What should we do next?

Discussion in 'Investor Stories & Showcase' started by GoalBF, 8th May, 2018.

Join Australia's most dynamic and respected property investment community
  1. GoalBF

    GoalBF Member

    Joined:
    23rd Oct, 2015
    Posts:
    11
    Location:
    Sydney
    Hi All,

    Had joined this forum in 2015 (did start to read a lot of posts before that) and haven't posted a lot but gained a lot of knowledge, thanks all. Due to recent changes in the property market, mainly lending restrictions, I would like to share my investment journey and also hope to receive some advices for moving forward.

    I started my property investment journey with now my wife in 2008 after paying the deposit for an off the plan apartment with financial assistance from my family.

    Due to low cost of living and subleasing our rental property to others and higher incomes than expected (I had been promoted to a high paying job (close to 6 figures) only 3 years after I left Uni), we were able to save over $100K a year, this enables us to purchase a few more apartments until we purchased our first house in the Shire in late 2011 with the intention to knock it down and rebuilt a duplex.

    In 2013, we decided to start a family and use all our available fund to purchase our PPOR in North Shore and also started to save our money to fund our construction of duplex, as we maximized our borrowing capacity, we wouldn’t be able to purchase any more property.

    Fast forward to 2018, the construction of our duplex has started and expected to finish in early 2019. Below is a snapshot our portfolio:

    6 apartments located all within 15 KM of Sydney CBD - in North Shore, Inner West, and close CBD
    2 houses, one in the shire (duplex being built) and one in North Shore as PPOR

    Total value today is around $9M with LVR below 50% or over $10M after construction finished.

    All properties are positive gear except the house in the shire, bring in around $40K in total after-tax or over $100K once construction finished.

    What should we do next? We are considering to:

    - sell 3 of our apartments to release around $1M fund to bring down our debt and to increase our cash flow to close to $200K
    - sell 3 of our apartments to release some fund to fund more projects
    - Sell 1 or 2 properties to extend our PPOR and pack the exact money into offset account and spend more time with family
     
    Frank M likes this.
  2. neK

    neK Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,842
    Location:
    Sydney
    You've done well. Take some time out.

    Do nothing, but spend time with the family and kids. The kids are only that age once and what you do now can leave a long lasting impact on them.
     
    Bwinny likes this.
  3. Tonibell

    Tonibell Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,107
    Location:
    Sydney
    @GoalBF Great timing with Sydney - wasn't that a great boom.

    You look way over exposed to the Sydney property market - we were/are the same - which has been great for the past few years but is quite risky now.

    Don't know what else you might have but I'd suggest you need to lock in some of your gains and move to other assets classes and/or property markets.

    After having about 90% of our assets in Sydney property at one stage we are back to something like 65% now (and still working on decreasing that before the market does it for us !).

    So - I'd say option B and invest elsewhere.
     
    Stoffo and hobartchic like this.
  4. GoalBF

    GoalBF Member

    Joined:
    23rd Oct, 2015
    Posts:
    11
    Location:
    Sydney
    Thanks for that, and totally agree with spending more time with the family. Have been thinking to take a break for a long time but things kept coming out. Thanks again!
     
  5. GoalBF

    GoalBF Member

    Joined:
    23rd Oct, 2015
    Posts:
    11
    Location:
    Sydney
    Yes and thanks. Indeed great timing with Sydney and was never thinking about achieving such portfolio within 10 years.

    In regards to investing elsewhere, I was looking at Melbourne and Brisbane before but didn't pull the trigger as unfamiliar with those markets, was going to invest in Hobart before the boom, but didn't go ahead with the same reason as Melbourne and Brisbane - as they were out of my comfort zone even though the numbers stack up.
     
  6. Gockie

    Gockie Life is good ☺️ Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    14,737
    Location:
    Sydney
    Geez, that's awesome @GoalBF. A word of warning if you sell, you'll have to pay CGT. And you may not be able to reborrow that money! Since all the IPs seem to be well located, maybe hold? And if either you or your wife stops working for a while, then sell one? (That's in their name?)
     
  7. Tonibell

    Tonibell Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,107
    Location:
    Sydney
    Exactly the same as us - but we pulled the trigger in Brisbane big time. Invested as much as we did in Sydney pre-boom.

    Even did some big renovations up there- now we just wait. It is easier with the comfort of Sydney equity sitting there.

    Like @See Change has/had on his avatar you need to decide between the Eagles songs - whether to “take it easy” or “take it to the limit one more time”
     
  8. See Change

    See Change Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,110
    Location:
    Sydney
    Though now with the APRHA changes it's take it way past the limit ...:cool:

    Cliff
     
  9. Eric Wu

    Eric Wu Well-Known Member Business Member

    Joined:
    8th Oct, 2016
    Posts:
    1,603
    Location:
    Australia
    well done there @GoalBF, excellent position to be.

    re the 3 options you listed there, the first 1st & 3rd are not hard to do.

    the 2nd might be a bit challenging ATM with all these lending changes ( you might have reached your borrowing limit)