Stretch Target of $20m gross by 2022

At that LVR I would be happy with a large amount of exposure if spread out, but I would not be happy with managing the managers or the other paperwork

Even if there is a large correction, it should be ok, only total disaster would be a concern, but then a disaster of that large a scale will hit everyone anyway most likely.

If you owned a bunch of property at or around Fukashima you would not be a happy camper.

 

Sure do....just not Sydney or Melbourne as much. I have looked at markets in other countries and outside of Sydney...some our cities have bargain real estate.

Outer Melbourne, Brisbane, Adelaide, Hobart will take over the mantle ....just part of the normal cycle....thus why you need a diversified portfolio to continue growth. On a large portfolio an average of 500k growth is 2.5m in equity.

Tried to explain some of these concepts to some people but fell on deaf years. Also I have exposure to Central Coast, Newcastle, Wollongong ...these markets are still going. For example Woy Woy purchase if now over 600k and still going...bought for 263k 2010.

 

Actually I do have an ABN/company that owns 3 IPs (and has been live for 4 years).

The 'income' the company receives would solely be the rent they receive. Taking into account the mortgage repayments, depreciation etc, the company is trading at a slight loss. In that regard, how would this help in getting a loan?

 

For a start, depreciation is an add back.

 

OK ignoring depreciation and focussing on the strict cash inflows/outflows, its about neutral.

 

You would have to run that one past a broker but probably not particularly helpful as far as I know

 

I do not think this will work, but your accountant will look at all income, not just the company.

At the end of the day, if your breaking even after you live, then no one will lend.

 

@sash - are you able to share your strategy around buying H&L properties, particularly how you decide on the areas to target?

 

Pretty simple stategy get in early when the land is cheap and look at planned infrastructure in the 4 major cities in Australia.

Hard to tell all on a forum...probably one better for a face to face convo. Come along to one of the meet-ups and we can chat further.

 

Sashi,

Considering you've got this money making thing all worked out now, do you have any plans on how you're going to spend all your money when you finally cash out?

 

And here I am! Although not much to light sabre about.

Numbers look great there sash.
These numbers are a product of work hard, smart and patience. Not that easy to replicate.

I know a few people who done well last 5 yrs with H+L, some just by default.
Still working on a few myself, and this may be my OP for the next 5 yrs even though I'm having a strong tendency to sell land as building skills are not my forte.

In the old SS days my LVR went down to around 30%, started gearing up about 10 yrs ago and got to about 60%. The RE gods smiled and it's now back to around 30%.
A property i got in 09 for 480k with a 250 loan will probably be on the market at 1.5-1.6mil soon.
A few others will be kept while I once again play the game of forum sparing lest i get tempted to catch falling swords.

As much as residential has been good to me I 'm not so keen on it going forward.
Equities is one option, and the other is some type of commercial RE.
Not really interested in buying shops, offices or warehouses though, I don't see any future for me there.

 

yeah, may be he is Japanese ?
Here's why 98% of all Japanese adoptions are adult men

 

I haven't read your entire thread but its nice to see that you are very ambitious and have the confidence in yourself. Good on you for that.

I have a few questions for you.

Which banks do you go to and how are you managing your cashflow? Is it ALL positive geared and by how much?

I'm approaching 20 properties again now - big big problems with finance now even with very very good cash flow and making a high wage as well plus my online businesses.

It gets to a stage whereby banks are looking at my risk as well because of the number of properties I own.

Do you have a contact in Sydney I can go see regarding my structure and cashflow? I need to really sitdown and lay out everything in order to continue to invest.

I want to get 30 properties by the time i'm 34 but the way loans are going I'll be lucky to get 25.

Main things is

1) How is your cashflow structured? All positive? Or you buy houses or say retirement village places for like $80k and get $250 a week to ADD to your cash?
2) Which banks and financial institutions are you going to? Even Pepper and Liberty are getting much harder to get loans from and they I believe are non conforming lenders
3) Any other tips to get or increase borrowing capacity? Not interested in doing $50k reno's and increasing rent by $100 a week. It wont help me much in that scenario.

Any insights is appreciated. How many houses are you up to now?

 

Well done @sash baby now when are you giving this stuff away and start your travelling.

The thing is its addictive, hard to stop, especially if you are having fun

MTR

 

Well..with you paying for my coffee and cake (thanks) at Wenty...it got a bit harder....

