What would you do next?

Discussion in 'Investment Strategy' started by bradleee16, 30th Jan, 2022.

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  1. bradleee16

    bradleee16 Well-Known Member

    Joined:
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    Location:
    Melbourne
    Happy Sunday!

    I've reached a bit of a point where I'm uncertain what to do next in my RE investing journey. I know there's plenty of professional support out there but I also know there's many on this forum who have come before me and can share their experience.

    Current situation: 3 properties (2 on GC, 1 of which is shared with mum and brother, 1 in Geelong) total asset value of my share ~$1.6m, pretty much cash flow neutral the three combined. $965k my share of debt. All owned in personal/joint names. Currently working with town planner/architect on DA for 1 into 2 on one of the GC properties. Hold about $250k in cash after selling down shares, will be a little bit of a tax bill in July.

    My current goal for the next 5 years, I feel, is to grow my assets as much as possible. I'm currently 25 (and, for better or worse, single), so still fine to be working. I know I'll eventually also reach some sort of serviceability limit. I know it's also impossible to time the market, but things right now just feel extremely hot and this is my first time through a cycle like this. Plus the interest rate uncertainty.

    I guess my main questions are...
    1) Those who have experienced these market cycles before, is there any hope in trying to even time the market or just get in whenever you can get in?
    2) Where have you seen your most success? I do residential because it's what I know the basics of. Should I be exploring commercial or multi res?
    3) Any other suggestions/advice/reading/anything you can provide from your experience? What would you do next if you were me? What did your journey look like?

    I always get hit by the nerves before figuring out the next step. But huge thank you to everyone here -- every step I've had in my investing journey has always come with the help of answers to questions on this forum.

    Hope everyone has a great week ahead. :cool:
     
  2. WattleIdo

    WattleIdo midas touch

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    Wow, you're doing really well at such a young age. Everyone would give different advice. I guess I would steer towards riding out the next few years and paying things off as much as you can, if that's your style.
    You have time on your side and a life to enjoy. But always be on the lookout for a good deal when your finances are ready to go. I reckon there's no hurry right now, unless you need something to live in?
     
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  3. Do Androids Dream

    Do Androids Dream Well-Known Member

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    Have you considered a mentor? Sounds to me like this would be something highly beneficial for you :)
     
  4. Sackie

    Sackie Well-Known Member

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    Vaucluse, Sydney.
    My current goal for the next 5 years, I feel, is to grow my assets as much as possible. I
    I guess my main questions are...

    1) Those who have experienced these market cycles before, is there any hope in trying to even time the market or just get in whenever you can get in?
    Its impossible to time markets with certainty, but possible to get in markets with higher probability of less risk eg jumping into Sydney now is higher risk than Perth.

    2) Where have you seen your most success? I do residential because it's what I know the basics of. Should I be exploring commercial or multi res?

    There is no one area is best for all. Everyone has their own skill sets, risk tolerances etc. I would let your interests and goals guide your chosen strategies.

    3) Any other suggestions/advice/reading/anything you can provide from your experience? What would you do next if you were me? What did your journey look like?

    This is completely dependent on your goals and what you want to achieve. If I were 25 and in your position, I would go as hard as I possibly could for the next 10 years. Maximizing leverage (with buffers and IR increases in mind) and be looking to find the best add value deals I could find around the country atm. I'd also be increasing my knowledge in the renovation/development areas. But you need to work out what's right for you and your life.
     
    Last edited: 31st Jan, 2022
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  5. Morgs

    Morgs Well-Known Member Business Member

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    Some good advice above!

    To share some perspective from our own journey:
    1) When we were building our portfolio we were mostly blind to market cycles and just accumulating when we could. In hindsight it meant some properties didn't grow for a while but we wouldn't have known how to time to market.
    2) Most of our success has come from active projects where we have added value (renovation, extension, development).
    3) I would suggest focusing on building your income as high as possible (be that PAYG/self-employed). This is the fuel to build your portfolio as these days borrowing capacity is a finite resource.
     
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  6. bradleee16

    bradleee16 Well-Known Member

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    Melbourne
    Thanks all for the insights so far. Appreciate the support.
     
  7. Beano

    Beano Well-Known Member

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    You want to grow your assets do you want to grow your income too?
    $635k net assets would create a bit of income through commercial.