We've done it!

[MichaelW]

Congratulations Rixter!

You're one of the strong investors here that sets a strategy then executes it. Whether the strategy is the "right" one is more of a matter of personal preference, and for you I know your strategy is the right one!

You deserve every success that your "action" brings. A congratulatory little kudos is winging its way to your User CP.

Well done!

Cheers,
Michael.

 

[Rixter]

Do you have investments in other asset classes too?

As I have previously mentioned, we already have significant equity and Im sure it will also generate a lot more over next few years.

Instead of letting this lazy equity just sit there we plan to get it working more efficiently for us by placing a portion into the stockmarket via a managed fund invested for cash flow income.

Currently we have a very very small parcel of shares.

 

[BoatBoy]

Got onto this one a bit late but well done and Congrat's, a nice part of the bay that is.

Great to see a cunning plan come together.



Dave

 

[MTR]

Thanks Rixter for providing further info.

All the best and good luck.

Cheers, MTR

 

[sheiks]

Well done Rixter

You are a true inspiration for all of us on this forum ;-)

 

[Tulip]

Congratulations from me also Rixter. I have found your posts very useful in learning how flesh out the details in my plan.

Can I ask you if you planned to acquire the total gross 3.5 million of property before beginning the next phase, or were you happy to get to say 80% of your required target, then begin the next phase while letting the compounding of your assets get you to your target.

Also, I know you have previously posted on methods you have used to assist you around serviceabilty problems. Looking back now, did you find convincing banks of serviceabilty easier or harder in the second half of your journey?

 

[Rixter]

Can I ask you if you planned to acquire the total gross 3.5 million of property before beginning the next phase, or were you happy to get to say 80% of your required target, then begin the next phase while letting the compounding of your assets get you to your target.

Tulip,

First, I worked out a budget on how much per annum we required to support our desired lifestyle.

From that I then worked out what size portfolio (including SANF buffer) I needed to build to attain that annual income. Then I set about acquiring those assets.

We now have completed the property acquisition stage of that portfolio. With the remaining time left the compounding capital growth on those assets will passively carry us forward to our target.

Also, I know you have previously posted on methods you have used to assist you around serviceabilty problems. Looking back now, did you find convincing banks of serviceabilty easier or harder in the second half of your journey?

Once I found a way round the DSR the financing became a lot easier mainly due the financing options increasing once you have substancial equity within your portfolio.

For some one just starting out who has no equity to minimal equity they are purely reliant on cash flow income in order to meet the banks DSR module. Once you have equity your options open up.

You can convert equity to create cash flow for yourself but if you only have limited cash flow when starting out, once it runs out its gone.

I hope this helps answer your questions.

 

[kelvinh]

Well done Rixter...
Great plan.. great execution...

I read that you use a LOC for the IP expense.. but dont captialise the interest/costs...
Could you go over ways you got through any serviceability issues.. I see use used cashbonds etc to get the finance.. but once youve gotten it.. how do you go about getting through the day to cost of holding multiple IP's...

Regards

Kelvin

 

[Rixter]

I read that you use a LOC for the IP expense.. but dont captialise the interest/costs...
Could you go over ways you got through any serviceability issues.. I see use used cashbonds etc to get the finance.. but once youve gotten it.. how do you go about getting through the day to cost of holding multiple IP's...

Kelvin , I use my investment LOC's like a big overdraft faciltiy. Any monthy shortfalls between incomes & outgoings are obsorbed into the LOC balance. Earlier purchased properties are cash flow positive which also helps as they offsett the later purchased negative cash flow properties.

I am also planning to leverage some of the equity into the share market invested for income ......this also will cover and reduce property holding costs.

 

[Leandro]

Congratulations

Congratulations Rixter!

I have found your strategy and execution to be inspiring, i appreciate you sharing it with us.

I really admired how you stated a plan and your explicit and clear reasoning behind it, and then completely stuck to it. This shows you have put much thought into it.

One question which i didn't notice anyone ask on this thread, it may have been answered earlier. Did you purchase the properties in your own name with spouse? or in a trust?

I looked to where the Government, Commercial, Retail, and Private sectors where injecting money.