But spending it no worries...do it every year when I go on a big trip...easy to spend 10-15k on a 4-6 week trip to Europe no worries...also spent a bit on local travel in between easily spend up to a grand in 3-4 days on things like accommodation, car hire, and airfare, meals. During the weekends I eat out a lot...so a $100 here...$150 there...burns cash quickly.

 

Nice work...

 

Thanks Ivanka Trump!

I hear you have resorted to wearing Target dresses.....what happened to Dolce Gabanna..Chanel..Versace....Manolos....Luboutins? It just ain't Nuevo York?

Merde....c'est n'est possible pas?

 

Tips on banks......learn the finance game well....brokers can't help you when you have a portfolio your size. But agree bank financing is getting very tight......maybe it might be to smell the roses ...who know what is around the corner. I use RAMs mostly...but also have Westpac, SunCorp, CBA, and St George ....with the exception of CBA (I don't like them much!)...I have at least $1m in loans with each

I am highly positively geared .....90-130k....based on the number of renos or maintenance I do.
I have 30 places with 2 off the plan land purchases in the pipeline....

You might start in tha Druie and Lower Socio Logan...but you need to up and beyond....cashflow ain't everything...balanced approach (5.5-6% yield with 6-7 growth)

1) How is your cashflow structured? All positive? Or you buy houses or say retirement village places for like $80k and get $250 a week to ADD to your cash?
NO JUST UNIT, TONWHOUSES, AND HOUSES
2) Which banks and financial institutions are you going to? Even Pepper and Liberty are getting much harder to get loans from and they I believe are non conforming lenders
RAMS AT THE MOMENT
3) Any other tips to get or increase borrowing capacity? Not interested in doing $50k reno's and increasing rent by $100 a week. It wont help me much in that scenario.
YES LEARN THE FINANCE COMPANIES REQUIREMENTS WELL. HAVE AN EXCELLENT LOANS CONDUCT HISTORY. DIVERSIFY ACROSS STATES..DON'T BELIEVE THAT SYDNEY IS THE BE ALL AND END...IT WILL TAKE A PUMMELING AT SOME POINT ...

Good luck.....

 

Your cashflow $130k net after all expenses? Wow that is a HUGE positive cashflow.

If you have 30 houses let me see if my numbers are correct. So each of your houses even if you buy in low social economic areas say @$300k a pop.

Even putting down 20% deposit and say you get 5.5% Yield I don't think you would come up on top $130k NET each year.

(i.e)
$300k house
Owing to Bank = $240k
Interest each year @ 4.5% on $240k = $10,800
Rental Income @5.5% Yield = $16,500 per year
Net profit potentially (Zero maintenance and running costs included for ease) = $5,700 per year.

$5,700 x 30 = $171,000 Net Profit. (it will be less after taking out opex costs/maintenance/strata/council etc)

Lets just say $100k net profit per year on all 30 houses. Does this sound about right in principle?

How did you get to 30 houses? Equity or cross correlation the properties? Putting down 20% each time (heck even 10% each time) for 30 house is ALOT of money.

@10% deposit each time + Stamp duties on 30+ plus is over 1 million easily.

Your still not having issues with getting loans? The big 4 banks wont touch me at all now. Even the non conforming lenders wont because of my high number of houses.

I think I am pretty well understanding of the financial requirements but still struggling. PLUS they calculate your serviceability at like 7.5% and do not take 100% of your rental income into account now as well.

I want your connections because its getting impossible for me and I'm positive cashflow and I also get a big salary as well. I am very close to my CBA national lending manager as well. He even cant help me.

Whats your day job? You must be on big coin to help with the loans on the 9-5?

 

Hard to put an old head on young shoulders... if ya get my drift...can't do what I do without going through the experiences....

Some of my thoughts:

1.20% deposits why? I am still doing the optimised 88% plus LMI capitalised
2. You are assuming all my properties were bought in the same year.....some of my properties have a rental returns now of 23%. LVR is very low
2. Some houses are either fully paid off or have been 100% offset'ed
3. Big 4 banks? Why? Another reason you ain't getting anywhere....I have said ad nauseam about how CBA are the worst bank to deal with. Some brokers prefer them as they are easy to put loans into...
4. My job....err...professional hitman....kidding...I am in IT.....

Now for my questions:

1. How many places?
2. Where are they?
3. What is you strategy/longer term goals?