Advice needed for next move

Hi guys,

Long time lurker, first time poster. I really enjoy following the forums here and learning as much as i can from everyones stories and strategies.

I was hoping to get some advice on which direction i should go next in my own journey.


Here is my position so far:

2003 - Bought PPOR in for 179k, Current value 520k, Loan 45k

2012 - Purchased 3br house IP for 295k, Current value 520k, Loan 193k - Rented @310pw

2014 - Purchased 2 br unit IP for 280k, current value 380k, Loan 275k - rented @ 300pw

2017 - Invested 100k cash in Commercial property syndicate, 3% stake in property valued at 7.5m

2020 - Refinanced with 2nd tier lender, took 130k cash out loan against PPOR and invested with commercial syndicate again, 10% stake in prop valued at 3m

At this point the commercial properties are basically cashflow neutral, but have decent upside with planned development.

Since refi this year, 1st IP has become CF positive, 2nd IP has switched from IO to P&I and is still CF negative.

I am 39 y.o, living with girlfriend, no kids. Working in construction as Sub contractor earning 100 -120k. I have 160k cash in offset acc.

I have kind of fumbled my way to where i am now, never had any goals or plans, and not too sure where to go from here. I would like to get a commercial property of my own, primarily for cash flow, but dont really know where to start.
Apart from that i just want to build an asset base which will help me retire in 20 years.

Please help!!

 

If you get the direction from this forum then it will be their direction not yours. I guess you can make an investment strategy and post here and others can help you fine-tune it.

This morning I read a very good thread about commercial properties on this website.

 

Welcome to the forum

How much do you need in asset/cashflow to reach your goals? And how close are you currently?

 

Thanks Jess!

Ideally i would like to replace my income entirely, or as close to it as possible, It seems like i am miles away at the moment.
I think i need to work on my strategy, worried that if i invest in another low yeild asset, that might spell the end of my borrowing capacity for a while. any suggestions?

 

Often it is helpful to start at your end goal and apply the "Rule of 25".

Say you want to have $X amount of annual income. To determine how much you need to accumulate in terms of real estate assets, you multiply it by 25.

So if you wanted $100k in annual income, you would require $2.5m in unencumbered assets.

Now, that assumes a 4% yield, so with recent interest rate and yield declines, we might need to come up with "The Rule of 30", but you get the point.

Hope this helps.