$250k Cash to invest - best way to give my boss the middle finger? ;)

Discussion in 'Introductions' started by Ben Eldred1, 23rd Feb, 2018.

Join Australia's most dynamic and respected property investment community
  1. Ben Eldred1

    Ben Eldred1 New Member

    Joined:
    23rd Feb, 2018
    Posts:
    4
    Location:
    Brisbane
    Hi there people - love the forum. First time poster so be gentle ;)

    I have around 250k to invest and looking at leaving the corporate world behind. Currently earning circa $80k-$90k per year before tax. I love to reno houses and flip but also want to create a passive income for myself so I can focus on property full time.

    I was hoping for some advice / thoughts on best strategies to do this. I am Brisbane based and thinking of investing in small Gold Coast Units / Hotel rooms which can be owned and managed by me and rented on AirB&B. Looking at Surfers Paradise or other tourism hot spots for high occupancy rates - $150k-$300k rooms / units.

    Has anyone done this with positive returns / experiences or does anyone have any other advice on how to use my money for the best outcome.

    Any advice would be greatly appreciated.

    Ben
     
    jefn89 likes this.
  2. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,436
    Location:
    Melbourne
    Establish all your investing and self-employed stuff BEFORE giving your boss the news..... and don't give them the finger. Don't burn the bridges that you may need to cross later.

    The Y-man
     
    TMNT, datto, jefn89 and 1 other person like this.
  3. Morgs

    Morgs Well-Known Member Business Member

    Joined:
    7th Dec, 2017
    Posts:
    1,792
    Location:
    Sydney NSW
    Whatever you do make sure you set yourself up with the right tax structure that'll sustain serviceability in the eyes of lenders. Nothing worse than giving the boss the finger and not being able to borrow any money to do what you need to do to make more!
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,598
    Location:
    Gold Coast (Australia Wide)
    Hi Ben

    welcome to PC

    Is your work/boss that bad ?

    ta
    rolf
     
    jefn89 likes this.
  5. jyeung80

    jyeung80 Well-Known Member

    Joined:
    25th May, 2017
    Posts:
    215
    Location:
    Melbourne
    Couldn't agree more. Not to sound negative, but there's absolutely no guarantee that you'll make it, especially when it comes to property. Even if you hate your boss and/or job and never plan to go back to the same company, the world is a small place. You might need to go back into the same industry and the last thing you want is for your reputation to precede you...
     
  6. Eric Wu

    Eric Wu Well-Known Member Business Member

    Joined:
    8th Oct, 2016
    Posts:
    1,603
    Location:
    Australia
    welcome to PC @Ben Eldred1, sounds like you are looking for something bigger, brighter and more rewarding. congratulations to you to have such a mind set.

    if you want leave you current job, have you thought about hove you are going to borrow money to do your projects when you have no income ( for a short period of time). and also maybe before pulling the plug, get your finance ready. it is a bit like learning swimming, you don't want to jump into water straightway while haven't swim-ed before, I understand determination is important, survival is critical as well, better to have life jacket on before jumping in. hope it make sense. :)
     
  7. jefn89

    jefn89 Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    183
    Location:
    Sydney
    Interesting thoughts here so far Ben!
    For me if you haven't got much/any residual (passive income is a myth) you've got to figure out the plan before considering leaving the job..

    As mentioned and being a broker myself having regular income from an employer or some arrangement is vital, how are you planning on borrowing money? Of course you could borrow and then leave your role although as a broker and from an investors perspective you've got to ask yourself how are you going to keep paying for the mortgage/s? Will there be a financial buffer in place i.e. spend 200K of it and keep $50K in the bank for a rainy day, repairs, while you're setting up a business etc

    The 2 key questions you should start asking yourself before you do anything are:

    * What's the goal income you want to achieve? i.e. do you want to replace your income, if so in how long

    * What are you going to/want to do next?

    Establish these before you consider anything is the best advice I feel I could offer!

    Keep us posted, curious to see how it all turns out :)
     
  8. Nadine Cross

    Nadine Cross Well-Known Member

    Joined:
    17th Feb, 2018
    Posts:
    131
    Location:
    Aus
    It is very hard to make any sort of significant profit from Reno/flips on cheaper end properties. The volume of time and work, cost of materials, purchase and selling costs and CGT leaves little at the end after you divide up the profit into an hourly rate of pay...even in a booming market.
    You need to play at a higher price level for it to be worthwhile...similar amount of work and time usually, and often similar percentage return, but larger actual dollars in the pocket as a result.
     
