Why Do Most Investors Stop Purchasing After Two Properties??

[Angel]

There is no way on this Earth that Hubby and I will achieve amazing wealth. Our goal is to replace current income in retirement and to do the things we haven't had a chance to do yet. Simple really. Life is satisfying at the moment, we would like the satisfaction to continue it. We would be satisfied sitting in a simple three bedroom house in an idyllic location. No Housing Commission flat for us, no multi million dollar mansion either. If I had a few million, I would much rather spend the $$$ doing fun things rather than looking at the inside of a marble bathroom or wiping spilled milk off marble kitchen benchtops.

Hey China, I think you need to get a life and have a bit of fun before you die of a stress-induced medical condition.

 

[Rixter]

There is no way on this Earth that Hubby and I will achieve amazing wealth.

Whats the $$ figure for the definition of 'amazing wealth'

Our goal is to replace current income in retirement and to do the things we haven't had a chance to do yet. Simple really. Life is satisfying at the moment, we would like the satisfaction to continue it. We would be satisfied sitting in a simple three bedroom house in an idyllic location. No Housing Commission flat for us, no multi million dollar mansion either. If I had a few million, I would much rather spend the $$$ doing fun things rather than looking at the inside of a marble bathroom or wiping spilled milk off marble kitchen benchtops.

The common term for this status of life is 'ordinary millionaire'! Enjoy

 

[china]

There is no way on this Earth that Hubby and I will achieve amazing wealth. Our goal is to replace current income in retirement and to do the things we haven't had a chance to do yet. Simple really. Life is satisfying at the moment, we would like the satisfaction to continue it. We would be satisfied sitting in a simple three bedroom house in an idyllic location. No Housing Commission flat for us, no multi million dollar mansion either. If I had a few million, I would much rather spend the $$$ doing fun things rather than looking at the inside of a marble bathroom or wiping spilled milk off marble kitchen benchtops.

Hey China, I think you need to get a life and have a bit of fun before you die of a stress-induced medical condition.

Never say never. Anything is possible. Impossible is nothing. Thats why we are here to share thoughts and experiences in growing wealth.

 

[Angel]

That's great China. I'll be sending my CV shortly. I trust you will be delighted to employ me at $150K per annum to work at your office and help manage your new and improved social life for you. My husband has dyslexia, add and aspergers. He is in his later fifties and never completed year 10 at school. He is a great worker when he isn't affected by allergy-induced migraines and would be happy to reno your dumpy little house for you for $150K.

Cheers Matey

Hubby just laughed and said I'd better offer his services for half a mill in case you actually take us up on the offer.

 

[china]

That's great China. I'll be sending my CV shortly. I trust you will be delighted to employ me at $150K per annum to work at your office and help manage your new and improved social life for you. My husband has dyslexia, add and aspergers. He is in his later fifties and never completed year 10 at school. He is a great worker when he isn't affected by allergy-induced migraines and would be happy to reno your dumpy little house for you for $150K.

Cheers Matey

Hubby just laughed and said I'd better offer his services for half a mill in case you actually take us up on the offer.

It is never too late to begin the journey towards wealth. Please post CV.

 

[Angel]

I suppose I'll have to update my CV now. It's at least six years old. How about we start a new thread called China Gets a Life as we are miles off topic now.

I'll be offline now as I have my weekly date with the Grantham household and later with Mrs Biggs. Good night all.

 

[BayView]

Most people (including many so called 'experts') would tell you it is virtually impossible to get more than 2 IPs - in a short period of time anyway. I've just spent the past couple of months trying to find a broker who won't laugh at me (and I have somersoft to thank for that!).

It is definitely a lot harder now post-GFC, but to get more than 2, or 3 or 10 IP's is really a mathematical equation for the Banks.

LVR and DSR; nothing more.

From 2000 to 2007 we went from none to 5, and I'm not even that good at this.

We used our PPoR equity, and made sure the cashflow from each IP was decent - not yer BS 5% rent yield (or less) that some people seem to thing is ok.

That'll definitely keep you at less than 3.

 

[Rixter]

It is definitely a lot harder now post-GFC, but to get more than 2, or 3 or 10 IP's is really a mathematical equation for the Banks.

LVR and DSR; nothing more.

From 2000 to 2007 we went from none to 5, and I'm not even that good at this.

We used our PPoR equity, and made sure the cashflow from each IP was decent - not yer BS 5% rent yield (or less) that some people seem to thing is ok.

That'll definitely keep you at less than 3.

I totally agree - LVR & DSR; nothing more.

Being able to Build a substantial size residential property portfolio is not about 'property'.

Its about finance and structuring it in such a way so as to be in a position to continually accessing it to keep purchasing and building your portfolio.

You must meet the banks/lender LVR & DSR lending modules and place yourself in a position to do so 'before' hitting the module walls because if you leave it until after its too late - catch 22.

You need to get an IP savvy mortgage broker on your team, sit down with them and discuss 'your' big picture goals & proposed investment strategy for attaining those goals before anything else.

I hope this helps.

 

[CHAOS]

The processes being too frustrating. I have days where I wonder why I bother. It would be easier to walk down to the travel agent book the family a holiday and hand over the savings. We planned to start refi in Feb and to have purchased another by now - to date no refi and no IP and now higher prices. Not laying blame here - just sharing some of the frustrating stuff that can weaken the mind and ones determination to keep going.

