Building a large property portfolio from scratch?

Discussion in 'Where to Buy' started by JohnHalas, 1st Feb, 2017.

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  1. JohnHalas

    JohnHalas New Member

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    Hi all,

    I am new to investing in property and cannot wait to get into the market for my first investment property.

    My goal is to build a significant property portfolio.

    I am Starting from scratch and will have $40,000 to $50,000 deposit to begin with.

    What areas do people suggest?

    I have been looking at making sure I buy something so I have 20% deposit with a good cash flow.

    I am only new so really hoping to learn and take on board accurate and positive information so I can create a strategy that will work for me.

    Been looking at Brisbane and Adelaide as a starting point as rent seems to be higher than mortgage repayments so will not affect my family's everyday life much.

    Any info or help would be fantastic.

    Cheers
    John.
     
  2. Sonamic

    Sonamic Well-Known Member

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    Welcome to the forum John.:D

    Read. Read. Read. Endless supply of knowledge on here to arm yourself with. Unfortunately nobody is going to say "buy a house in x suburb with your 50k". In saying that, Brisbane and Adelaide are not bad spots to start looking.

    Best of luck with your journey.
     
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  3. Perthguy

    Perthguy Well-Known Member

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    158, D.T. and JohnHalas like this.
  4. Darren

    Darren Well-Known Member

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  5. Biz

    Biz Well-Known Member

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    None. Market is over cooked. Save more and look into something you can add value to maybe in a few years time.
     
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  6. Perthguy

    Perthguy Well-Known Member

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    Perth is not overcooked. But it is not a good time to buy either. :)
     
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  7. kierank

    kierank Well-Known Member

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    Welcome to PC @JohnHalas.

    As @Sonamic stated, it is very unlikely that anyone on PC will tell you to buy a property in this street or this suburb.

    For example, my strategy would never allow me to buy in Adelaide while many on PC will spruik Adelaide. Neither of us are right or wrong; we just have different investing criteria/approaches.

    We are different because of age, income, knowledge, experience, available time, risk appetite, values, beliefs, ... (the list goes on and on).

    As @Sonamic advised, read this Forum. There is so much knowledge and experience built in the threads of PC, it can be a little overwhelming for newbies. That is just the way it is.

    By reading posts, you will find some members who are aligned with you. If you want to tap into them, PM them - I find most will welcome your approach. If they are in Sydney, they might even suggest a meet-up over coffee. I have had coffee meetings with a number of members in Brisbane and in Melbourne.

    That other thing I would suggest you do is to attend the Sydney catch-ups. If they are like the Brisbane ones, it is hard to pull yourself away from them.

    No-one on PC is going to take responsibility for your IP journey. Only you can do that!!! You will need to develop your own strategy, break it down in executable plans, etc, etc.

    The good thing about PC is that you are not alone BUT you have to do it :) :).
     
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  8. TaylorChang

    TaylorChang Well-Known Member

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    Welcome to the forum.

    If I was going to start again to build up my property portfolio. I will write down what things I am good at and what makes me happy to do it over and over again.
    I think this is very important especially if you want to build up a big portfolio.
    Building up a property portfolio takes times. ( years)

    Then read different people's strategy and see what is the best suitable method for you to building up your own portfolio.

    Some people may have building/tradies background or connection. They can easily lower the cost of building/reno/construction bill. Then it will be feasible to buy a property nearby you and do the reno, sell or extract equity then go again.

    Some people have connection with real estate agents eg. their family member/friend works in the industry. They are able to access good deals before the property release on the market.

    Enjoy your journey.

    Good luck :)
     
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  9. RetireRich101

    RetireRich101 Well-Known Member

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    Perth is raw to medium....and some people like their steak like that..
     
  10. HeavenlyThang

    HeavenlyThang Member

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    Rookie to rookie :) From what I have read, strategy the key :) How are you going to build a property portfolio, have it grow and make $$$ ? Work that out, plan and execute!
    Xx
     
  11. jins13

    jins13 Well-Known Member

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    Sorry to say but you also need to factor in stamp duty as well to the amount. It's good that you want to grow your wealth but need to save more.
     
  12. wombat777

    wombat777 Well-Known Member

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    Have a rethink on whether this is an essential criteria. A sweet spot deposit is around 12%. At this level you're still paying lenders mortgage insurance (LMI), however the LMI premium only starts to really kick up once you hit a Loan to Valuation Ratio (LVR) of 90%.

    This strategy allows you to start with a slightly smaller deposit and therefore start investing earlier.

    Assuming a $300,000 purchase your deposit would be $36k. You then need sufficient funds for stamp duty, legals, building inspection and other purchasing costs. In QLD you would need about $10k for stamp duty plus a $3k to $5k to cover the other costs. Budget another $5k to $10k for costs to bring a property to a rentable condition ( may need some maintenance, painting, etc ). Any left over funds can be a small buffer.

    About $60k is a minimum budget needed for a $300k purchase.

    If looking for cashflow positive, aim for yields 6% or above if you can find it. Interest rates are said to be on their way up ...

    Make sure you focus on areas with vacancy rates preferably below 2%.

    As suggested - go to a Meetup!!!! You'll learn more in one night by talking to investors than you have in months.
     
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  13. Ace in the Hole

    Ace in the Hole Well-Known Member

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    Hi John and welcome.
    It's going to be really, really hard to build a significant portfolio from where you are now.
    Hope you're one of the few who make it.

    My only helpful advice would be - outwork everyone and be relentless.
     
  14. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    We (Property Twins) started with 40k at 24 years of age. It's not easy. It's hard work. Unless you have a lot of equity help from somewhere I'd say it's fairly challenging to do it in a short period of time. With the lending environments changing, it's even more difficult than before.

    Biggest lesson personally was to structure finance right from the start. It can cost a lot.

    It's good to have a vision for what you want to achieve.

    As Ace in the Hole says, work hard. Don't take no for an answer.