an investor should know of. Is there a FAQ or any other educational material/books out there that would be recommended reading.

I am pretty much in the same situation, though mine is more of a 5 properties in 5 years scenario using sort of the details you mentioned here.

I have clients with 10 IP's but not purchased in 10 months, more like 5 years or longer and none are single mums.

You need 2 basic things before you can build a property portfolio, savings and/or equity to fund the minimum settlement funds needed and to be able to show the income for servicing of debt.

If you buy very well and structure your finances well, it may be possible.
Most would need to release equity in their own home first to cover the funds needed to settle on the subsequent purchases. You may then consider what type of IP's to buy, it may be lower cost IP's in regional towns or look at lower stamp duty IP's (off the plan in Vic perhaps) and higher loan to value ratio (LVR) loans with selected lenders in order of lowest serviceability first.

You may need to structure your purchases also based on rent yield to cover the issue of servicing unless you have high incomes. Manufactured growth (renovations etc) are a way to increase rent yield and value but it takes time and money.

My personal view is that 10 in 10 months is not feasible for most, to be able to do due diligence, arrange finance and the settlement, getting tenants etc. I have also been to the sales companies that promote their ability to do this, mostly I take away some bits of information I may not have heard before and then steer clear of them after that.

Why put yourself under the pressure to do this?
 
I went to a property seminar about buying a coach to allow for investing. Mainly to support a mate of mine who likes going to them to learn.

When property seminars like these start springing up, its a pretty good signal the top of the market has been reached and its time to sell rather than buy.
 
I completely agree with the structure of loans and portfolio. My aim in 5 IP's in 10 years. A lot less than the "10 in 10 months" but I am happy with this.

You will probably fin d that will change.

I had one negatively geared property in 2008 when I went to a meeting and decided (after seeing young people buying multiple properties) that I needed to get serious).
I had equity in my PPOR and decided to buy one a year for the next 10 years, then sell half and retire).

Well that didn't happen. I bought 1 the first year, 2 the second year 2 the third year, 3 the fourth. I could have bought more but we were buying run down properties and renovating. My husband kept telling me I was going crazy. He's not so quick with the name calling now that he's retired.;)

It gets addictive once you start. :D

And you can buy multiple properties if you have the equity (either already or manufactured). But I agree not as a newby by yourself. You need time to learn and to gain confidence. You need guidance. So for some paying for a service can be of benefit.
 
I went to a property seminar about buying a coach to allow for investing. Mainly to support a mate of mine who likes going to them to learn. I hear all the time about how someone has bought 10 properties in 10 months who is a single mother. My main question that seemed to not get answered is the costs that come with these properties. I bought a IP in Sydney last year and used 45k of my savings. I want to buy another IP but I dont have enough savings to pay the deposit. Can it be done without a cash savings? Is it done by loaning the whole amount and using this as a deposit? I just dont know how the 10 in 10 months is viable. Can anyone shed any light on this?

Hi Chris,

I think most of the posts have answered your questions. Can I just add that I personally highly recommend you buy some books to increase your basic knowledge of investing. It will hold you in good form for all your future dealings.

IMHO this forum is a fantastic resource to ask questions and get ideas, contacts etc, but if you had a good solid foundation first under your belt and then also used the forum, it would be so much more beneficial to you. Especially if your very serious about your property investment goals.

Cheers

leo
 
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