 

[Rixter]

The processes being too frustrating. I have days where I wonder why I bother. It would be easier to walk down to the travel agent book the family a holiday and hand over the savings. We planned to start refi in Feb and to have purchased another by now - to date no refi and no IP and now higher prices. Not laying blame here - just sharing some of the frustrating stuff that can weaken the mind and ones determination to keep going.

That's a classic example why the following formula is so crucial if you really want to achieve success -

Success = 80% correct Mindset x 20% applied Strategy.

In other words, How you think is Four Times more important than how you plan to do it!

Its a simple concept but not easy. If it was easy everyone would be doing it!

I hope this provides some food for thought.

 

[CHAOS]

That's a classic example why the following formula is so crucial if you really want to achieve success -

Success = 80% correct Mindset x 20% applied Strategy.

In other words, How you think is Four Times more important than how you plan to do it!

Its a simple concept but not easy. If it was easy everyone would be doing it!

I hope this provides some food for thought.

Thanks Rixter - I have read this often in your posts on SS and often reflect on it.
My moments of mind weakness do pass.

 

[HotRod]

Look on the bright side.

8.4% of the population own at least one IP, that's 1 in every 12 people, 11 out of 12 do not.

So by owning one IP people start to join an exclusive club.

I think the numbers start to come down dramatically after that.

2IPs - 2% of the population or 1 in 50 people.
3IPs - 0.69% or 1 in 145
4IPs - 0.28% or 1 in 360

or something like that!

 

[china]

Look on the bright side.

8.4% of the population own at least one IP, that's 1 in every 12 people, 11 out of 12 do not.

So by owning one IP people start to join an exclusive club.

I think the numbers start to come down dramatically after that.

2IPs - 2% of the population or 1 in 50 people.
3IPs - 0.69% or 1 in 145
4IPs - 0.28% or 1 in 360

or something like that!

Are there numbers on the value of the IPs owned by Australians? How does owning 4 IPs worth 200k compare to owning one 800kl IP? So is it better to be in the 0.28% group or the 1 in 12 group?

 

[kathryn d]

That's a classic example why the following formula is so crucial if you really want to achieve success -

Success = 80% correct Mindset x 20% applied Strategy.

In other words, How you think is Four Times more important than how you plan to do it!

Its a simple concept but not easy. If it was easy everyone would be doing it!

I hope this provides some food for thought.

This is so true.
If we stopped when we were told no, we would be nowhere.
Most of our purchases had issues, and we just plodded thru them .

 

[HotRod]

Are there numbers on the value of the IPs owned by Australians? How does owning 4 IPs worth 200k compare to owning one 800kl IP? So is it better to be in the 0.28% group or the 1 in 12 group?

Dunno. They're just stats.

Depends what you class as better and what your strategy is.

I've not got a large number of properties but I can afford to retire.

Someone with the same number may not be able to.

Horses for courses.

You might have old Mrs Smith owning a single $120M office block bringing in $12M a year, a young Mr Jones owning 120 houses bringing in $120K or a vibrant Miss White owning 12 houses and barely managing to keep afloat, but still getting her story printed in API/YIP etc as an aspirational story.

 

[Deltaberry]

We used our PPoR equity, and made sure the cashflow from each IP was decent - not yer BS 5% rent yield (or less) that some people seem to thing is ok.

Different sites have different usages and command different yields. The last time we bought something less than 5%, it's gone up maybe 3x, and still remains below 5%. I haven't even gotten around to getting permits for something that will be transformational for this city, because I'm not a developer and don't want to spend the time and effort trying to get permits. If I did, I'd probably double the site value again. So yes, depending on the site, I do think below 5% or less is okay.

 

[Edmond Dantes]

Different sites have different usages and command different yields. The last time we bought something less than 5%, it's gone up maybe 3x, and still remains below 5%. I haven't even gotten around to getting permits for something that will be transformational for this city, because I'm not a developer and don't want to spend the time and effort trying to get permits. If I did, I'd probably double the site value again. So yes, depending on the site, I do think below 5% or less is okay.

Depends on your income, DB. If I remember correctly, yours is definitely not average. With high salaries, you are able to hold it. Not the case for the average investor with an average salary

 

[MTR]

Dunno. They're just stats.

You might have old Mrs Smith owning a single $120M office block bringing in $12M a year, a young Mr Jones owning 120 houses bringing in $120K or a vibrant Miss White owning 12 houses and barely managing to keep afloat, but still getting her story printed in API/YIP etc as an aspirational story.

Very true.... A couple of months ago reading API mag, aka aspirational story, Mr and Mrs X multi-million $ portfolio, 90-05% LVR, must be joking.
This is woeful, they must be desperate.

 

[nhg]

Very true.... A couple of months ago reading API mag, aka aspirational story, Mr and Mrs X multi-million $ portfolio, 90-05% LVR, must be joking.
This is woeful, they must be desperate.

Ive stopped reading those mags. Occasionaly browse through the stats. Those stories have a few to many logic gaps with un phenomenal returns. Most who did well purchased in late 2008 before the mini boom. They could have bought anything.

 

[Deltaberry]

Those stories often have plot holes, they don't tell you the negative side, and some of the stats thrown around are sometimes pretty mediocre.