Someone help!

[perthguy]

Just a quick update ive now saved 220k and i have been talking to lots of different people about different strategies. one guy who is also my age gave the advice of be in as much debt as possible at as young as possible while you can manage it because it wont get easier and for tax reasons. He went on to say he was in 1.2mill of debt with three houses and if anything happened he could just sell up. Scary i thought but then he said "you have to risk it to get the biscuit" lol.

Another said Pay of your Ips and get them positively geared. Another person said go Interest only with offset accounts and use the banks money not your own to fund your IPs. So everyone has there own different view. Im now ready to talk to Professional people but unsure in what order and who actually. I no i need banks, broker, accountant, financial planner real estate agents. My question is who would be the best person to talk to first about planning a strategy?? I know i need a whole team of the people mentioned i just want to no who you experienced guys would talk to first. Thanks

I didn't start investing in property until later in life but I have done ok. Debt feaks me out though so I have been buying property with an investment partner. From my first investment property, I never have known exactly how much debt I have been in. If I don't know, it can freak me out, right?

I look at how much the repayments will be, how much the rent will cover the repayments, what is the shortfall, can I cover the shortfall? If interest rates go up 2 or 3%, can I cover the shortfall? If the property is empty and interest rates go up, can I cover the shortfall? What contigency do I have in place to cover any problems? If I am comfortable with the answers to those questions, I don't worry about getting into debt.

If you read about different strategies, the point is not to pick the "right" strategy, it's about understanding how the strategy works and the advantages and disadvantages of that strategy. For example, someone might suggest interest only. Another person might suggest offset accounts. However, most banks won't let you offset against a fixed interest rate loan. You would need to understand that. Understand how the strategies work and then pick something that might work for you. When you talk to professionals at least you will have some idea of what to ask and some understanding of what they are telling you.

You have done well, keep reading, keep asking questions and get professional advice. How you structure your investment property loans and the way you purchase them (as an individual, in a company, in a trust etc) can have major tax consequences down the track. This could cost many thousands of dollars if you get it wrong, so it's good to understand the implications up front.

 

[trey]

im a listener. i liked to hear others peoples stories from people of all ages. where they went wrong, where they went right and what advice they have from me. That is where i make decisions from.

 

[Peter 14.7]

260k saved. still thinking of what to do. Thinking hard

Trey, you are in very good position.

I sense fear. Which is wise.

Don't get as much debt as possible. You ability to pay that is job related and all jobs can go, not saying it will but all can.

Buying a IP have merits but you need goo capital gain not cash-flow as much at this stage.

My god, where do I start:

Best to say there is opportunity all the time! No need to rush.
Learn here and don't tell many you have so much money as they will dupe you. And don't buy new off the plan.

Buy as best to the inner city in Sydney as you can afford. Terrace maybe. No land, not developments, buy and rent it out safe and secure.

I did my my first at 22 and now have many IP and PPOR I own since 2003. Made some mistakes, made more great buys, overall, miles ahead.

Peter 14.7

 

[perthguy]

im a listener. i liked to hear others peoples stories from people of all ages. where they went wrong, where they went right and what advice they have from me. That is where i make decisions from.

I found out recently that I did something wrong. I bought a development site in Melbourne 50/50 with my investment partner. Now we want to build 2 units on it and at the end my investment partner would own unit 1 and I would own unit 2. It turns out that it's not that simple and we would have to pay capital gains tax to do this now. If we had bought the land in a bare trust then capital gains tax would not be payable now. (disclaimer: I think there would also need to be a partition agreement for this to work). Anyway, it's not a big deal. We will just build the two units and own half each of each one.

 

[Peter 14.7]

im a listener. i liked to hear others peoples stories from people of all ages. where they went wrong, where they went right and what advice they have from me. That is where i make decisions from.

Don't buy off the plan.
Don't do you own developments or go in with others in developments.
Have good landlord insurance.
Don't trust so called experts
If the don't have multiple IPS ignore their advice, it is was any good , they should have multiple IPS.
Always use a managing agent.
Apartments are ok but check body corp fees etc..
Houses are best.
Bargains come up all the time, no need to rush.
Apartment pools, gyms, etc cost money to run and you never use them.
Carparks in Sydney are gold, one site ones are essential with meter apartments.


First Property: Buy to suit you as a home, that is you could live there. Then live in it 12 months, then if you want, rent out. You then get 6 years capital gain tax free growth.

By one in the area you want to live, size to suit you, consider future needs, best for two bed min. before you know it you may have girlfriend move in.

