澳洲Australia property Hard Cash Lending or Investing | Sydney


在澳大利亚 I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo


I have been looking for opportunities to get into the property market since the time I arrived to Australia, which was nearly 4 years ago, but still haven't figured out what suits me more. So, I am in need of outside advice -

my situation: 28yo, 400k cash sitting in the bank at 4-5% annually back at home.

options -

1) buy 1 bedroom unit in Melbourne for myself.

pros: live in a paid out appartment for the rest of the life with little worries.
cons: overheated property market, so I would be paying top price; no income from this type of investment whatsoever.

2) buy 1 bedroom unit in Melbourne and lease it out;

pros: extra income to pay for rent in the current place ($1k/month); having a property which might appreciate in the future.
cons: tenants trouble.

3) go the property investor mode full speed; 400k could pay deposits for a few properties, surely?

pros: becoming a property investor, which seems like the right thing to do.
cons: have no clue about investing into the property; understand that the market is currently not in the best condition for buyers; troubles of getting loans from the banks (need to get a normal job to prove my credit worthiness, etc).

4) hard cash lending to property investors.

pros: quick return on investment; no tenants or banks worries.
cons: have no clue about the subject.

Hard cash lending is exactly the kind of method I had in mind when I started looking for money making opportunities for people with cash in the bank. However, I haven't found where to read about it in detail.

Does anyone do it on Somersoft forum or can refer me to another place where it's done? At the this early stage I would like to know about the risks associated with it and if this system is even viable in Australia?  

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Before you do anything you need to seek some legal and taxation advice as there are few strategies you can implement to improve asset protection and taxation.  

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Hiya

Im going to get in before the other do :)

What do you actually want to achieve financially, and what risk tolerance to financial loss do you have ?

The answer to that will sort out 50 % of your questions

ta
rolf  

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Stayer said: ↑
4) hard cash lending to property investors.

pros: quick return on investment; no tenants or banks worries.
cons: have no clue about the subject.

Hard cash lending is exactly the kind of method I had in mind when I started looking for money making opportunities for people with cash in the bank. However, I haven't found where to read about it in detail.

Does anyone do it on Somersoft forum or can refer me to another place where it's done? At the this early stage I would like to know about the risks associated with it and if this system is even viable in Australia?Click to expand...
You mean caveat lending? Yes this is a growth industry - you can get returns well in excess of 2% per month but it is riskier than other lending.  

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Rolf Latham said: ↑
What do you actually want to achieve financially, and what risk tolerance to financial loss do you have ?Click to expand...
Currently, it costs me around $1700/month to live in Australia. My interest rate yields me just under $1000/month. I would like to get to the point where my expenses are covered passively.  

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Hmmm going into the development lending game when you know nothing about it is a great way to lose your shirt. Its one way to learn though.

And 400k is not that much money for commercial lending.  

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Aaron_C said: ↑
You mean caveat lending? Yes this is a growth industry - you can get returns well in excess of 2% per month but it is riskier than other lending.Click to expand...
I read first about Hard Cash Lending at theFastlaneForum (check this thread). In simple terms, it works as such: an investor is going to buy a foreclosure but can't get money from the bank for a certain reason, so he goes to private investors to raise funds. He gets the money, buys the property, resells it, pays high comission on the short-term loan, everyone profits. In worst case scenario the lender ends up with the property bought under its current value, he can sell it and at least get his money back thus the risk is minimised.

Probably this method is still early for Australia as housing market is still relatively stable here. But, I thought it is something worth looking into for the future.  

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boomtown said: ↑
Hmmm going into the development lending game when you know nothing about it is a great way to lose your shirt. Its one way to learn though.Click to expand...
Yeah, I definitely agree with this. You probably need to have a great deal of experience in the property market to even be offered such deals.  

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Stayer said: ↑
4) hard cash lending to property investors.

pros: quick return on investment; no tenants or banks worries.
cons: have no clue about the subject.

