Buying Houses Strategy

Discussion in 'Investment Strategy' started by hellworld, 6th Aug, 2015.

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  1. hellworld

    hellworld Member

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    I went to Mark Rolten (sp?) seminar a while back. It was free, I had no intention of buying whatever he was selling but thought it would be a good starting point.

    One thing I picked up from his seminar was that you should buy at least 1 house every year with the intention of holding the homes for a 10 year period and then selling half to pay off the others...This obviously assumes they all double in price.

    Is this a realistic goal? Has anyone else done this? Cheers
     
  2. Tropo

    Tropo Well-Known Member

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  3. hellworld

    hellworld Member

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    Thanks, but more so asking about the technique not whether he is a scammer or not.
     
  4. Tropo

    Tropo Well-Known Member

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    If you can save for deposit each year (required amount of money say 50K~100K), the technique may be good for you but it is not realistic for most of the people.
    Also double the price every 10 years it's a dream in most cases. You can check statistics on this one.
    Read some books and talk to property investors (I'm not a big fan of IPs).
     
  5. Corey Batt

    Corey Batt Well-Known Member

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    The timelines may be a bit enthusiastic - but the overall premise is there. A portfolio expansion and consolidation phase is a tried and true method to growing a retirement income stream.

    The consolidation phase doesn't necessarily even have to involve a sell down point - it could end with diversification into other asset classes (shares), a smaller sell down and maintain a low level of debt or retaining all debt and switching to principal and interest (assumption of no non deductible debt) and allowing inflation + repayments to erode the debt down.
     
  6. Paula Ospina

    Paula Ospina Active Member

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    The question if its realistic would depend on each individual. Their borrowing capacity, ability to save the deposit and how well they buy all the preceding properties (i.e. if they purchase well enough equity for the next purchase) which tbh is quite a challenge for most people.

    In terms of it doubling in 10 years, its impossible for anyone to guarantee this lol. But even tho you can't predict - you can prepare. By this I mean doing all your research and buying in an area with growth drivers and restricted future supply (also worthwhile checking how that area has performed over the past years and through all the downturns and its ability to bounce back).
     
  7. MWI

    MWI Well-Known Member

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    Bought through other advocate of this concept...
    Similar concept, bought 8 IPs within 8 years (passively - very naive starting out investor), but not every year rather the finances and economy/market permitting, so rather accumulating when it was within strategy to do so. This started 20 years ago, now have added many more IPs, sold few lemons, and still holding and accumulating as no need to sell to retire at this stage.
    During that time due to capital growth and never paying $1 off from Principal (always IO for IPs), have also pulled out two titles, and always took opportunities of capital growth to pull out equity as opportunity to buy more, to have buffers, etc...
    Could sell few but as you build enough equity and lessen the accumulation the equity grows, with rents increasing too so LVRs decline in time.
    So yes it was a great strategy for us and we feel very blessed that we did it, took that step and not listened to all nay Sayers... (just look in the 20 years and see all that's happened yet why are prices still what they are?).
    No crystal ball just took the RISK and ACTION and kept investing and accumulating whenever opportunities and fiances permitted...then let ECONOMY and TIME do it's thing (you will receive many responses it will not happen now...as if others have crystal balls - who knows?).
    Best of luck in what you decide, and the idea is to accumulate...but whether you sell..., well you can decide upon that when you approach retirement, when you retire... to what, you should know that?
     
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