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Critique My Investing Method?

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OzziePropGuy | 10 Mar 2015, 08:15 AM Agree 0
Hi all,

I'm new to all this so first off could someone recommend any resources, courses, books to learn with (Perth specific if possible)? I'm looking at traditional buy and rent out vis agents investing.

Ok so this is my method based on my research from learning off of free resources on the web.

2 bedroom units renting for about $330/w - $350/w buying for $270K - $350K.

Why? As from my research in the areas I want to by from censes this is the most popular and I have rented these to living in before and a lot of mates have to. Plus if I look at the price jump to 3 bedroom places and the extra $100/w in rent you get can't really be justified with paying an extra $150K or so for bedroom 3.

Funding: Cash...

So my method is just to come in and pay cash. At the start anyhow till I have about 10 units. I'm working hard to scale my business and I'm on the brink of having enough for one unit in the bank right now.

Why: As I went through a bankruptcy that only ended recently (the 3 years period I mean) and the rates I'd get for a loan would be ludicrous.

So I'm focusing on scaling my business like mad to make more money and pay cash vs. trying to find property deals that will be $100/m positive cash flow on high interest rates.

So my question is this. Should I bite the bullet and take out say $100K loans on those higher interest rates so I can move faster with acquiring these units. As I will be able to move faster if my company only has to spin off $170K - $250K each time vs the full amount.

Kind of a unique situation I know but I've not exactly one for long term plans and paying off loans off for 30 years to see the full profits. I'd rather spend 3 years working 5x harder in my business and produce enough cash to buy 30 of these units outright. Then I have about $10K/week in rental income. This to me seems like a much better and faster option then trying to acquire properties at a slow rate for years. I want to retire in 5 years when I'm 33 not 35 years when I'm 63!!
  • Elliot Black | 10 Mar 2015, 09:41 PM Agree 0
    Hey OzziePropGuy,

    In terms of resources I would recommend trying to get your hands on this book: dontexpectinspect.com.au
    This guy is a Perth based businessman, and has a lot of useful tips for first buyers or investing. I managed to get one preordered, but there are also some ebooks floating around Amazon I think.
    Hope this can help!

    Goodluck,

    Elliot Black
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