Advice on investment strategy needed!

Hi Guys

New to property chat and looking to get into the property game. Was hoping to get some feedback on my current plan I have in mind.

First my current situation

My income 50k base plus extra 20k overtime/penalties. Age 34

Wife is on 55k. Age 31

2 kids

Credit card with a 7k limit – will have $0 balance when time to invest.

PPOR has roughly 320k debt. Valuation done last week at 480k.

Broker said I have 64k in equity I can use.

Havnt finalised borrowing power but he said we will be looking at 500-600k.

My plan

1. Buy a house between 250-350k either in Adelaide (Christie downs/Christie beach area) or Brisbane (Logan area). House to have enough land for future subdivision or maybe even granny flat. House to be neutral to positive geared. – This is a buy and hold investment


2. Buy land, subdivide and sell or buy house under market value reno and sell or buy H&L once complete sell. Use profits to pay down PPOR and investment house. – Note (I understand my borrowing capacity might limit me from doing this if so will partner up with a family member to increase funds needed and split profits with them.)



3. Repeat step 2. Continue this process until all debts on property portfolio paid off.


4. -In 10 years’ time will move to new PPOR and use current one as investment
- If council permits build granny flat on original investment property or subdivide and build house.


Ideally I would love to have PPOR and portfolio all paid off within 15-20 years. I’m hoping by continually repeating step 2 this will help pay down debts quicker. Also having an offset account to help reduce the amount of interest to be paid.

So after the timeframe I would have 3 investment properties paid off. (Bringing in $350-450 rent each week) and also PPOR paid off. This should at least allow my wife to retire early and I have the option of working part time hours. This will help set us up for retirement and leave good assets for kids/future grandkids.

Somewhere in all this I would love to add another buy and hold investment that I can subdivide and build bringing my total portfolio to 5 investment properties. But don’t see how it’s possible.

Anyway as a complete newb I would love some advice both good and bad on the above. Is this possible? is there a better way to do this? things i need to consider? experiences/stories with peoples on similar living conditions? etc etc etc....

To those who reply..
Thank You

 

So approximately $110k income with 2 kids, and $60k-ish starting capital.

At a quick glance, you are alluding to a strategy that’s relevant to your situation.

A quick rule of thumb I’ve learnt is:

<$200k savings = do a chunk (capital) deal

>$200k savings = can do a buy and hold for cashflow.

Buy and hold strategy at this point will be unlikely to yield your desired outcome within 15-20 years. Say you buy 1 property now in Logan, the $60k will be eaten up by deposit, SD, and fees. You generate $5k passive income (maybe), keeping in mind you will have to renovate your place every few years and take on repairs etc. How long would it take to build up the next deposit? What if one of you gets sick, what if your partner gets pregnant again. Sure house prices could go up, though your ability to refinance will still be capped by your serviceability.

If you were to go down the renovate, subdivide, DA uplift, sub-lease, JV, path, etc. You can create say $50k profit from a deal, which will help you build up your savings, and when structured right, can be added to your income for serviceability over time.

The property journey isn’t linear and over time new opportunities will open up to you.

Say you become good at sourcing deals or doing renovations, perhaps you can then transition over to do JV deals or source property as a buyers agent. This is a way for you to shift your starting position.

Just remember, posture of learning, revise your strategy as you go along and see what your portfolio needs to keep going 3 moves ahead.

Also an important one, no matter where you are at any point in time, you still have 100% of your journey left to go.