What to do with $23k redraw?

[doozer]

We have $23k redraw on one of our properties and I'm looking for advice as to the best place to use it in the current environment?
Put it towards an IP purchase?
Add it to our managed fund for which we have $20k plus 50% margin loan
Or something else?
Our combined incomes are about $103k.

We currently have 4 x IPs with another due to settle in July this year.
Please help

 

[Lofty]

Hi Doozer

One of the numerous possibilities for your $23K would be to enter into a joint venture (JV) with a vendor financier.

In our last JV our partner invested $17,526 to purchase a property for $229,950 (the vendor paid our legals and stamp duty). The JV then on sold the property using vendor finance (a wrap). Our JV partner is now receiving:
1. He received $5,000 from the deposit paid by the new purchasers (wrapees)
2. $97 per month to cover the cost of borrowing the $17,526
3. $212 per month in positive cash flow

If we refinance the wrapees into a traditional mortgage at the end of year two, he will receive his $17,526 back plus $15,821 back end profit.

If we refinance the wrapees into a traditional mortgage at the end of year three, he will receive his $17,526 back plus $14,078 back end profit.

Good luck with your search to get your $23K working hard

Cheers, Paul

 

[our obsession]

Easy question...easy answer for me..

Doozer...as long as you don't need to top up your buffer zone, I would be deliriously happy to scoot off and buy more property (or build)..
But that's just the personal opinion of an obsessive addicted property freak
Have fun.

 

[kissfan]

OR.......................leave it where it is to reduce a bit of interest payments.

Depends on your overall cashflow situation.

Regards
Marty

 

[doozer]

Thank you to those who have offered to suggestions. I will probably use the redraw for a bathroom renovation on one of the IPs later in the year, then revalue the property and refinance to purchase again. See what happens.

 

[The Y-man]

Depends on your overall cashflow situation.

Depends on so many things (tax position, future plans, risk tolerance, safety nets, etc etc etc ) that it would be perilous to suggest anything without more info.....

Cheers,

The Y-man