Even is process stay flat or go down in year or two, in Sydney inner, they will always go up overall. Why? Becasue trades like you are earning $3k or more a week in 2014 when in 1993 they made $1k a week. That why prices go up: more income to spend, less homes to buy.

If you get a partner, male or female, have pre-nuptial agreement at the start before they move in . Why? , after 2 years, you break up and they can claim half of what you have got. May not happen, yes, but it may. 33% of all first marriages fail and 100% of them didn't expect them too when they got married or coupled up. Defacto is after 2 years in most cases so treat that as marriage.

A start, Peter 14.7

 

[Peter 14.7]

I found out recently that I did something wrong. I bought a development site in Melbourne 50/50 with my investment partner. Now we want to build 2 units on it and at the end my investment partner would own unit 1 and I would own unit 2. It turns out that it's not that simple and we would have to pay capital gains tax to do this now. If we had bought the land in a bare trust then capital gains tax would not be payable now. (disclaimer: I think there would also need to be a partition agreement for this to work). Anyway, it's not a big deal. We will just build the two units and own half each of each one.

Example why development is complex, even when you get it right, at the early stages of investing.

Peter

 

[trey]

Don't buy off the plan.
Don't do you own developments or go in with others in developments.
Have good landlord insurance.
Don't trust so called experts
If the don't have multiple IPS ignore their advice, it is was any good , they should have multiple IPS.
Always use a managing agent.
Apartments are ok but check body corp fees etc..
Houses are best.
Bargains come up all the time, no need to rush.
Apartment pools, gyms, etc cost money to run and you never use them.
Carparks in Sydney are gold, one site ones are essential with meter apartments.


First Property: Buy to suit you as a home, that is you could live there. Then live in it 12 months, then if you want, rent out. You then get 6 years capital gain tax free growth.

By one in the area you want to live, size to suit you, consider future needs, best for two bed min. before you know it you may have girlfriend move in.

Even is process stay flat or go down in year or two, in Sydney inner, they will always go up overall. Why? Becasue trades like you are earning $3k or more a week in 2014 when in 1993 they made $1k a week. That why prices go up: more income to spend, less homes to buy.

If you get a partner, male or female, have pre-nuptial agreement at the start before they move in . Why? , after 2 years, you break up and they can claim half of what you have got. May not happen, yes, but it may. 33% of all first marriages fail and 100% of them didn't expect them too when they got married or coupled up. Defacto is after 2 years in most cases so treat that as marriage.

A start, Peter 14.7

very good advice thanks Peter! Yeah i work with some older guys who have told me about that special day when a girl comes along

 

[trey]

Trey, you are in very good position.

I sense fear. Which is wise.

Don't get as much debt as possible. You ability to pay that is job related and all jobs can go, not saying it will but all can.

Buying a IP have merits but you need goo capital gain not cash-flow as much at this stage.

My god, where do I start:

Best to say there is opportunity all the time! No need to rush.
Learn here and don't tell many you have so much money as they will dupe you. And don't buy new off the plan.


Buy as best to the inner city in Sydney as you can afford. Terrace maybe. No land, not developments, buy and rent it out safe and secure.

I did my my first at 22 and now have many IP and PPOR I own since 2003. Made some mistakes, made more great buys, overall, miles ahead.

Peter 14.7

yes i am fearful, i want to get it right from the start. Thanks for your input

 

[redwing]

260k saved. still thinking of what to do. Thinking hard

Hi Trey

You need to get your money working for yoy, rather than viccy-versa

Here's an older but hopefully pertinent post

An interesting acronym for FEAR That I?m sure many have come across is False Expectations Appearing Real

We?ve found that building the portfolio has been a massive emotional change as well as financial, personal development and self-study has been a large part of the process over the years. Maybe this is due to the fact that we didn?t receive any edumication about financial intelligence in our schooling years (though I didn?t make it to uni?.do things change once there?).

FEAR over the years has been overcome with education and mixing with like minded individuals and is soon replaced with excitement.

I well recall the sleepless nights of investing and still like to think about a big decision overnight in many cases, clarity can sometimes be found in rest (and good wine?).

We?ve found the following..warning long post

Your Property will rent out
-Sometimes you have to adjust your perception of the market
-You may have to drop the rent to meet the market

Interest Rates will go up
-And down (it?s the Circle of Life, Simba)

Everyone has an opinion on the Market
-but no one has a crystal ball
-Remember Economics is the only field in which two people can get a Nobel Prize for saying exactly the opposite thing.

