My Story

[JIT]

Hiya Nathan,

Thanks for sharing your fascinating story with us.

I am a bit confused re. this below:

I am negatived geared now for my properties around $800pw inc all council strats repairs PM fees, everything.

Are you saying that you are negatively geared to the tune of $800 per week, and is this a before tax amount?

So like, 800 X 52 = $41600 per annum negatively geared, before tax?

I must surely have this wrong, as you said that you are buying close to cash flow neutral/cash flow positive I think, and mainly in Western Sydney?

Also one more thing, you mentioned that cars are tax deductible? I didn't know this?! Do you run your own business?

Thanks heaps for the clarification.

 

[Nathan]

Well done Nathan, you've done very well and i predict you will easily retire by 30 the way you are going

.

With all the moving of threads going on, i motion that a moderator move this to the "interviews" forum as it's in the same spirit as the other threads in there. Nathan, i have a couple of questions.

how do you determine if a property is 20% under valued? Is this based on comparable sales or based on the yield?

Based on comparable sales.

excellent to see that you have a good income to cover the $40k shortfall a year and still have left over for paying cash for stuff like new cars.

Tax is pretty non existant, and the cars are pure dollars and cents, why pay 3k in repairs and bills, when you can pay an extra roughly 4k and get a new 1.

what sort of rental income and LVR do you want to achieve before 'retiring'?

I expect to have and income stream around $2k per week, which would be around 1200 pw todays dollar.

LVR irrelevant lower the better.

 

[Nathan]

Hiya Nathan,

Thanks for sharing your fascinating story with us.

I am a bit confused re. this below:



Are you saying that you are negatively geared to the tune of $800 per week, and is this a before tax amount?

So like, 800 X 52 = $41600 per annum negatively geared, before tax?

Before tax, 1 have a few crowns in the jewel which cost me around $200pw to hold. some are CF+ now, and most are around $50pw including all out of pocket expenses.

with the $41600 (rough) actually $684pw now so $35568 - say 30% tax (rough) = $25k or $500pw after tax.

geez, thats lot better then last look @ this.

Also these tax figures are just envelope talk not including depreciation etc, i dont worry bout tax because i know i have enough expenses to cover this.

I must surely have this wrong, as you said that you are buying close to cash flow neutral/cash flow positive I think, and mainly in Western Sydney?

Also one more thing, you mention cars are tax deductible? I didn't know this?!
Do you run your own business?

Yes they are tax deducable to the tune of 90% from memory, as i get a proportion of my wage as car allowance.

Thanks heaps for the clarification.

Cheers,
Nath.

 

[charttv]

nate,

You are a champion mate! Keep it up. I thought you presented well on that TV show too, you seem mature beyond your years.

 

[Jodie701]

You will succeed without a doubt. When you put your whole heart and soul into it, it'll be hard not too!

 

[hobo-jo]

Thanks for sharing your story Nathan, it's appreciated

If there is anyother questions you may have feel free to ask im pretty open person.

You did say any other question ...

Do you have any kind of exit strategy or consolidation plan for if times get tough over the grim looking short term?

It would seem that many of your properties by themselves have reasonable cashflow (ie. close to neutral), but as a whole $35,000-$40,000 negative cashflow is a huge burden to carry if things get tough (especially for 1 person). I would assume being only 5 years out of high school with such a successful career and house portfolio that you didn't go to University and so don't have a degree behind you (if you managed to somehow fit this in as well I would be in complete awe ). What happens for example if you find your $80k-$100k salary suddenly becomes a $50-$60k salary? If we hit a bad recession or even depression it might not be so easy to pickup that second fulltime job to tide you over.

Sorry I'm not looking to derail the thread with d&g rubbish, but am interested to know what safety measures you have in place if things turn sour.

 

[kissfan]

For my previous purchases i belived pay down debt, and have cash for deposits, if i did that i wouldnt have got to where i am, is just be paying off my first.

Now the house that was bought in 1970, would rent for $20k+ pa and the purchase price was $13k if that cost nothing to hold then and they bout 10 of them theyd be earning $4k per week, and have the whole portfolio paid off within 6 months. Property without debt doesnt appear as good investment.

Hi Nathan.

Once again, well done mate.

Just after clarification on your views re debt.

Do you think you will (at some stage) reduce debt? Perhaps when you have reached a goal in regards to a certain figure (to live off) or do you intend to carry the debt with the portfolio.

