Stories of +CF from day 1 and how you did it...

Discussion in 'Investment Strategy' started by Kurt, 26th Jul, 2017.

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  1. Kurt

    Kurt Active Member

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    C'mon lets hear it - I know there's some yield chasers out there. Lets here some of your stories on how you went positive cash flow from day 1 and how you did it.
     
  2. D.T.

    D.T. Specialist Property Manager Business Member

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    Buy cheap run down places people dont want.
    Renovate them.
    Renovated places rent for a premium.
    This affects both sides of the yield equation :)
     
  3. jins13

    jins13 Well-Known Member

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    Friends purchased deceased estates and marriage breakdown properties. Personally for me, bought my first IP from a family who had a member suffering cancer and paid the asking price.
     
    Last edited: 26th Jul, 2017
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  4. Propertunity

    Propertunity Well-Known Member

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    ^ ^ this is what we did too.

    Additionally, we bought houses (5% RY) with granny flats or built granny flats (add 2.5% RY) to give 7.2% rental yield total.
     
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  5. Beano

    Beano Well-Known Member

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    Brought (sort of recently ..last one last year ) low value and high value properties in perfect condition with a 6pc to 6.5pc net yields
    Positive from day one
    Have not spent a penny on them since purchase (tenant maintains)
    Pay a lot of taxes on profit and repay a lot of debt!
     
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  6. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Buy on the cheap end of the market in a flat Sydney market before the boom with 7% plus returns from day 1 and no work required. Though to be fair, rates were also mid 7%'s!
     
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  7. Scott Townsend

    Scott Townsend Well-Known Member

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    Bought house in Logan area with a 6.5% yield.
    Than an NRAS property
    Then built a granny flat on Logan property which brought total yield on property including build price 10%
    Turned PPOR (Perth) into rental property which is also highly positive cash flow. (only yielding about 4.6% but positive due to my loan being payed down whilst living there)

    Scott
     
  8. Phil_22

    Phil_22 Well-Known Member

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    Buy 3BR House in a regional center in NSW with population > 20K.
     
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  9. neK

    neK Well-Known Member

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    Think that sums it up beautifully.

    Thread can be closed now :)
     
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  10. Poppy

    Poppy Well-Known Member

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    A lot of regional towns still have properties for around $150k that rent at over 10% yield. I started out in Rockhampton.
    Another way to immediately enhance yield is "internal subdivision" - a builder made the front room of my terrace into the 3rd bedrm. If I could be bothered I could have rented each bedroom out on air bnb for about $100pn each.
     
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  11. Biz

    Biz Well-Known Member

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    Easy, just quote gross rental yields in regional one horse towns.

    [​IMG]
     
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  12. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Bought a property that wasn't cash flow positive on the day we settled, but it was after a quick renovation. We also timed perfectly when it would hit the rental market for the area to get a premium rent.

    It was also a long time ago. Not chance of achieving this outcome in that area today.
     
  13. Dan Donoghue

    Dan Donoghue Well-Known Member

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    Mine is CF+ by about $200 a month when I count the interest paid on the IO portion of the PPOR loan that covered the deposit and the interest on the IO IP loan.

    If I were to count it only on the IO IP Loan it would be $1,400 a month CF+.

    4.85% yield. If I calculate the yield against the actual loan against the IP as opposed to the total amount we paid for the place, it goes to 7%.
     
  14. New Town

    New Town Well-Known Member

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    To get the CF positive thing right you need to exactly know the rents and expenses. Sounds obvious but a few of my cheapies bled money early on because the rent came down a bit and some expenses, like rates were higher than I had factored. On the cheapies with lower rents you have little margin for error.

    The chance of vacancies and likely repairs should also be well understood. A good upfront reno will remove most of the repair issues.
     
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  15. trunx

    trunx Member

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  16. Ace in the Hole

    Ace in the Hole Well-Known Member

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    Not quite from day 1, but all our properties were developed not long after purchasing, and all were positive after cashing out the increased equity.
     
  17. CK_Invest

    CK_Invest Well-Known Member

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    everyone talks about buying up in less desirable areas or renovating or adding a granny flat or subdividing..

    here's another one not mentioned yet:

    pay a bigger deposit i.e. minimise LVR = cashflow positive
     
  18. dabbler

    dabbler Well-Known Member

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    Why ?

    How you do it ? you pay your monies and you pick your poison.
     
  19. Trainee

    Trainee Well-Known Member

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    Which leads us to: why is cashflow positive so good? What are you missing out on by focusing on cashflow? 'Because itll help me pay off the loan' is too simple. You can sell a property after it appreciates and pay off your loans.
     
  20. Chris Au

    Chris Au Well-Known Member

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    Yep, just do the sums first to not blow he budget and overcapitalise.