You Must Manage the Property Managers
-A good Property Manager is worth their weight, they are evasive beasties though and best captured on moonlit nights at midnight, in the fields behind the dark forest
-As well as being evasive beasties a good Property Managers may spoil you -Keep in regular contact with your Property Managers and monitor your portfolio

Prices will Flatline and can even Head South
-Can you hold until a recovery is underway
-There are Markets within Markets
-And cycles within cycles

You will find a better, cheaper Property a day/week/month after your purchase
-Just as you buy a Holden Captiva and then they release the Holden 60 year addition with free extras very shortly thereafter (nope? Just me then)

Take Action
-You need to be ?in the market?
-Take time to pause-reflect-readjust

Be a Contrarian
-Like the rest of us ;o)

Everyone is a salesperson
-The developer, the banker, the broker, the property manager, the insurance guy, the lawyer, the cleaners, the gardener, the guy who installed your garage door and the government all love it when you buy
-I love this quote ?a good financial planner knows the benefit of a trailing commission?
-Pause-check-readjust, do your due diligence, nobody has a better vested interest in your money than you
-don?t invest on sales talk alone

The Rich Get Richer
-And the Poor get the picture?
-Life rewards performance and action
-There ?is? a secret to wealth (hint?use the search function)-The rich adapt to overcome
Quote:
KERRY PACKER: Of course I am minimising my tax. And if anybody in this country doesn't minimise their tax, they want their heads read, because as a government, I can tell you you're not spending it that well that we should be donating extra!

Life and Investing moves in cycles
-Listen to your elders ;o)
-Ten years is a long time
-Last year was a short time

There is no Perfect Deal
-But I?ve read some pretty awesome ones on the forum
-Hindsight is a great thing
-Slight imperfections are a part of life
-Now is the perfect time
-There are many ways to skin a cat
-Procrastination can be a persistent and debilitating disorder

Cashflow is King
-It?s the lifeblood and Capital Growth the muscle
-Have a buffer
-Capital Growth exercised well, can leverage heavy objects

What is The Why?
-Why are you building the portfolio?
-For us its Lifestyle choices and Financial Freedom, Super just wont cut it

What is your Strategy?
-Were amazed at Rixters (and others) pre determined and well thought out paths and plans


Lastly

Talk is cheap. Supply exceeds Demand

I could probably edit/improve the post as an update, as could many others here on SS

 

[jackplee]

how to start a new thread

Sorry to hijack this thread, but can someone please kindly tell me how to start a brand new thread in order to post my questions ? I just joined today. thanks. btw buying a house or town house where there is a demand for rental might be a good idea. but that's just me.

 

[Peter 14.7]

Sorry to hijack this thread, but can someone please kindly tell me how to start a brand new thread in order to post my questions ? I just joined today. thanks. btw buying a house or town house where there is a demand for rental might be a good idea. but that's just me.

Just post a new thread in the right area. Like you posted here,

 

[Peter 14.7]

very good advice thanks Peter! Yeah i work with some older guys who have told me about that special day when a girl comes along

Yes but don't dismay. I married my school sweetheart at 22 and this year we celebrate 25 years together. Without her, I could not have achieved my IP success. Just be safe I say.

Good luck, Peter 14.7

 

[hobo]

I've just found this thread and I just... don't... understand.

So, trey... are you up to $400k in savings yet?? Any decision yet on what you plan to do re investing (whether it be in property or elsewhere...)??

 

[D.T.]

I've just found this thread and I just... don't... understand.

So, trey... are you up to $400k in savings yet?? Any decision yet on what you plan to do re investing (whether it be in property or elsewhere...)??

No way. Havent you heard? Its going to crash everywhere!

 

[toony]

Hi Trey

Is your nickname 'Ash'?

 

[trey]

I've just found this thread and I just... don't... understand.

So, trey... are you up to $400k in savings yet?? Any decision yet on what you plan to do re investing (whether it be in property or elsewhere...)??

Hi Hobo no i have 300k saved ready to go whenever i want. Atm im very happy surfing and enjoying life so i will continue cruising. Im in no rush to be in heaps of debt to a bank atm that being said i do always look and if something came along that was decent id be keen. As Dt mentioned ive been ready alot of things lately some positive some negative about the market. but ill definately be holding off for a while as i think things a going to change. i know everyone disagrees but its just my thoughts.

Cheers

 

[trey]

Hi Trey

Is your nickname 'Ash'?

Hi Toony,

Haahahah thats a good one!!