How much income do I need to generate for +100 properties?

Hey guys,

Hoping you can help, as this will help me ascertain my income goals.
If a person wanted to build a portfolio of +100 properties, at 80% LVR, and continue to keep buying properties:

• What income would he/she have to be generating from either their PAYG income or own business, for lenders to continue to loan them cash?
• Do banks/lenders favour cash savings or equity in existing property, to use as a deposit?
• At what point do I have to start reducing my debt?
• What sort of yield would the overall portfolio have to be generating?

I've been told by a few people the figure would be around $150K - $180K p.a.
Is there a golden figure?


Cheers,

Taku

 

100 x $200k renting for $300pw or 100 x $650k renting for $600pw?

 

Good luck trying to get finance for that size portfolio at the moment
100 Properties @ 300k each..Only 30 Million Debt Chicken feed!!

 

Good point @D.T., thanks for raising that up.
I'd say more around the first scenario:
100 x $250-$350K

Not sure what sort of yield though, that's one of the questions I'm trying to find out.

Cheers,

Taku

 

But it's been done before, and it'll be done again, on numerous occasions.
So it must be possible.

 

Agreed it may still be possible to achieve this size portfolio but and there is a big BUT getting finance would be a massive hurdle.
Would be interested to see a real life simulation on a purchase plan done by a few of the Brokers and see what the borrowing capacity would max out at..
Examples of maybe a high DINK couple on say 250K combined

 

Depends on how long you'd expect it to take also.
The faster you want to do it, the higher your income would need to be.
If you wanted to do it right away, your example would need at lease 6 mil for the 20% deposits, then costs, then enough extra cash flow/capital for lenders to be happy.

 

Thanks for the feedback @Rolf Latham
True… I'm sure it would be incredibly rare for someone to do this from purely a PAYG income stream.
Although are you suggesting it would require $1million gross income from PAYG to get there?

 

That would be awesome.

 

I think there's lots of variables involved, especially the timeframe it's done within. Eg if properties had gone up, this would become new equity and therefore new deposits for new properties. From your work/biz/rental income, you may also be able to recycle some debt and reuse it again.

So if you're saying within 10 yrs, you'd probably need extremely good luck / contacts / income.

Or if you're saying over a lifetime, a little less so.

 

Very true. And I thought this question would come with it many variables, so it would be difficult to get a definitive answer.
It would be within a timeframe of 10-15 years.

 

I think though you could do a base line for this example and include-

PAYG Income Increase +4%
Property Growth +6% PA
Ave Property Price 350K
Ave Yield 5%

List would include depreciation benefits etc into calculation also.

 

Coota - in an ideal scenario you'd be able to enter those things as variables into a function.

Calling @devank the elite data modeler

 

Actually, that would be an interesting exercise.

 

Agreed that there would be many many variables but think it would be interesting to see.

Hopefully with all the great PC minds here someone will smash it out...unlike this bloke

 

I just LOL'd so hard - this can't be real can it???!

 

I'm going to give this thread a nomination for the, "Most open ended question to answer of the year," award.

Depending on how the solution is implemented, the answer is somewhere between $0 and "A lot".

 

I would probably concentrate on the amount of passive income instead of the number of properties. For example, if the goal is to generate 300K net passive, does it matter if it comes from 10 properties or 100 properties?

 

Buy a 50 room motel and you're halfway there!