Property investing strategy - professional planning and advise

Ps I am not a professional planner just a "mum and dad" investor.

 

just showed you how to do it . This is what my business does
Been there . Done that. Bought the T shirt!!

if you have $1million available to use towards 20% + costs, that’s great. Now you just need the other 80% .... have you had anyone look into your borrowing capacity yet ?

 

where’s the tax man in all of this ?

 

Is the $200k to $300k pa you are seeking before or after taxation ?

 

The taxman is awaiting for @mkbonline to file his tax return

 

Out of interest what would you expect to pay for such advice?

 

isn’t this in NZ?

 

Yes it is

 

Hi Mob.

There is a really good book by Stuart Wemyss called The Property Puzzle. In this book he models a number of portfolios with cashflow and capital growth projections. It’s one of the best property books I’ve read. The figures will be out of date now, but the concepts are still valid.

Stuart Wemyss is a financial planner based in Melbourne and they design plans which incorporate property.

Jan Somers books are also excellent for developing a strategy to build a real estate portfolio.

 

I was thinking before tax income to replace my current salary. After tax will be nice though

 

Don’t know. I will be guided by industry standard

 

I have got a PPOR debt. I am in process of reducing it my selling an investment property . I expect debt to come down to $700k with $200k still in offset. Market value of PPOR $2mil and income level at highest tax bracket for both myself and wife. So 1 million is not cash but drawable equity from property.

 

and this is why growth alone making you wealthy is a myth for most people . You find that you need to sell stuff to retire debt . So you get half the job done ... ie the debt gone .... but you don’t retain the income source , cos you just sold it . So you end up debt free and income free . Some people know it as asset rich and cash flow poor . But whichever description you prefer , the result is the same - you can chest beat about being wealthy , but you never have any spare change . So If you can pay down the debt without selling things , you can complete the whole job ; you pay off debt and retain the income , and end up asset rich and cash flow rich .

this is why people who define wealth as net asset worth only , and don’t place any value on net income , are having a lend. equity , of itself doesn’t pay any bills . What good it’s a million in equity versus 100k of income, for paying bills?

Have you had someone look at your borrowing capacity ? It doesn’t matter how much equity you have if you can’t harvest it to fund deposits and stamps and borrow the other money to complete purchases. It’s the key ingredient to whatever type of portfolio you decide to pursue in order to reach your income goals

 

Not formally. But with household income of ~$500k and debt of ~700k (and 200k in offset). I should be able borrow ~2m ?

 

Your debt is 700k. Funds in offset don’t matter on a lender calc . Yes you "should" have that sort of capacity at those income levels , but just as oils aint oils, lending aint lending. You need to set things up in a manner that allows you to best achieve what you want to achieve. You really need to confirm capacity with a broker who can see/calculate 4, 5, 6 transactions ahead, because that's realistically the number of purchases you will need to be undertaking in order to get anywhere near the passive income results you are seeking

Part of that process will be the assessment of borrowing capacity.
Part of it will be the selection of best fit lenders - I’d recommend you ask your broker to look at whether using a facility such as AMP's master limit would be helpful , for example.
Part of the process will also require that you and the broker consider whether some of your portfolio requires construction lending. These things all influence the lenders that are best suited to get you where you want to go
And then , when that structural and capacity conversation has been decided, you need to commence the process of setting up cash out / loan splits for the deposits plus stamps for your purchases . This way, you only need to organise the loan for the balance of each purchase, moving forward, rather than needing to organise 2 loans ( one for the seed costs and one for the balance purchase) each time.
Being prepared provides you with the ability to move faster - which in boom times such as these allows for faster decision making than competing buyers .

It's actually very simple ; there is no rocket science to any of it. It's just a series of logical, thought out steps that position you to get you where you want to go without guessing...
So while your high incomes may provide you with a sense of comfort that you can always get the money you need , I still see huge value in being properly prepared and structured. Brokers are free - and good investor centric brokers are really the best asset any investor can have.

 

Ideally, you'd speak to a broker before speaking to any kind of property strategy person. Unless they're also a broker, it's all in theory if you're not able to fund their recommendations. Getting your initial structure right is also super important because it's the foundation you'll be building everything on. With your incomes, you want to maximise every tax deduction you can and a DIY approach (or heading to a branch) for the finance will likely cost you a fortune in lost deductions due to a poor structure- unless you're an accountant, and know what you're doing, possibly.

 

Any recommendations on investment centric broker and property investment advisor- who can help build property strategy for wealth creation. I am Sydney based.

 

There are several on here. I'm both ( a broker and PIAA adviser ) There are lots of really good brokers around these parts - @Redom @Terry_w @Tony Xia @Shahin_Afarin for starters...

 

Thanks for the shout out buddy, but I havent invested in commercial properties myself yet, so I'm out

 

I dont think the OP is seeking commercial lending