What would be your next moves in my situation?

[tyrone]

Hi all!

I need a bit of help with what to do next. I'm not here for someone to just tell me exactly what to do but I just need some ideas from some experienced people like yourselfs on what you would do in my situation. I'm 22 and working up north earning good money but its a bit frustrating not having a plan in place or a goal.

Here is some info about myself.

PPOP - 3x2 unit. Cost 335k but I think it would be valued around the 380k mark. There's currently a top storey one on the market for 399k and mine is bottom floor.

I currently owe 320k on it and have 20k in the offset. My repayments are 472 per week.

I do not have and loans or credit cards. Only a phone contract at 100 p/m.

My job security is good for the moment but who knows with mining company's anything could happen at any time. I wouldn't be getting fired for being a crappy worker.

As I am in camp I don't pay for food rent fuel or anything.

My girlfriend earns only 600 a week spend probably 100 fuel a week and 100 on food.

I love property and would like to something a bit more risky than just a buy and hold as I am young and think it would be a great time to take chances.

Any advice would be very appreciated thanks !

 

[starter]

First thing I would do is get your unit revalued.

 

[Aaron_C]

Perhaps get a loan increase on the unit - this will help get that little bit extra out that you can use for more purchases as your limiting factor is most likely deposits.

 

[Mick C]

1. Get the property re-value from your current bank ( no point going to diff bank given you bought your place on a 95% LVR UNLESS the valuation is really ****)

2. release the equity in a "Tax smart way/structure" - split loan OR a LOC

Regarding your investing.
1. You live in the WA, plenty of risky deals out there LOL
2. When you say you want something different and not your typical "hold properties"- im presuming your talking about developments, granny flats and subdivisions etc.

^ the above strategy requires plenty of capital and outlay...and most importantly it could potential break or make you ( break you if you don;t have the experience or connection)

3. With $20k in your offset and presume you have access to another $20k from equity...i can't see you doing much in term of development with $40k that has a decent return unless you do a JV with someone else and JV is a risky business as well.

Either way, talk to others how are investors and read as much as possible regarding the different type of strategies.



Regards
Michael

 

[HD_ACE]

I love property and would like to something a bit more risky than just a buy and hold as I am young and think it would be a great time to take chances.

Any advice would be very appreciated thanks !

Then you may wan to look at developing to satisfy your appitite for risk. You will need some equity and or cash reserves to complete the projects. You can start off small with retain and build duplex sites which are easier to hold and finance. Then when youve got more capital behind you start 3 4 5 unit sites or multi dwellings.

If you fall on your a** then you have time to recover imo.

Hope that helps
Cheers

 

[tyrone]

Then you may wan to look at developing to satisfy your appitite for risk. You will need some equity and or cash reserves to complete the projects. You can start off small with retain and build duplex sites which are easier to hold and finance. Then when youve got more capital behind you start 3 4 5 unit sites or multi dwellings.

If you fall on your a** then you have time to recover imo.

Hope that helps
Cheers

That sounds good to me! How do you structure doing a project like that? Wouldn't it take ages for me to get enough equity to sub-divide and build after I brought the prop.

 

[mikezen]

there r heaps of articles in api and ip mags related to small development, sub division etc, with real life breakdown costs and timeframes, so u should invest in some reading there, also Ron Forlee has a book called aus resi prop development, which i am currently reading, this would help w some dd

 

[tyrone]

there r heaps of articles in api and ip mags related to small development, sub division etc, with real life breakdown costs and timeframes, so u should invest in some reading there, also Ron Forlee has a book called aus resi prop development, which i am currently reading, this would help w some dd

Cheers mate sounds good

 

[Aaron_C]

I think it's a bit early for you to consider developing. Developing requires significant cashflow AND equity. Without one or the other it is too risky, imo.

 

[tyrone]

As I work 4 and 1 I would probably use a buyers agent as sub blocks in Perth go super fast. Do they do all the work for you as in call town planners and make sure the prop is ticking all the right areas too retain and build

 

[HD_ACE]

That sounds good to me! How do you structure doing a project like that? Wouldn't it take ages for me to get enough equity to sub-divide and build after I brought the prop.

Well you will either have to hold to rise in value. If you had of bought 12 months ago in perth you would be looking pretty good. Or you save some cash, since your cashflow is good, to pay for subdivision. Then use the equity from the value of new land to progress. Or renovate existing house and revalue Or build and use equity.
It all depends on alot of things really and if you plan it all properly from the start it will be alot easier.

Cheers

 

[sydneyinvestor]

sell up

sell up and go buy elsewhere from what it sounds like

 

[westminster]

Hey Tyrone,
You've done well to get back onto your feet. It wasn't that long ago that things weren't so rosy.
How much are you saving a month at the moment?
I think what I would suggest would be to save as much as you can for the next 6mths and then perhaps invest interstate.

