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Discussion in 'Introductions' started by --Michael--, 14th May, 2019.

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  1. --Michael--

    --Michael-- Member

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    Howdy Team,

    My name is Michael and to be honest, I don't really live the life, I want to live. I would like to become financially successful or even better a multi millionaire. I have no direction of how to achieve this though. I have about $300,000 in the bank and I really need to plan what do with this money as what ever decision I make, will affect me for the rest of my life. This decision will determine what kind of life I will live in the future, whether it be successful or not. I received a rough estimate from a bank for an investment loan and I can borrow a $1,000,000 with my parents going guarantor. Some ideas I have come up with are:

    - Buy a block of units.

    - Develop Units.

    - Buy a double block and build two houses.

    I have no experience in building/developing.

    Team, what do you think I can do with $300,000 in cash or a $1,000,000 bank loan?

    Thankyou for your time
     
    BuyersAgent and Property Twins like this.
  2. Property Twins

    Property Twins Finance Strategists Business Member

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    Hi Michael

    Welcome to PC.

    Depending on your goals, you could look at 2 x $600k properties, 3 x 400k properties, 1 expensive properties etc etc

    OR more....

    A lot of ways to skin the proverbial cat.

    Just depends on your ultimate goal, your risk profile - where you are in life.

    What's attracting you to development?

    As a starting point read up PC to educate yourself
     
  3. Trainee

    Trainee Well-Known Member

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    How old are you?
     
  4. --Michael--

    --Michael-- Member

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    My parents have a couple old houses. These houses will have to be removed eventually and I thought maybe I could build something on the land there.
     
  5. --Michael--

    --Michael-- Member

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    Early 30's
     
  6. Sackie

    Sackie Well-Known Member Premium Member

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    Imo it all starts with your financial education and mindset transformation. If real estate is the vehicle you want to use to build wealth then learn as much as you can about it from books, pod casts, the forum etc. Then identify clear goals and timeframe. Then, develop a plan and choose a strategy. So for me it would be.

    1. Read up on success mindset traits and habits and start to embody them.
    2. Choose a wealth creation vehicle and learn as much as you can about it so you have a basic level of competency at least. (1 and 2 and be done in tandem)
    3. Identify goals you would like to achieve and timeframes.
    4. Identify a strategy to get you towards your goals.
    5. Put it into action.

    I have read many autobios of successful people and all of them had a very similar process. Transform your mind. Learn your subject matter. Develop Goals/strategy. Take Action.

    Good luck
     
    --Michael-- likes this.
  7. Trainee

    Trainee Well-Known Member

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    Why do you think you can build / develop successfully?
     
  8. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Hi Michael, welcome.

    Seems a bit personal, but how did you come by the $300k - savings? Inheritance? It seems nosey, but someone who saves $300k is a different person than someone who, through luck, ends up with it.

    What are your skill sets and interests?

    What's your risk appetite like?

    How active do you actually want to be?

    Do you get stressed easily, or are pretty resilient?

    Do you love research and due diligence?

    Property development is not for the faint-hearted so make sure it fits with who you are as a person - there might be other ways that suit you better. Or there might not! But good to ask yourself the important questions before you dive in.
     
  9. Morgs

    Morgs Well-Known Member

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    Welcome to PC

    I would agree with most of the sentiments above - there is a trade off between risk and reward.

    Building wealth through property quickly requires a different capability and active methods like developing. Make no mistake for first timers without the right experience this is high risk and if you don't manage it properly an easy way to turn a fortune into a smaller one.

    Contrast this with investing in lower risk passive options for the long term. It isn't glamorous but with commitment it'll get you there through time.

    I started with self education - books like Rich Dad Poor Dad teach you to develop an investment mindset and the more you can hone this the better a handle you'll have on what to do next.
     
    --Michael-- likes this.
  10. The Y-man

    The Y-man Moderator Staff Member

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    Hi @--Michael--

    That's a hell of a lot of money you got stashed away there.

    If you are early 30's and got to this point under your own steam, then maybe just keep doing what you have been doing?

    As with some of the posts above - "more info needed".

    The Y-man
     
  11. --Michael--

    --Michael-- Member

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    At this point in time I cannot build / develop successfully as I have no experience in this field. Its just and idea at this stage.
     
  12. --Michael--

    --Michael-- Member

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    I worked hard and saved my money.
    No skill sets for property. I have all kinds of interests.
    Probably more passive
    I'm more resilient
    I do research
     
  13. --Michael--

    --Michael-- Member

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    Thanks Y-Man, I'm actually disappointed in myself. If I had been smarter 10 years ago I could of had a lot more now. I also missed out on the property boom on the east coast as well as not realising the potential in 2012 to buy USD when our dollar was so strong.
     
  14. The Y-man

    The Y-man Moderator Staff Member

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    Question - how much per year can you live on (*reasonably* comfortably)?

    The Y-man
     
  15. Cate Bell

    Cate Bell Well-Known Member

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    I wouldn't be so hard on yourself, no one gets it right every time. I started off with a reno 30 plus years ago, and still buy and renovate. Perhaps starting with a smaller project such as a reno, in some areas there is good $ to be made.
     
  16. --Michael--

    --Michael-- Member

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    $52,000 net
     
  17. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If I were you, I'd keep your parents project up your sleeve, and cut your teeth on some smaller retain and build developments. Do a couple of those to get used to the process, and then look at your parents project.

    Don't feel like you need to go all-in on the first go - unless of course, you love stress and losing money ;)
     
  18. The Y-man

    The Y-man Moderator Staff Member

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    I am not quite sure how to articulate this.... I think I get where you are coming from.... but I feel you are pegging too much on the money you have (again, I get you worked hard for it) and this supposed "life changing decision" on how to use it.

    The "life changing" or "rest of my life" decisions IMHO is not around what you invest in, and certainly not around a particular project, or what to do with $300k.

    Personally, I think you have already made the life-effecting decision - you set a goal that is S.M.A.R.T. and you are now thinking of strategies ("how").

    Beyond this point, unfortunately it is a hit and miss game ~ often 3 steps forward, 2 steps back.

    IMHO, this looks like a 95% likelihood of losing significant portion of your net worth.

    Just throwing ideas around, why not shares or REITs?

    The Y-man
     
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  19. Trainee

    Trainee Well-Known Member

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    You have to realise that investing is a process. Over years.

    You cant make one decision and it all works out. You need to make constant investment decisions. You havent, so far. Start now. Even if its just reading a few books.
     
  20. --Michael--

    --Michael-- Member

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    The people I have come across who have invested in shares, lost money. I'm really out of my league on shares, REITs, bonds.