What are all the people who quickly accumulated properties using equity doing now?

Discussion in 'Investor Stories & Showcase' started by Kramerica12, 1st May, 2020.

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  1. Kramerica12

    Kramerica12 Active Member

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    2-3 years ago there were lots of stories online of people amassing 10-20 properties within a few years by buying, possibly manufacturing equity or just getting some capital growth, using the equity to buy another property, etc. This includes several people on PC. It sounded like a lot still had plans to accumulate even more.

    Now that this is no longer possible due to stricter serviceability requirements, a lot of these people would be stuck. Are they just paying down loans and then accumulating more at a significantly slower pace as their serviceability allows? I imagine that these people would be significantly above the serviceability requirements and it would take a while to get back down to 6-8 DTI. Or are they approaching non-bank lenders?
     
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  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    perhaps they were just stories?
     
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  3. twobobsworth

    twobobsworth Well-Known Member

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    Stuck with a few million dollars of assets might be a nice place to be.
     
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  4. David_SYD

    David_SYD Well-Known Member

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    If paid off and/ or tenanted.

    Stuck with a few million dollars of negatively geared properties with vacating, non-paying or underpaying tenants would not be such a great place to be.
     
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  5. Kramerica12

    Kramerica12 Active Member

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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    I don't know, did they acquire 10 to 20 properties? I am sure there were many doing this in the good old days but post 2017 it would be every hard to do unless well established.
     
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  7. Lindsay_W

    Lindsay_W Well-Known Member

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    6-7 Properties more likely
    And where are they now? Living the good life ;)
    Building their income streams - Broking business' so they can increase their borrowing capacity and accumulate more property no doubt
     
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  8. MTR

    MTR Material Girl Premium Member

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    I think it would be dependent on LVR/debt
     
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  9. MTR

    MTR Material Girl Premium Member

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    Just to add to the pain we have interest only loans reverting to principal and interest
     
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  10. Scaphella

    Scaphella Well-Known Member

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    What ever happened to that bloke who bought up heaps of properties and wore thongs all the time?
     
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  11. Beano

    Beano Well-Known Member

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  12. Scaphella

    Scaphella Well-Known Member

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    So I just googled “Australian property investor thongs” and the winner is ... ‘Nathan birch’ .
     
  13. MTR

    MTR Material Girl Premium Member

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    did not see this, reading my mind
     
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  14. Trainee

    Trainee Well-Known Member

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    If it was Syd / Melb, they would have done ok if they had sold some over the last couple of years and kept a decent buffer.

    If other cities with no recent CG, and they kept maxing out right until credit tightened, they might be in trouble.

    Risk management.
     
  15. Peter_Tersteeg

    Peter_Tersteeg Well-Known Member

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    When I think of easy servicing and building large portfolios, I think of 2014. 2017 was easier than it is today, but things were already fairly tight back then.

    Most people who have built portfolios of double digit properties either bought very cheap properties or they had an income generation strategy, perhaps their own business. I'm fairly certain the names mentioned too the business path.

    If you don't have a strong income source, then you might have a lot of equity, but that's not going to allow you to borrow more in its own right. Your only option is to reduce debt, often people do this by selling something.
     
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  16. SeafordSunshine

    SeafordSunshine Well-Known Member

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    I think that type of investor has a high threshold for risk!
    perhaps easy come easy go?
     
  17. Owlet

    Owlet Well-Known Member

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    Perhaps nothing. Accumulation phase may be complete.
     
  18. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    If someone was able to get that many properties 3 years ago they would probably be doing ok with the reduction in rates by about 2% since then - assuming their tenants stil paying rent.
     
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  19. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

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    The real test will be when the IO reverts to P&I and they may not find it easy to refinance. Probably okay for the moment...
     
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  20. ellejay

    ellejay Well-Known Member

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    I was just counting today and we're on our 40th deal. The more recent ones over the last 5 years or so were bought in NZ following rules of buying in 100k plus population areas with 8% or better gross yield.
    What are we doing now? Sold a few off over the last 2 years as many had doubled (or almost) in value and were likely to have maintenance issues at some point soon that would wipe out months of cashflow. Still holding 16 currently but they're a mix of some of the original purchases and some small developments/splitters which will be sold off in a year or so. Lumps of cash from sales each year fund more purchases.
     
    Last edited: 1st May, 2020
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