New and loving it here!

Hi everyone,

This is my dream forum! My god. The people here have the same outlook as me and the information is gold.

I’m looking to purchase my first IP in jan 2022 and I’m very happy I’ve found this site to absorb info before then.

I’m looking to hire a buyers agent. I’ve read Lloyd Edge’s book Positively Geared and have been in contact with him. I’m wondering if there’s anyone that has had dealings with him and if they are able to inform me of their experience.

Alternatively, is there another buyers agent you could recommend?

Is there a section in the forum that reviews buyers agents and other professionals within the industry?

Jake

 

What are your property goals?

What makes you interested in PG properties?

 

There’s no ceiling to PG or Neutral Gearing. I like the idea of set and forget. Banks also like to see a PG or Neutral geared portfolio because (as you would know) negatively geared properties drain your cash flow. I only earn 55k a year (in a job that I love), so having to supplement negatively geared properties from my wage would lead me to hit a borrowing ceiling very quickly.

I want to buy property in a way that allows the portfolio to grow in the most passive way possible.

i.e.
- high rental demand
- manufacture equity (to allow me to purchase another property in a timely fashion)
- potential for good capital growth

Building a portfolio in this way will eliminate a ceiling to the size at which I can grow my portfolio.

PG properties will also simply allow me to sleep at night as it provides me with an additional margin of safety. If I lose my job or something else happens to me financially, the buck doesn’t simply stop with me. Not only will I have renters to cover the costs, but I will also have an emergency fund to cover an absence of renters. This emergency fund will be easier to maintain with a healthy cashflow. Cashflow is the grease that smooths out life’s rough edges.

I’d like to build a portfolio that provides 100k income per annum after tax. I’d ideally like to build this within 10 years. 15 years tops.

I’m 30 and my dream is to be financially independent by the time I’m 40.

The simple things in life give me the most joy. I’m not a materialistic person in any shape or form. I am very happy and comfortable living a modest life, but I strongly desire to live it on my terms.

I want to be able to do what I want, when I want with who I want.

All I want from property ultimately is peace of mind and freedom of my time…. Also, to have a bit of fun with building the portfolio along the way too

 

You ‘know’ way too much about property for someone who has never bought any. Thats not a compliment. Most of what you think you know is wrong. Have you ever talked to a bank or mortgage broker about borrowing money or know what the assessment rate is?

Suggest you forget what you ‘know’ for now and just read. Many people here have done what you want to do. The reality is a lot more complicated that whatever book you read.

how much deposit and other assets do you have to work with with that 55k income?

 

You come across a little passive aggressive there. Especially that last line of yours. Play nice .

I will admit, the bulk of my knowledge comes from reading Lloyd Edges book Positively Geared. I am more than happy to be told the information in that book is incorrect and to be set straight.

Currently I have a portfolio of index funds and bitcoin. Im looking to get the ball rolling with the first IP in January. By then I will have anywhere from 85k to 110k to invest in property.

 

I suggest you read different sources to get a more comprehensive understanding of building wealth through real estate.

You're making a great start however some of your beliefs aren't actually reality. It's probably because you have a limited understanding which is normal when you're starting out. Anyhow keep expanding your knowledge and engage with like minded folks on the forum.

Best of luck

 

… and yes. Spoke to mortgage broker in January. One that Lloyd forwarded me to. I’d have to find the email if you’re wanting numbers, however I’m going to assume the numbers are out of date.

 

Some other books if you're interested.

Michael Yardney, How to build a multi million dollar property portfolio

Jan Somers More Wealth from Residential Property

Margaret Lomas How to achieve property success

Margaret Lomas How to Create an Income for Life

I buy Houses, Paul Do

20 must ask questions, Margaret Lomas

 

Can I also suggest to engage contacts separate to lloyd. It's very possible a conflict of interest exists. I can't say for sure but you'd want to be very careful there.

 

Any suggestions on what is good to read? I’m here to learn. If you say my knowledge is limited, then I’d like to obviously change that haha.

When you say some of my beliefs aren’t reality, which beliefs are you referring to? Will only be enlightened and learn with specifics.

 

Legend Sackie! Much appreciated. I will read every one.

… and with regards to Lloyd referring me to the mortgage broker, I completely agree. I had the same concerns. Very weary of kickbacks instead of genuine intentions when dealing with professional networks.

 

Specifics? Telling someone they’re wrong without being specific offers no learning opportunities. I came to this forum to learn.

If I’m wrong, it doesn’t phase me…. Not being corrected is a different story.

 

Welcome Jake! Keep reading this forum and you’ll be fine. As to Lloyd Edge, I have no idea about them, but agree, using a mortgage broker connected to the buyers agent who you know little about may be problematic. This forum has many great mortgage brokers, keep reading, you may feel like connecting with one of them based on what they write.

 

You are going to be very limited in what you can afford. With your income you'll hit a financial brick wall borrowing somewhere between $300k & $500k. Buying positive cash flow properties is not a solution. The banks criteria for 'neutral' is a rental yield of about 12% on the purchase price, in most cases you'll do well to get a 5% yield.

Your goals are achievable but you'll need to increase your income and likely accept that it will take a lot longer than you expect.

 

I haven’t mentioned it, but my wife earns $60k pa. Does that make a difference to the numbers just quoted?

 

Your combined income is still on the low side. If you can find jobs you like that pay more, I’d look for that.

 

So a couple earning a combined total of 115k per year with an initial deposit of 85 - 110k can’t build a property portfolio?

Our expenses are extremely low. We live modest lifestyles and have decent disposable income considering the wages we earn.

 

Best case it might double the figures.

Here's an exercise. What a property portfolio needs to look like to earn $100k per annum after costs...

Outside of the loan, your holding costs will be about 30%. This means you need rental income of about $140k with no debt.

If we assume a 5% rental yield, you'll need a portfolio worth at least $2.8M, debt free in today's dollars.

First you need to acquire a portfolio worth about 25 times your household income, then you need to ensure it's debt free. Keep in mind that lenders get nervous when you borrow more than about 6 times your income.

Also keep in mind that 5% is a very strong yield. In most of Australia you'll be lucky to find 2.5%.

It can be done, but at this point you'll likely buy one IP (perhaps two) and hit a serviceability wall.