Hard cash lending is exactly the kind of method I had in mind when I started looking for money making opportunities for people with cash in the bank. However, I haven't found where to read about it in detail.Click to expand...
This is always a good place for a read to see what happens in the real world with other peoples money..

http://www.asic.gov.au/  

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Stayer said: ↑
Currently, it costs me around $1700/month to live in Australia. My interest rate yields me just under $1000/month. I would like to get to the point where my expenses are covered passively.Click to expand...
buy a house with granny flat that pays 600 a week in rent

after costs youd be close to your 1700 ?


ta
rolf  

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Stayer said: ↑
I read first about Hard Cash Lending at theFastlaneForum (check this thread). In simple terms, it works as such: an investor is going to buy a foreclosure but can't get money from the bank for a certain reason, so he goes to private investors to raise funds. He gets the money, buys the property, resells it, pays high comission on the short-term loan, everyone profits. In worst case scenario the lender ends up with the property bought under its current value, he can sell it and at least get his money back thus the risk is minimised.

Probably this method is still early for Australia as housing market is still relatively stable here. But, I thought it is something worth looking into for the future.Click to expand...
Yes it's called mezzanine finance. It's nothing new but it can be lucrative if you can find a good deal as clients who use these funds are always VERY desperate and will basically pay you anything for the money.  

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Aaron_C said: ↑
Yes it's called mezzanine finance. It's nothing new but it can be lucrative if you can find a good deal as clients who use these funds are always VERY desperate and will basically pay you anything for the money.Click to expand...
Thanks, will have a look into it  

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Aaron_C said: ↑
Yes it's called mezzanine finance. It's nothing new but it can be lucrative if you can find a good deal as clients who use these funds are always VERY desperate and will basically pay you anything for the money.Click to expand...
I know littel about it, but I expect % rtn on capital will be linked to likleyhood non rtn of capital.

ta
rolf  

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Stayer said: ↑
Currently, it costs me around $1700/month to live in Australia. My interest rate yields me just under $1000/month. I would like to get to the point where my expenses are covered passively.Click to expand...
100K BHP gross yield of 5.34% = $5340 pa
100K CBA gross yield of 8.74% = $8740 pa
100K WOW gross yield of 6.68% = $6680 pa
50K ASX gross yield of 8.5% = $4250 pa
50K QBE gross yield of 5.83% = $2915 pa

Total = $27925 or $2327 per month + any CG along the way.

Just another option for you to consider ... not recommending it in any way.

(PS: Gross yields incl franking credits and based on todays closing price)

Cheers,
Oracle.  

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$1700 per month is $20,400 per year. Tax on this amount would be virtually nil. So there could be the added benefits of franking credits if investing in shares, so much less capital may be needed to generate this amount.  

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Stayer said: ↑
Currently, it costs me around $1700/month to live in Australia. My interest rate yields me just under $1000/month. I would like to get to the point where my expenses are covered passively.Click to expand...
I'd be more than happy to give you $ 1,700 per month fixed for 5 years if you gave me access to your $ 400K for 5 years.

Do we have a deal ??  

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Hahaha Dazz can do math.  

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Stayer said: ↑
Currently, it costs me around $1700/month to live in Australia. My interest rate yields me just under $1000/month. I would like to get to the point where my expenses are covered passively.Click to expand...
First of all, you clearly need a new interest rate... If you had your $400k invested at 5% you'd be getting your $1700 p/m.  

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Stayer said: ↑
Currently, it costs me around $1700/month to live in Australia. My interest rate yields me just under $1000/month. I would like to get to the point where my expenses are covered passively.Click to expand...
How do you manage to survive on 1700/month? Rent alone in inner city melbourne or sydney will cost about 1600/month or 400/week for 1 bedroom apartment.  

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china said: ↑
How do you manage to survive on 1700/month?Click to expand...
....who cares.....Do we have a deal ??  

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