Join Australia's most dynamic and respected property investment community

New Starter

Discussion in 'Introductions' started by tomlloyd, 19th Jul, 2015.

  1. tomlloyd

    tomlloyd Member

    Joined:
    11th Jul, 2015
    Posts:
    8
    Location:
    Sydney
    Hey All,

    I'm looking to get into my first property in the next couple of months. Have a decent amount of cash saved and fortunate to have parents willing to offer a bit of assistance as well. I can't really afford to buy a PPOR within a reasonable commute of my work in Sydney, so looking further afield to get a foothold in the market. I figured a property would be a better idea than blowing my savings on a car etc. Finding the whole process of getting started a bit confronting, but hoping to get over the hurdle of my first property, which should hopefully make the process easier for subsequent purchases!
     
    Bryan Loughnan and bob shovel like this.
  2. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,576
    Location:
    Adelaide, SA
    Hi and welcome.

    If you have decent cash saved up but not enough for where you want - consider this idea

    1. Buy a cashflow positive property (in metro Brisbane or Adelaide or regional if you've done your homework)
    2. Use the positive cashflow along with as much salary you can muster (or whole salary and live on partners if you have one) to pay it down best you can for 12-18 months
    3. By then, the property will be worth more (CG) and the debt will be less (equals equity from both angles)
    4. Use equity as deposit to buy what you want in Sydney. Sydney is at the peak so maybe cooled by time you buy.

    Alternatively, keep saving more until you have enough for the place you want in Sydney. But I think the time this will take will be similar to the above, only you'll end up with 2 properties instead of 1. This will help you with further investing down the track.
     
  3. wombat777

    wombat777 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    1,413
    Location:
    33°41'24.7"S 150°55'34.3"E
    Sounds like you are off to a great start!

    I wish I had my priorities right when I was much, much younger.
     
    Bryan Loughnan likes this.
  4. tomlloyd

    tomlloyd Member

    Joined:
    11th Jul, 2015
    Posts:
    8
    Location:
    Sydney
    I'm in two minds...I'm probably not going to buy in Sydney. I lived in Brisbane for a year, so I have some familiarity with it and am happy enough to buy there. I am torn whether to aim at a CG property first up, cop the out of pocket expenses, and scrimp and save to get a deposit/refinance to use some equity to buy a CF+ in a year or so to mitigate the negative cashflow on the first. Other option is buy a CF+ place first up, again and save with the extra income and look to buy a CG oriented property in a similar period.

    I have a bit of sympathy for the view of people like Yardney and Pete Wargeant of buying within 5km of CBDs...I can probably manage a 2 bedder in somewhere surrounding Brisbane CBD. In Sydney, that is completely out of the question, and even the Parramatta surrounds would be pushing it on my budget.

    I'm probably a way off buying a PPOR at this stage, so if I have to wait to buy in Sydney for some time it doesn't really bother me.
     
  5. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,372
    Location:
    Somewhere in the land of Oz
    Welcome Lloydy! Good game plan, now just read every thread and you'll be on your way. Go back to SS and read the interviews, plus heaps of threads there

    Find a broker, see how cashola you'll have to play with. Look into buyers agents to help guide you through perhaps.
    Then you can work on strategies and world domination and what not ;)
     
  6. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,726
    Location:
    Sydney
    Welcome mate.

    I have found that one of the best ways to reduce the fear of starting something new and unknown is to increase your knowledge via books etc of that thing. As your knowledge of property investing increases, your fear/apprehension etc will start to decrease in an inverse relationship after some time. just my opinion.
     
  7. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

    Joined:
    19th Jun, 2015
    Posts:
    1,224
    Location:
    NSW
    I'd always by the CG property first and rather than scrimp & save to get the next deposit, use the equity from the CG on the 1st IP as a deposit for the 2nd......and so on. Tax man will help somewhat on the negative cashflow on IP #1. You could also buy a cheaper but good CG IP#1 and do a low cost cosmetic reno to add value & increase rent to get going faster too.
     
    Leo2413 likes this.
  8. tomlloyd

    tomlloyd Member

    Joined:
    11th Jul, 2015
    Posts:
    8
    Location:
    Sydney
    Leo, been grabbing every book I can find, scouring the internet, and lurking here and in the SS forums, as I agree with what you are saying totally.

    Propertunity, that was the way I was leaning too, as I figure a year of decent capital gains can add up to quite a bit of money, which will give some potential to refinance. Conversely, it never seems particularly hard to find places with decent yield, so when I get a second deposit going, it shouldn't take too long to find something suitable.
     
    Leo2413 likes this.
  9. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,726
    Location:
    Sydney
    @tomlloyd Mate if you keep doing that and study all the material, then formulate a plan and strategy to move forward, imo your gonna put yourself with the 1-2% of top property investors. Then all you have to do is take action when ready.

    Don't forget mindset development. Its huge, imo. If you ever have 35 mins to kill, watch this

    Well done mate!