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Discussion in 'Investing Strategies' started by Triu, 7th Sep, 2006.

  1. Triu

    Triu Well-Known Member

    Joined:
    1st Sep, 2006
    Posts:
    161
    Location:
    WA
    Can someone please advise or help! I want to buy and renovate and sell property. Ist this a good strategy even though i pay tax i have cashflow in my hand. Or is there another way like buy renovate then revalue then redraw equity for living expenses etc. Are you classed as being in the property business this way?

    I just want to hurry up and leave my boring government job and get out and work hard!

    please help

    thanks

    Triu
     
  2. Redwing

    Redwing Well-Known Member

    Joined:
    9th Jun, 2006
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    476
    Location:
    PERTH..WA
    Why not do it as a PPoR, thereby saving CGT untill you get to alevel that you can diversify..

    What is your current situation?
     
  3. Triu

    Triu Well-Known Member

    Joined:
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    Location:
    WA
    Hi Redwing my current situation is this. I have a PPOR already with value of $500K with $200 owing. Just bought 1st IP with a LOC of $80k set up against it to carry any shortfall as it will be -ve geared. I have to do some cosmetic work to it painting, gardens etc. I can onsell but the market here in WA is going so strong if i sell i will make a profit of $70k at least but i am worried about losing future capital growth. My loans are cross collaterized with the bank. Is this okay for the first IP? i am currently geared at 78% but not sure why they had to cross collaterize. My broker said there was good and bad points about it.

    I am going to the Renokings workshop in October 2006 i hope to learn the right strategy from the start.
     
  4. TryHard

    TryHard Well-Known Member

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    17th Aug, 2005
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    863
    Hey Triu

    If your broker could specify what the good points about cross-collateralisation are, I reckon that would be a very interesting read ! Unless he means its just easier to get the money ...

    Cheers
    Carl
     
  5. Redwing

    Redwing Well-Known Member

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    Location:
    PERTH..WA
    RenoKings is very quick cosmetic makeover (coupla weeks) however, from what i've heard some of the makeovers dont apply WA style Properties,specifically exteriors??

    The workshop should be be very interesting none the less.

    Have you looked at Peter Spanns LeapFrogging strategy as well?
     
  6. Triu

    Triu Well-Known Member

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    1st Sep, 2006
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    Location:
    WA
    Hi Redwing what is Peter spann leap frogging strategy? I just want to leave my govt job very boring!!!! and become a full time property investor! any ideas how to do it?
     
  7. Tropo

    Tropo Well-Known Member

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    Location:
    NSW
    You'll find this strategy in P.S. book - " How you could build a $ 10 Million Property Portfolio in just 10 Years.
    :cool:
     
  8. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney

    Hiya Triu
    Leap frogging basically refers to the technique (most applicable in a rising market) of buying, renovating to add value, re-valuing to access created equity and using the power of leverage over and over again to build up your asset base.
    However, and please don't think that I'm trying to put you off the idea of quitting your job, you will require income from which to service the loans in the first place. Sure, you can attempt to go down the "positive cashflow" road (read one of Margaret Lomas' books for more information here) but you'll need a hell of a lot of property providing a steady enough income before lenders will consider you a safe enough risk to continue borrowing.