If you were me... What would you do?

Hi @Gockie, I had the townhouse re-valued at 600K mid last year and I pulled out the equity to add to my deposit for the PPOR. I then bought the PPOR as an investment for bank/settlement purposes and "changed my mind" the day after settlement and applied for first home buyers You've got me all sorted, I do plan to turn the PPOR into an IP at some stage as it will be positively geared. Thanks for the kind words and re-enforcement I am on a reasonable path.

 

Great questions @jas! I'm really enjoying my profession now and am at a company which is helping me grow and develop whilst allow me some travel opportunities. I would like to spend my money on a single dweling PPOR within the next 5 years within 10km on Melbourne CBD possibly 50/50 with partner. Also some overseas travel within the next few years would be ace. The issue may be cashflow as the townhouse is negatively geared but capital gain is good.

 

I'm trying my best @Bran haha. Started on 45K in 2012 so I've made good progress in 3 years. I am talking Gross (unfortunately), but I didn't include rental income in the 75k figure, just salary. If interest rates go up don't we all cry in a corner?

 

Appreciate the kind words @Steven Ryan, the clear take home message is to have the properties valued so I will send an email to my mobile lender tonight to assess the situation. Its a fine line between putting my efforts into my current role to grow within the business and demand a greater income or look at a side project...

 

All good. I think i was on about 75k at 26. But, seemingly unlike you, I used to blow about $500 on a friday night shouting all and sundry in the bar. After a while, I realised that no-one ever shouted back and I quit it. Sounds like you are ahead.

 

Hope the vals come back well.

The good thing about something on the side, is it can take as little or as much of our time, energy and effort as you want.. the more you get out, the more you can put in

 

From my experience, I'd suggest talking to an independent broker (several have replied on this thread) rather than to a bank's in-house lender.

A mortgage broker can help you with your finance "strategy" rather than just how to finance 1 property that you have in mind. Then, they can help you pick the best lender that'll work for you.

Its at no cost to you and they get paid a commission from the lender you end up using.

 

Also, brokers can order bank vals up-front potentially from multiple lenders before applying for a loan.

 

@srirang makes good points

 

Hi @Leo2413 , very measured approach and your assumption on my goals are pretty accurate! Are there any youtube clips you are happy to recommend? Knowledge is power. Thanks again for taking the time to contribute.

 

Thanks for your input @Hodor. I will contact some of the brokers on this thread as an intial inquiry and see where things go. I think Carlton would stay as my PPOR for the next 1-2 years at this stage. Are you able to please explain the "creating a deductible debt from your non deductible" I am not familiar with this but guessing there is a tax benefit?

 

HI @cmack , youtube clips with regards to property or mindset ?

 

Anything you think may be beneficial for me @Leo2413 (knowing my brief situation above). I'm interested in both property specific and also about the right mindset.

 

@cmack Well since you confirmed that you that your goal is to be a multi millionaire asap this is my personal take on it. You gotta attack it from three angles. 1. Develop the mindset, 2, Learn the property knowledge and 3.Master negotiating.

1. With regards to 'mindset', You really need to (if you haven't already) develop a hunger, an urgency, a kind of obsession with doing whatever it takes (legally) to achieve your goals. You will definitely need to develop a mindset that will be conducive to achieving that goal. I would be youtubing everything Les Brown, Jim Rohn, Brian Tracy, Dr Norman Vincent Peale. Write down key points, philosophies, ideas, themes and start to embody them over time. (Jim rohn first). He is quite unique. He doesn't just teach about the successful mindset, he actually talks about developing the 'super success philosophy' that underpins everything we do. Also the book below is really good imo, buy it if you can.

Jm Rohn 'seasons of life' is a great book on mindset and philosophy of the successful.
https://jimrohn.com/jr140.html

2. All the above will take care of mindset. With regards to property, well I bought almost every book put out by Aussie authors, Michael Yardney, Margaret Lomas, Helen Collier, Steve McKnight, John Lindeman, Pete Wargent, Paul Do. There is massive amounts of knowledge. Many themes will overlap, some will differ in opinions and approach. After going over them you will be able to form your own perspective (something many investors don't have imo) and will avoid many, many of the simple mistakes. Also the stuff will be drummed into your head. Goals, Credit, Due diligence analysis, growth drives, CGvsCF vs balanced, LMI, Cycles, markets, strategies, approaches, risk profile, demographics, some advanced strategies, adding value, traps, finance, clauses, importance of taking action etc etc etc

3. Then onto negotiations: This will save you a lot of money, reduce your risk and bring you to your goals faster. Some good books: 1. Property Investor's Guide to Negotiating (John Potter), 2, The negotiation book (Steve Gates), 3. Secrets of power negotiating (Roger Dawson), 4. Trump Style Negotiation (George Ross).

That's the absolute best advice I can give in 5 minutes. just my 2 cents.

 

It is only worth doing IMO if you were planning to spend the cash on a deposit for an ip and you were going to stay in your ppor.

Simply put you shouldn't, generally speaking, spend cash on an ip while you have non deductible debt. To maximise your tax benefits you pay off the non deductible debt with your cash then reborrow it for investing with a new separate loan.

If you are planning to turn your current ppor into an ip in the next few years I wouldn't use my cash in anyway if it could be avoided.

You need to work out what's best for you. But recycling debt can produce 100s of 1000s of extra deductions long term.

Hope that makes sense.

 

Its always wise to check out any property "gurus" credentials before choosing to learn from them - and I mean checking their portfolio and numbers, past track records etc. Whilst its all very well to have knowledge, a book or a course, not all of them walk their talk unfortunately, and whilst the marketing will show you the successes I am yet to see them talk about someone who did the education and was financially ruined from it. Its important to learn how to manage the down sides, and yes its sobering to focus on the downsides (when you are investing to make money), but its equally as important as learning to manage the profit side.

 

HI @Kate Moloney,

I understand the point your trying to make, just not sure why you quoted my post first....

 

That value of that townhouse in Black rock seems too cheap IMO

 

There are down sides to everything in life, even pretty flowers at the side of the road give people allergies and asthma

 

Depends on your risk appetite.

You could invest in a term deposit at 2.5% or gear up hard and buy a bunch of credit default swaps in Deutsche Bank.

Who knows which one will work out?