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My simple story ...

Discussion in 'Introductions' started by Hodor, 3rd Jul, 2015.

  1. Hodor

    Hodor Well-Known Member

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    ... What else would you expect from Hodor?

    I thought I would post what I have done and am planning to do. There are so many exceptional stories throughout PC and SS that I thought my less exceptional story (I still think its alright) might be useful for some, plus I've never really written much about myself. I first got into property around 2009 through SS after a mate told me to have a look, thanks to everyone who posts as most of my investing knowledge and ideas has roots in these forums.

    I got my first property in Newcastle at the end of 2011 using savings with the use of a BA, this was planned as a short term residence while I did some minor renovations before moving with work as I had just started a new job. I placed a tenant in there April 2012. The purchase price was $319k and currently (mid 2015) rents at $380pw and is valued at $410k.

    Late 2012 saw me meet my now GF. 2013 saw us enjoy ourselves outside of investing while still getting our finances together. She paid off some CC debt, we traveled to Jordan, Africa and Nepal and completed a reno on a 1br unit she had in Wollongong, this was purchased in 2009 and was still in original condition. The reno brought the value up to $250k (early 2015) which was about $50k added for less than a $20k investment, it now rents for $260pw.

    2014 we thought we'd continue on with property, early 2014 we purchased a block of land, again with savings, near Melb which was yet to be titled. The building experience has been interesting and taken longer than I thought, we only just got the keys. On the upside my estimations of expected costs have been within a thousand dollars of actual cost. Gardens will be completed this coming week and a tenant in shortly after. Land + build + stamps + extras = ~$335k I haven't worked out holding costs yet. Expected valuation is ~$400k and should rent for ~$380pw.

    2015 has been exciting, we had our properties revalued for the first time. Using equity from Newcastle we have just signed on our first PPoR (waiting on valuation for unconditional approval right now). Due to work this needed to be in Sydney (great timing I know!) and our budget has limited us to a run down house, which we think has some great potential. The reno's should be interesting, painful and fun.
    Using equity in the Wollongong Property we are also looking to purchase a property in Brisbane this year. We plan to purchase around the Mt Gravatt/Holland Park area, not Logan for us sorry. The idea behind this is to have exposure to markets in VIC, NSW and QLD to maximise/smooth the possibility of CG in any year to support further purchases. It will also minimise land taxes.

    To date we have purchased at reasonably high LVRs (~90% give or take) with the use of LMI. Our plan is to continue purchasing a property a year on average for approximately the next 8 years, the number and length of time will depend on a number of things. Over this time LVR should naturally continue to drop and reduce our LVR. From where we are now we are hoping wages will not be required to fund further purchases. We plan to target "balanced" properties - that is the best prospect of CG we can find in a positively geared property and continue to spread our exposure through different markets around the country. LVR across the portfolio should drop as it grows and our purchasing rate remains constant at about one per year.

    We have a target portfolio size and LVR estimated to be reached in 8-10 years. At his point we will enter a "transition" phase which will see CG focused into low maintenance cashflow generating investments over ~5 years leading to rat race exit. At this point we see the vehicle of choice to be LICs and ETFs. We have a small share portfolio at present to gain experience with share markets over the next 10 years in preparation for this and to confirm its viability when implemented by us. This also acts as a layer of risk mitigation along with cash in offsets.

    Obviously things can change and we may need to adapt to allow for these changes. Our plans aren't the most exciting and results certainly not the most impressive achieved. We are happy with our goals and progress so far and will hopefully update you all in the years to come with the highs and lows.

    Any questions, comments and feedback are more than welcome and encouraged.
     
    Last edited: 3rd Jul, 2015
    Jingo, S1mon, jafeica and 2 others like this.
  2. Eric Wu

    Eric Wu Mortgage Broker Business Member

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    well done
     
  3. blackenator

    blackenator Well-Known Member

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    Awesome Journey love to hear about peoples investing journey
     
  4. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Thanks for sharing your story :)

    You're doing REALLY well. Nice work.

    I like Mt Grav/Holland Park too. I think you’ll do well panting some capital there.

    I'm curious. How would you describe your household income? You seem to have done plenty in a short space of time!
     
  5. Hodor

    Hodor Well-Known Member

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    Thanks for the positive feedback.

    Prior to finding some structure from the forums I had about $40-$50k saved knowing I would like to invest, in '09 and '10 I was earning just over $40k PA, in '11/'12 financial year with a career development and overtime I was on around $60k. Now we are DINKs things are pretty good wage wise and we are both approaching 6 figure incomes with some overtime, neither of us has expensive tastes other than travel but we certainly don't scrimp if we want something either. I would say our wages are good, especially when combined, but not exceptional. Not sure what others would say?

    I was surprised we could get a loan for a PPoR while not getting rent from the new IP which is not tenanted yet. Once it is occupied it'll be off the the broker for $$$'s to get QLD happening. I must say our broker has helped a lot and ensured things have run smoothly.
     
  6. Befuddled

    Befuddled Well-Known Member

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    HOOOOOOOOOODDDDOOOOOOOOOORRRRRR

    Sorry, couldn't help myself.

    Well done. Steady as she goes

    Just be mindful that mt grav/holland park area has moved significantly already meaning yield has dropped. Watch your cash flow if you decide to invest there
     
  7. jpcashflow

    jpcashflow Well-Known Member Business Member

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    Melbourne
    Well done keep up the good work love hearing people do well !!!
     
  8. Hodor

    Hodor Well-Known Member

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    I know! I actually had a property I was planning to purchase but didn't move fast enough on the refinance and it sold as good properties tend to do. Original plan was QLD IP then PPoR but things got reversed after I missed it and a suitable property for a PPoR became available.
     
  9. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Nice one. Pretty rapid income rises along the way.

    In terms of what others would say, depends entirely on who you ask. From memory, the approx MEDIAN individual full time earnings in Aus are under $60k, and AVERAGE is a click over $80k (which naturally, includes everyone pulling > $500k a year to grad the figure up).

    Sounds like you have a very solid foundation to work from. All the best on continuing what you've started :)