Portfolio structure

[chicken madras]

Hi

I am trying to tap into all of your experience to make an informed decision on the long term structure. I don't think there is an exact answer, however.

i have a certain amount of cash and I understand that a long term balance of pos and neg is best. Pos coming from regional and neg coming from city. Both with different capital growth.

What should come first:

2 neg geared inner city investments with good growth and the ability to lend more based on the growth in years to come.

Or

3 pos geared units making it more difficult to borrow as no cash to put down as tied up in units, however bigger long term income and larger loans to go with that.

So as investments start to mature what offers the best long term with the intention of getting a combination of 5-10 investments




Thanks

 

[Lofty]

Hi CM

We started with a couple of positively geared properties but they were in a metropolitan area, i.e. not Regional. We purchased "standard" family homes and on-sold them with vendor finance. This allowed us to fix our positive cash flow and to also fix our capital gain, with the expectation that the people we on-sold to would refinance with a traditiional lender in two to four years.

On average, as each property refinanced into a traditional home loan, we gained enough profit to do a couple more of the same. However often we'd buy one of each, i.e. one for on-selling with vendor finance and one buy and hold.

Our situation now is that we have sufficient cash flow positive properties to support our lifestyle and our buy and holds.

For us, the ability to operate this strategy in a metropolitan area was a real bonus.

Cheers, Paul

 

[JAGuiD]

Hi Paul,

I'm really interested in your strategy. Im new to the forum and am also in the process of starting my portfolio.

Could you give a more detailed example of how you used vendor financing in your strategy?

Much appreciated.

 

[Lofty]

Hi Jag

Happy to. If you go to http://www.jvpropertypartners.com.au please click on the "Contact" page. If you send me your email address from that page, I'll send you a printout of the excel sheet for the last transaction we did, containing the "numbers" for that property. I'll also send you an explanation of the sheet.

It's a bit too long to post here and hopefullly we'll beat the spam bots ;-)

Cheers, Paul

 

[JAGuiD]

Hey Paul.

Thanks for your reply! Ive gone to the link you supplied and entered my details.

Cheers

JAG