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Greetings from Melbourne

Discussion in 'Introductions' started by Late_Starter, 24th Jun, 2016.

  1. Late_Starter

    Late_Starter Member

    Joined:
    24th Jun, 2016
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    Location:
    Melbourne
    Hi Everyone,

    After many years (easily 10) of loitering around forums, reading books and magazines and thinking about investing, I have finally committed to starting our property empire! I say our, as it's my wife and I on the journey together.

    The dream would to be to pay off our PPOR in 10 years (25 currently), then ideally, not too many years after that, be able to support me saying, "screw you guys, I'm going developing". Managing my portfolio from a beach somewhere, well the beach may only be a couple of weeks a year, but the rest needs to happen.

    So where are we now? After raiding the equity piggy bank a couple of times to pay for a couple of bathrooms, we have enough left to by a $300k IP @ 80% LVR. I'm on here to learn as much as I can, find an amazing broker (preferably someone in Melbourne), attend some meetups (already joined one for next week) and find some people that are happy to help me on my journey and answer the eleventy million questions that I will undoubtedly have.

    Thanks in advance

    Shane
     
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  2. Mumbai

    Mumbai Well-Known Member

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    For starters, I would 'stop' paying off the PPOR aggressively to 'start a property empire'
    Do you have an IP already? The 'couple of bathrooms' you did with the equity, were they on your PPOR or IP?
    BTW, welcome to the community
     
  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Welcome Shane - better late than never :)

    If you'd like a decent portfolio, you may like to consider using a 12% deposit rather than 20%, and keeping some powder dry for IP 2.
     
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  4. Late_Starter

    Late_Starter Member

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    Location:
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    Thanks Jess. Definitely better late! I have seen 12% mentioned quite a bit on the forums, is there anything special about 12, why not 10, or 14? I definitely want to set myself up right from the beginning.
     
  5. JacM

    JacM VIC Buyer's Agent Business Member

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    Welcome Shane. I see you're coming along to the meetup next week ... we'll start straightening you out ! Some smart buying with that first IP that enables you to build some rapid equity quickly will be key.
     
  6. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    is the sweet spot for LMI - it gets significantly more expensive at any lvr higher than this.
     
  7. Late_Starter

    Late_Starter Member

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    Nice, that's very handy to know.
     
  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Not only the sweet spot for LMI, but it's also about the most you can get for the majority of lenders on an investment property.
     
  9. Late_Starter

    Late_Starter Member

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    I was testing CBA during the week to see what they would give me and they quoted me 95% on a $500k property, which included a 3% allowance for LMI. I don't want to spend this much, but it was just an example.
     
  10. MTR

    MTR Well-Known Member Premium Member

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    Welcome Shane
    I reckon screw them in 3 years time and go developing... :p..............
    ...... so you want to do this in Melb, read thread on 4 townhouse development ..... and plenty of other threads under this section for some ideas/insights
    https://propertychat.com.au/community/threads/4-townhouses-development-melbourne.7783/

    All the best
    MTR:)
     
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  11. Late_Starter

    Late_Starter Member

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    Thanks for the welcome MTR, I actually read your development thread today. Learnt heaps. I was surprised at how cheap the build was, although I don't know why I was surprised, considering you can get a volume house for well under $200k. There was one question I had, what was the upfront cash required for the project? Obviously you had four units, but I am trying to work out if I was to give developing a try at some point, how much cash do I need.
     
  12. Late_Starter

    Late_Starter Member

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    Thanks Jacqui. Rapid equity building properties, I'll take 10 thanks!
     
  13. MTR

    MTR Well-Known Member Premium Member

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    Its dependent on a couple of important things, one is the lender and what the bank valuation comes in at. If you can score resi loan which is what I did then you are looking at around 20% of the overall build, however you need to include and have available funds for holding costs during the building process, allow 10 months and any other items that fall outside of the building costs ie demolishing, council/infrastructure costs.

    I used RAMS for this project as I had an issue with servicing debt at this time, that was a lo doc loan, which meant my accountant signed off on my income. Now that is another story, you can read my post on this. Keep researching plenty of info on PC.

    Hope this helps.
     
  14. Late_Starter

    Late_Starter Member

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    Thanks! Yes reading, reading, reading and attending a PC meet up next Thursday. I want to be as informed as I can be, when we buy our first IP.
     
  15. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    CBA will but servicing is tougher over 90%. Other lenders will too but lmi is expensive.
     
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