What I learnt out of buying 7 properties

Hi David
Thanks very much for answering my concerns .Can you please answer one more question
Your right the lender (CUA) advised me the 10% deposit is paid by me ,but he also mentioned that money will be reimbursed after settlement. For eg Purchase price $450,000.00 plus stamp duty $473,000.00 less deposit $45,000.00 balancing owing at settlement approx $428000.00 (not including adjustments).
The $45,000 will be deposited into my account . Not that I do not trust what he saying .I need to clarify this for peace of mind.
They are lending the full amount because I am offering my PR plus the new purchase as security.

 

Seems like a 100% lend plus costs on the IP, using equity in PPOR and crossing

 

Exactly what Rolf and Lindsay is saying above

You need to be careful here - sounds like CUA is tieing your new loan with your PPR and your IP. It'll cause you more headache down the track with potential taxation issues and problematic when you want to refi, release equity or sell any of the properties down the track. Before you proceed with that structure, I would recommend you do a search on this forum with the term "Cross collaterlisation" - plenty of good posts here that explains implications of this structure in detail.

Cheers,
David

 

Hi @David Shih,

Just stumbled upon this thread at right time. Took time to read all the posts. Thanks a lot for sharing your journey with examples.

I am looking forward to buying my first IP around the Blacktown council area.

Just a quick question, what would be a good potential or feature which makes "having a (inground) pool in a free-standing house" is tolerable or overweighs due to it's potential?

Say, good land block OR established granny flat OR Duplex potential? OR if more than 2 or 3 features mentioned together?

Or It should be avoided at all costs?

I have seen houses with these combinations. That's why just wanted to know.

 

You're welcome @Jey2018 I'm glad you find it helpful and hope it guide you to making better investment decisions!

In regards to your question, the main gripe I have with any kind of pool is that it's a money sucking machine - instead of putting money back into your pocket you need to fork out more to replace all pool related maintenance items. So if you have a way to counter that in long run, such as having a granny flat/duplex that can get you extra rental income & supplement the cashflow while building up enough buffer fund to cover for these maintenance/replacement costs then it could work out.

The other alternative way to looking at it is factoring in the potential cost of removing the pool (if possible) in your offer price then it could also mitigate this risk. You can then make a decision on when you want to get rid of it, knowing the cost is paid by someone else but you

Hope that helps mate.

Cheers,
David

 

Awesome post. I actually used to live in Kingston 5 years ago, knew the shopping centres in the area very well. Went back the other day (looking at a Woodridge purchase). I've got to say the Logan shops looked far more dodgy than I ever remember.

Even I felt unsafe (and I'd walked the streets at night years ago.)

I get the sense the area is actually going backwards, even if prices are rising.

 

Love reading your information I am starting out and very interested in Kallangur and surrounding area for @ $450k to $520k I have no other IP $3.5mil equity in PPOR and a moderate mortgage @$240k my question is how has the Kallangur property performed and how have the tenants been

Stanley

Also enjoy your YouTube

 

Thanks Stanley appreciate your feedback

My IP is situated at Murrumba Downs and from what I’ve heard Kallangur & Murrumba Downs are absolutely heating up on the ground with lots of competitions. I would say mine is now conservatively edging towards $400k in value so around 20% gain. Mind you I did held since 2016 though so it’s been almost 5 years.

No issues with tenant. As a matter of fact, it’s been the same tenant since 2016! All I did just keep bumping up the rent every year during rent review

Cheers,
David

 

Thanks appreciate the help

 

Just sold my IP in Kingston, the price hasn't changed much in 10 yrs. Even in this boom time, there are odd exceptions, but 4114 property or rent prices are not exactly going to the moon.

 

https://www.realestate.com.au/property-house-qld-kingston-135988594

Sold in 48hrs with 11 offers? I would say that is an extremely extremely strong market. I dont invest in Kingston but this is no joke.

 

That is actually a nice part of Kingston and within reach of the train .

I can understand reticence about 4114 in general. Although I love Logan I haven’t been brave enough to buy there even tho I think those who do might find gems. There are better opportunities in 4131 4132 and 4130

 

The best woollies in Brisbane is at Meadowbrook next to hospital and train. When u say Logan shops do u mean on Wembley road? Since hyperdone and browns plains I think that area can’t compete

 

David, a fantastic post. If you don't mind to share (you might have mentioned it somewhere) : in summary did you just bought 7 or more, how many sold, what suburbs the remaining IPs, how much annual out of pocket expenses. It is a fine balance between potential capital gain vs holding cost.

 

Hi @oasis1frog,

I have discussed my individual properties in detail in my YouTube channel - however at high level 7 properties plus a new PPOR upgrade which we just bought few weeks ago. Managed to hold all 8 properties as at this point.

Suburbs are Granville (NSW), Hornsby (NSW), Slacks Creek (QLD), Woodridge (QLD), Murrumba Downs (QLD), Eagleby (QLD), Newcomb (VIC) and Hornsby (NSW) again for the latest PPOR upgrader.

From out of pocket expense perspecitve, before we added our PPOR upgrader the portfolio was positive and giving us about $1000 per month. Mind you at we had our old PPOR loan fully offset as well. Now we've taken on a relatively big PPOR debt for our new PPOR and used up most of our savings as deposit, my cashflow projection is showing about $3500 - $4000 out of pocket per month. Small price to pay to keep missus happy I guess

Cheers,
David

 

I love coming back to read your story @David Shih, inspirational stuff mate!

 

You mentioned not to buy a property with a pool... would you consider filling in an existing pool with dirt and covering it over?

 

Yes, however I suspect the cost of filling the pool up might outweigh the cost of keeping it. It's like whether you want to spend bugger all upfront versus spend slow over the years.

Perhaps at some point when I had enough I'll get a quote on how much it'll take to fill up with dirt but at this point in time, I'll let it run for a bit longer as current tenants are loving the pool at the moment

But if I was to do it again I would avoid pool myself.

Cheers,
David

 

Interesting