There is one property that I know of has been for sale for ever if you want a little risk here.

http://www.realestate.com.au/property-duplex+semi+detached-wa-westminster-110637585

I don't know how much it is anymore but if you can find a bank that will loan based on the land and a building contract then it might be a goer - not sure what the bank would think of the current transportable on it. Yes it would be buy and hold but it a little taste of the fun building a third of a triplex.

 

[tyrone]

Hey Tyrone,
You've done well to get back onto your feet. It wasn't that long ago that things weren't so rosy.
How much are you saving a month at the moment?
I think what I would suggest would be to save as much as you can for the next 6mths and then perhaps invest interstate.

There is one property that I know of has been for sale for ever if you want a little risk here.

http://www.realestate.com.au/property-duplex+semi+detached-wa-westminster-110637585

I don't know how much it is anymore but if you can find a bank that will loan based on the land and a building contract then it might be a goer - not sure what the bank would think of the current transportable on it. Yes it would be buy and hold but it a little taste of the fun building a third of a triplex.

Hey westminister! Yeah been a bit of a hard road but all good now! Got my licence back 2 days ago .

I would say I'm saving about 8 grand per month. I haven't put a budget together yet.
How do you work everything out when doing a project like that. There must be quite a lot of planning to make sure u make profit before even buying the prop....I will need something that If I was too lose my job I would be a me to hold it with a regular job back In Perth and wouldn't hurt the pocket too much.

Thanks for the advice mate

 

[MTR]

Hi Tyrone
I have to agree with Aaron as far as developing goes, perhaps a little premature as you need equity and cashflow during the development.

Another strategy that may suit is to purchase a property which will be rezoned in the next couple of years, and once rezoned hopefully you will be in a position financially to develop. As Perth market is rising you should be able to access equity.

Areas such as Girrawheen, Koondoola, Lockridge, Beechboro all lower entry levels, in some cases you will be able to retain the front property and build at the rear. The rents will almost cover the loan, I see this as low risk and an opportunity to add value down the track.

Here is a link that may help
http://somersoft.com/forums/showthread.php?t=82873

I would also contact City of Wanneroo.

If you identify a suitable property they can assist on guidelines and whether you can retain front build at rear, but of course you also need to do your own DD.

Another option is to buy an absolute dump and renovate, if you have the skills and in a position to do this.

I saw this one over the weekend, OMG, not for the faint hearted. I would not walk away from this, I would run.....

http://somersoft.com/forums/showthread.php?t=82873

Cheers, MTR

 

[TurkieSub]

Hey Tyrone, what project are you working on? If you're nearby I'm happy to have a chat with you!

 

[tyrone]

Hi Tyrone
I have to agree with Aaron as far as developing goes, perhaps a little premature as you need equity and cashflow during the development.

Another strategy that may suit is to purchase a property which will be rezoned in the next couple of years, and once rezoned hopefully you will be in a position financially to develop. As Perth market is rising you should be able to access equity.

Areas such as Girrawheen, Koondoola, Lockridge, Beechboro all lower entry levels, in some cases you will be able to retain the front property and build at the rear. The rents will almost cover the loan, I see this as low risk and an opportunity to add value down the track.

Here is a link that may help
http://somersoft.com/forums/showthread.php?t=82873

I would also contact City of Wanneroo.

If you identify a suitable property they can assist on guidelines and whether you can retain front build at rear, but of course you also need to do your own DD.

Another option is to buy an absolute dump and renovate, if you have the skills and in a position to do this.

I saw this one over the weekend, OMG, not for the faint hearted. I would not walk away from this, I would run.....

http://somersoft.com/forums/showthread.php?t=82873

Cheers, MTR

Hi MTR! I think you have hit the nail on the head and this is exact what I need to do! Where do Learn about R codes and zonings. How do you experts look at a property on realeatate.com and can tell if its a Retain and build.

As these props are hot right now and I work 4-1 do you think it would be smarter for me to get a buyers agent??

Thanks heaps for the advice I appreciate it heaps!

 

[tyrone]

Hey Tyrone, what project are you working on? If you're nearby I'm happy to have a chat with you!

No project yet but thanks mate

 

[TurkieSub]

No project yet but thanks mate

Sorry mate I think you misunderstood me, where abouts are you working? I'm in Onslow, if you're around here I could have a chat with you.

Niko

 

[MTR]

Hi Tyrone
I think in your situation you may be best using a BA, try Herron Todd White, I have been told they are good and cheaper than the competition
BA will source a property thats meets your criteria.

Target areas that suit your budget, I mentioned a few in my previous post that may suit?? Council will provide you with information regarding zoning. You will also find a mountain of information on SS, specific to development under the section Adding Value.

Cheers, MTR