Where did you find this information for areas which you didn't know about before you invested? The internet, API magazine, fellow investors?

cheers

 

[Tulip]

Thanks Rixter,

I hadn't previously considered stopping prior to target and letting compounding get us across the line as a tool.

We are currently ok with with serviceability and equity is building, but need to be more creative with each purchase (just arranging finance for IP2 and IP3). I was just trying to get a feel for how it works further down the line, so your answer is encouraging.

 

[jingo]

Hi Rixter,

Congratulations on your achievements to date. I enjoy your posts, and find them very helpful.

Regards Jason.

 

[bernly]

Just found this thread. Well done, Rixter, and well deserved. It must be a good feeling to be where you're at at the moment.

Cheers

 

[Rixter]

One question which i didn't notice anyone ask on this thread, it may have been answered earlier. Did you purchase the properties in your own name with spouse? or in a trust?

Leandro,

We try to operate under the KISS philosophy.

As such, most of our portfolio is purchased solely in my name or solely in my wife's name. We do however have one property purchased earlier on when first starting out as Tenants in Common.

Not by choice tho as the bank required it and as we were relatively new and inexperienced to property investment & the various other structuring options available, we didn't know any better back then.

It's been a big learning curve along the way they will continue for many many years to come I'm sure.

Where did you find this information for areas which you didn't know about before you invested? The internet, API magazine, fellow investors?

A combination of various resources really.

Various local council & state government planning, infrastructure, and other government agency websites. ABS website, Real Estate agents, Big multi-national retailers, API & other investment magazines, local & state newspapers, people living locally in identified areas, TV, Radio & networking in person and online with other investors etc etc.

Hope this helps.

 

[MCS_80]

Well done Rixter,

Just one question I have. (Please ignore my ignorance)

With having thise many properties and eventually not having to "work" for income, how would you service each loan? I with the equity? With the rent?

Well done once again...

Cheers

Mick

 

[stumunro]

Well done Rixter,

Just one question I have. (Please ignore my ignorance)

With having thise many properties and eventually not having to "work" for income, how would you service each loan? I with the equity? With the rent?

Well done once again...

Cheers

Mick

it's part of the strategy, harvesting the equity to pay for everything in the form of an LOC. I'm pretty sure 2 LOC's are setup, one for the properties (tax deductible) another for personal lifestyle.

Basically the growth in the properties cover all the bills & income for yourself, plus the capitalised interest repayments.

 

[Rixter]

With having thise many properties and eventually not having to "work" for income, how would you service each loan? I with the equity? With the rent?

From rental income, existing portfolio equity via LOC's & any other form of passive income.

Mick I hope this answers your query.

 

[DebtEquity]

Well done Rixter thanks for insight and great strategy plan. I am inspired to start again after losing most of my portfolio before the boom.

My question is how do you find good IPs in the eastern states and how to make sure that they are good areas to invest in.

Have you used the investors club for property purchases? I am considering using them to get a couple of IPs over in eastern states.

thanks

 

[Oscar]

Well done Rixter. Nothing beats devising a smart plan and executing against it.

Your D-day date made me smile. July 1 2010 is same as mine. I'll be 45 on that day and fairly certain any work I do (if at all) will be purely because I want it rather than need it. The plan so far will be to take a year or two off to smell the roses and take it easy with a well deserved rest. I'll have a couple million frequent flyer points by then so travel with wife will be obviously high on the agenda. This will be done by using a fraction of the equity to live off for a couple years (aka LOE). Fairly certain that when I get that off my chest I will probably return to some form of work but on my terms, either starting a business/franchise, or some part time consulting or other form of work to structure my life a little.

I also started investing about the same time as you. In my case 1999. No complex plan other than buying good quality properties as I could afford them. I have a total of 5 but they're all pretty cool locations. Upon reflection, it was clear my major asset has always been my J.O.B which has afforded me healthy cash flows. I've invested much time and made sacrifices here and there to progress the career. Having done that, I can't overestimate how important it is to maintain focus on your day job and maximize work opportunities while you also invest "on the side".

It's all good...

 

[Bazza]

Well done Rixter. I like your LOE strategy.

You'll be able to visit the Somers for Christmas - I believe they live in Cleveland.

Cheers,

Bazza