Regards
Marty

P.S. I think the marble trick would get a lot of views on youtube

 

[Nathan]

Thanks for sharing your story Nathan, it's appreciated



You did say any other question ...

Do you have any kind of exit strategy or consolidation plan for if times get tough over the grim looking short term?

It would seem that many of your properties by themselves have reasonable cashflow (ie. close to neutral), but as a whole $35,000-$40,000 negative cashflow is a huge burden to carry if things get tough (especially for 1 person). I would assume being only 5 years out of high school with such a successful career and house portfolio that you didn't go to University and so don't have a degree behind you (if you managed to somehow fit this in as well I would be in complete awe ). What happens for example if you find your $80k-$100k salary suddenly becomes a $50-$60k salary? If we hit a bad recession or even depression it might not be so easy to pickup that second fulltime job to tide you over.

Sorry I'm not looking to derail the thread with d&g rubbish, but am interested to know what safety measures you have in place if things turn sour.

Hey there, yeah i constantly question this. i have a few options, i could sell some shares and service the debt for a period of time, i will soon have an availible LOC to ride down as a buffer which would get me through 1 year of no work... and worse case i coul get second job, or i could sell my car, or absolute worse worse case sell some property and lower LVRs...

As i stated i onnly buy under market value, so i have cash in the deals and if i sell i can recoup my entry and exit costs if nothing else.

 

[Nathan]

Hi Nathan.

Once again, well done mate.

Just after clarification on your views re debt.

Do you think you will (at some stage) reduce debt? Perhaps when you have reached a goal in regards to a certain figure (to live off) or do you intend to carry the debt with the portfolio.

Regards
Marty

P.S. I think the marble trick would get a lot of views on youtube

Yeh i will reduce at one point, when i feel the time is right i may sell down, but i need to be holding more then i do now.

my goal is to hold unencumberd property, however that takes a lot.... i guess if we work with this analogy to get me out of the workforce, say a property rents 200pw and cost 300pw all up to hold, it costs $100pw to hold.. if rent hits 300pw, it costs nothing, if rent hits 400pw u get $100pw. i plan to have min 10 of these doing this as the first leg of my goal, + other ventrues working in my fvour + interest rates coming down etc, all support my case..

 

[stumunro]

Yeh i will reduce at one point, when i feel the time is right i may sell down, but i need to be holding more then i do now.

my goal is to hold unencumberd property, however that takes a lot.... i guess if we work with this analogy to get me out of the workforce, say a property rents 200pw and cost 300pw all up to hold, it costs $100pw to hold.. if rent hits 300pw, it costs nothing, if rent hits 400pw u get $100pw. i plan to have min 10 of these doing this as the first leg of my goal, + other ventrues working in my fvour + interest rates coming down etc, all support my case..

come to the dark side my friend.. you know LOE is the way to riches ")

 

[Rob Williams]

come to the dark side my friend.. you know LOE is the way to riches ")

It's not THAT dark, either

 

[mystery]

.... After reading your story I feel much more energised, motivated and inspired. Well done ..... you are an inspiration to all ages.

Martin

 

[Mooze]

Way to go Nathan. Wish I had my head screwed on that well at that age!

Best of luck moving forward with it, no doubt you will achieve your goals.

 

[redwing]

Do i pay with LOE or cash and how do i fund new purchases? I use cash for everything, i am very uncomfortable with LOE. Cheers,
Nath.

Great thread Nathan, congratulations on your efforts to date, wish I had my act together that well at your age as well

Re: the above quote, do you mean LOC (Line Of Credit) or LOE (Living Off Equity)

 

[Nathan]

Thanks Red,

Nah dont use either LOC or LOE...

Just draw down like a top up loan occasionally to fund new IP's.

 

[steveadl]

On ya Nathan, keep it up! Sorry, can't give you anymore kudos yet.

 

[josko]

Hi Nathan,

More praise to you! Loved your story, I hope to meet you at the Sydney meetings some day.

Regards Jo

 

[fatboy4]

Great stuff Nathan and thanks for sharing.

It is truly motivating to hear people's stories and strategies.

(We are having a similar experience with a private bank. If you could PM the broker I'd appreciate it)

 

[Wishlist]

What I liked best about your story is that you have been prepared to live conservatively in order to achieve what you want. It shows a strength of character that isn't so common amongst a generation who have had it relatively easy. Maybe you could tell your story to upper grades in highschool to inspire them and to begin your path as an educator.
Wishllist

 

[skater]

Nathan, you are doing a great job. Keep up the good work.