What's my next move?

Discussion in 'Investment Strategy' started by Jmillar, 2nd Jul, 2020.

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  1. Brendon

    Brendon Well-Known Member

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    @Jmillar the question I’d ask is what’s the end game?
    I’m a similar age and have found my plans/goals have changed massively over the last few years and continue to change and adapt.

    You say you’re high income, is it a job you like or something you’re trying to get out of?

    If you love your work you could just let your IPs tick away and pay themselves off while putting cash in your pocket. Pay off your PPOR and live quite a nice lifestyle. But I’m guessing you’re pushing for more than that?
     
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  2. Beano

    Beano Well-Known Member

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    Is the 6-7% return net or gross?
    I note you said you don't have much spare time .
    A move into commercial would probably give you 6-7% net yield with less work than residental.
     
    Last edited: 6th Jul, 2020
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  3. fols

    fols Well-Known Member

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    I would divest all the Logan properties and buy 2 or 3 quality assets in better locations to deliver you long term capital growth. IMO its capital growth that drives wealth, not ten bucks a week positive cashflow.
     
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  4. fols

    fols Well-Known Member

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    Need to consider the opportunity cost of holding assets that aren't growing.
     
  5. 27649

    27649 Well-Known Member

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    Hey Mate,

    From what I hear Metropole Property Group have a great armchair development service.
     
  6. Jmillar

    Jmillar Well-Known Member

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    Love my job, I see myself doing it for a while.

    I'm not really greedy - if I can pay off my PPOR and get $2-3m worth of equity to then buy commercial property/shares with and turn into income, that would keep me happy.
    Not ready for commercial just yet :) Once I have a couple mil in equity I'll definitely jump in
    Yep, will be assessing whether I can continue to buy properties and hold my current assets. If yes, then I'll probably keep most of my current IPs (cash flow positive so they don't cost me to hold).

    If I need to sell them to continue to buy, then I will definitely have to sell a few and then get into some assets in different areas.
     
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  7. Trainee

    Trainee Well-Known Member

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    Given that ppor, dont be surprised if you need to upgrade to more space in the future.

    Have you really done the analysis and decided that Logan will give you the best capital gains in the next decade?
     
  8. Beano

    Beano Well-Known Member

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    Hmmh I find its' positive cashflow that creates the wealth that you do and can use.
    It's the Cashflow that gives you freedom to do what you like.
    It's the Cashflow that gives you freedom to buy what you like
    It's Cashflow that supports new investments and gives you freedom to invest in more properties.
    You are right in saying $10pw does not make you wealthy but $10k a week does. (My last CF investment 100pc financed gives me almost that)
     
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  9. fols

    fols Well-Known Member

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    Agree, but (I assume) you are referencing a commercial property deal, which is a vastly different proposition to resi (as you know). If one needs $10 per week, buy 3 less coffee's:)
     
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  10. K974

    K974 Well-Known Member

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    I agree , sell the lot, they served purpose and have got you started.

    based on $400k avg in Logan , you are holding 10 properties to create approx $500-550k in equity?
    you can use that $500k in better ways in my opinion
     
  11. Jmillar

    Jmillar Well-Known Member

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    Where would you put the $500k?
     
  12. K974

    K974 Well-Known Member

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    assuming australia ,
    inner Brisbane , stand-alone houses in good street , and of the type there potential to add value potential , now or in the future
    In my opinion you’ll do better overall , with a lot less headaches
     
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  13. Jmillar

    Jmillar Well-Known Member

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    Thanks. Moving forward, I definitely want to buy properties with opportunity to add value (subdivision, retain and build etc) down the track.

    I'm going to figure out whether I can hold my current IPs and continue to buy. If so, there isn't a lot of motivation to sell cashflow-positive properties just to bank $10-15k in some cases.

    One benefit of selling then buying would mean I could pay down a decent chunk of PPOR debt then pull it back out ie debt recycle... I'm not quite sure how to work out the exact benefit of this but I guess if I could pay down even say $300k of debt then make it deductible then:
    - At $300k @ 2.8% ir = $8,400 pa interest turning into deductible. I pay 45% tax so would save me $3,780 pa.

    Those properties are well over $3,800 pa positively geared though, before depreciation, so would still be better off keeping and still keep my exposure to capital growth on these properties.

    Do these numbers sound right?
     
  14. Ubuntu

    Ubuntu Well-Known Member

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    Where do you get these cheap coffees????
     
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  15. fols

    fols Well-Known Member

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    I buy them below market value.
     
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  16. The Y-man

    The Y-man Moderator Staff Member

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    Wholesale and below value thank you! :D

    The Y-man
     
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