    Propertunity likes this.
  9. Propertunity

    Propertunity Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,476
    Location:
    NSW
    As others have said, work on a strategy that works in your spare time before leaving the corporate world behind. Flips in Australia need to be very profitable to pay for holding costs, stamp duty and selling agent comms and tax. This is a different environment to where it may be more easily done in the US.
    [​IMG]
     
  10. Ben Eldred1

    Ben Eldred1 New Member

    Joined:
    23rd Feb, 2018
    Posts:
    4
    Location:
    Brisbane
    Thanks everyone and just to elaborate my boss is actually awesome. It was a kind of 'tongue and cheek' comment more than a serious one, but I'm an entrepreneur at heart and cant see me in the office much longer and of course I wouldn't burn my bridges.

    So I was thinking I could secure finance first, maybe live in and reno my first property (PPR) - maybe live in for 6 months to save in CGT - looking at mid market houses within 10km from the city, around the $450k-$600k mark and try and increase its value by around 30% for the re-sale. If successful then I could repeat - maybe then leave work once secured my second property.

    I know I could go back into the workplace if needed but really want to give the reno life a go :)

    P.s if anyone knows any good property finders / mentors in Brisbane I would really value their time.
     
  11. KinG3o0o

    KinG3o0o Well-Known Member

    Joined:
    17th Jul, 2017
    Posts:
    1,075
    Location:
    Sydney
    at 250k how you gonna generate/replace the 80-90k a year that you are earning now ?

    unless your excellent stock picker or looking to gamble in crypto or casino.. i dont see any other ways..


    property ... zero chance.. sorry to blow your bubble.
     
  12. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,256
    Location:
    Australia
    How many reno and flips have you done?
     
  13. Ben Eldred1

    Ben Eldred1 New Member

    Joined:
    23rd Feb, 2018
    Posts:
    4
    Location:
    Brisbane
    Thanks for the constructive feedback ;)

    How about using JV partners to fund and work in partnership, you really thing I have no hope? I though this site was about encouragement and helping people?
     
  14. Ben Eldred1

    Ben Eldred1 New Member

    Joined:
    23rd Feb, 2018
    Posts:
    4
    Location:
    Brisbane

    I have done two successful flips in the UK
     
    The Y-man likes this.
  15. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,436
    Location:
    Melbourne
    Often the responses are a reflection of the information given with the question.

    For example, had you stated that you had done 2 successful flips in the uk in the initial post, the responses you would have got would probably have been different.
    If you stated that you were open to JVs then best to state it up front - not many are (for various reasons). For instance, would you be open to a JV where you are a minority holder?

    We get a lot of people on here where their ambition exceeds their ability or reality - in which case there is a need IMHO for some reality checks to be in place and hard questions asked. Blind encouragement of such people could be irresponsible.

    The Y-man
     
    jefn89 likes this.
  16. ORAC

    ORAC Well-Known Member

    Joined:
    1st Mar, 2016
    Posts:
    170
    Location:
    Brisbane
    I have mentioned this many times before for Brisbanites - the best thing you can do is learn about the strategies from other people like you doing it. Hence, recommend attendance at Matt Jones Brisbane Property Networking Group (BPNG). Brisbane Property Networking Group (Brisbane, Australia). See the "Real Deals" that people are doing and then that will help you see the diverse possibilities that are there. The group is good for networking and learning about JVs. In fact, Matt's speciality is JV type deals and he has some materials on this - see Property Resource Shop | for the JV DIY Kit.

    Whilst some commentators have mentioned the challenge with the funds available, it's because they probably have experience on the reality of the matters. For example, $250K is a lot of money, but for a typical subdivision project in Brisbane LGA now, that would be the bare minimum just to do a subdivision (e.g. $140K for a 20% deposit on a $700K property, and $100K for the subdivision wouldn't leave much change. Assuming for this deal it was a full 1 into 2 subdivision, selling the resultant 2 lots of land, you would need to sell each lot say at least $450K/plus to make a gross $100K return. The project might take 4 to 6 months. That one deal theoretically would replace your income).

    Finding these deals at the right price does take time and is a challenge, costs can get out of control with unforseen risks being realised, the market can change in the mean time, you can be holding onto the property for a lot longer than you desire. I do know people in Brisbane whose full time job is finding and doing subdivision deals in particular areas - in some cases they might make $60K out of a deal, but they will do that several times a year.

    One thing that is for sure, once you've done one or two, you will realise where your passion lies, doing subdivision deals sounds like fun but it is very hard work, you will realise that having a job and borrowing money when you want is a blessing in disguise. However, for a person with the right mindset and tenacity then certainly a feasible thing to do. Hence, the commentators here are offering their measured advice and not being negative.
     
    The Y-man likes this.

We provide our clients with the opportunity to select their own investments from a wide range of ASX listed securities. We provide the research to ensure your selections will achieve the goals. This is the value of advice.