Hello from Kellyville, NSW

Hey all,

Completely new to the whole property investment thing, but looking to learn and buy our first investment property sooner rather than later.

A bit about myself:
- Im 29, married with one child.
- We have a property within 400m of the new and currently being built Kellyville train station. The bank owns a bit under half of it so have 'some' equity.
- We have been pre-approved for up to $690k (including stamp duty etc) for an investment property.

Our goals:
- Build a portfolio that will give us a bit more freedom when it comes to our 50's (20 year time frame).

Currently looking at a few units in and around Brisbane, but also places closer to home. Really not sure on whether to buy a unit within the heart of the city, or buy a house (and obviously land) out of the city, but as close to.)

I have been using realestate.com.au religiously for the past 3 months (their 'invest' tool is handy), and reading up on heaps of articles and what not to a point of getting confident that we want to take the risk and go for it.

Was thinking to myself this morning 'I wish I knew someone who was into property investment', which is when I searched for forums. This one looks awesome and will likely spend many hours on this.

Hopefully learn a lot and somewhat contribute one day.

Mike

 

G'day mikey. Welcome to the hood

Keep using re.com.au it's a great resource to point to in the right direction

You may been able to get some more wriggle room out of broker assessing your situation.

Plus you'll need to work out your own finances and what you're looking for, cash flow pos/neg? House unit, then narrow down some areas as a rough start.

Keep reading and work out what you want

 

Welcome, looks like you have got yourself into a great position to launch into investing.

Not how you got your pre-approval or who through. As it is a common theme however and if dealing with a bank directly they will try and cross collateralise your loans, I'll suggest that you speak to a mortgage broker.

Having flexibility with your loans and maximising tax deductibility are things that go a long way when you are trying to grow your portfolio

 

Absolutely. Don't rely on the bank to structure you correctly, because almost invariably they won't. They'll even sometimes tell you there's no other way to do it, but that's actually not true.

 

Be aware of the forces of supply and demand in property. You mentioned Brisbane units as something you are looking at. Do thorough due diligence as there can be certain oversupply issues in particular markets. One of which may be present in the Brisbane unit market. Just a thought.

 

Welcome @mikey7, you’re in the right place

Great to know you have equity to start your investment portfolio.

Units in Brisbane–probably not a great option, mainly due to enormous oversupply, especially in the CBD and surrounds. Houses look to be much better value. For context, exactly 0% of my clients investing in Brisbane have purchased units. 100% have purchased houses.

Agree with @Hodor and @Jess Peletier. Getting your finance structured correctly from the get-go is important. I went direct to the bank when I was starting out – costly error.

You’ll learn heaps on the forum, so keep reading, posting, asking and contributing.

 

welcome @mikey7, this is the best place to learn about property investing. Check out the meetups section as well, Skater schedules a meetup at Wenty every 2 months so, if you want to meet the other forumites in person.

 

Hi Mikey, welcome aboard.
Sounds like serendipity.

 

Hey Mikey.

Your plan sounds exciting.

 

I'm currently in the final stages of refinancing my PPOR through Pacific Mortgage Group. They've offered a variable interest rate of 3.94%.

The pre-approval is also through them, but at a rate of 4.19% (as it isnt PPOR).

I've been reading everywhere that a broker is the way to go, so I might do just that. Hopefully it won't be an issue having my PPOR in PMG.

The guy I have been dealing with is supposedly a broker, but recommends PMG for most of the options I have spoken to him about. I'm thinking I speak with another broker for additional info.

You know what - since spending a few hours on this site, I've come to the conclusion that Brisbane units are no longer on the table for us. The oversupply looks like it will only get worse, and the more I learn, the more I believe houses for IP's would be great.

Looks like I'll be doing the same. Just need to determine where, how much and how many.


What are the best strategies? I know everyone has something different, but my current thoughts based on readings, are:
- Buy 2x houses around the $300k mark somewhere in Brisbane (not sure where yet, but compulsively researching)
- Generate some positive cash flow
- Hopefully generate more equity in these IP's to then purchase a third and so on..


In terms of financing (which I honestly haven't done much research on yet).. the way I'm feeling it works is similar to PPOR?
My idea of it:

IP1 attached to offset1
IP2 attached to offset2 etc..

Rent from each IP goes into that correlating offset (with top ups if needed from personal account for expenses/maintenance or if negatively geared.)

Slowly reading.. just so much

 

I have dealt with a "broker" that a bank provided before. When I asked to not cross collateralise his response was that he has been in the business for over 20 years and that there is absolutely not disadvantage in it. The bank's interests are at the heart of what they do not the clients.

I have no idea about PMG, their rates certainly look good at a glance and for all I know they are ideal for your situation. As above there are other considerations and my experiences haven't been great dealing with internal type brokers, a good broker with a proper panel of lenders will be much more likely to look after your interests

 

A couple of key questions you might ask your broker - What's the cash out policy - is there a maximum? what's the proceedure to extend IO terms? Will you x-coll my loans? What are the charges to fix/split/otherwise adjust my loan?
Do you know how to structure this in such a way that the ATO is happy? If you weren't recommending PMG who would you recommend?
That's a reasonable start and will give you some idea about his proficiency with investment lending.

 

In their defence, a lot of staff inside banks simply don't know what they don't know and believe they've giving the best advice. Often, they're just viewing the world through a pinhole.