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Young millennials are getting ahead by availing the ‘live at home statuses. This certainly helps them to leverage into investment properties.

Of course it’s important to manage risk if living at are home and investing and if you may move out on your own.

When Adam reached out to us, he owned one investment property. Adam had been looking at his next steps to build on the portfolio further.

About Adam: Adam is a single income earner and in early 30’s, living with family. Alan works in the financial services industry. His income is $75,000.

Where he was and what he wanted to achieve:

Adam owned one investment property when he reached out to us.

The problem Adam had been running into speaking to various bankers and brokers was – being told of the lowest rate and his borrowing power.

Adam was looking for a strategy, covering…

  1. How to maximise borrowing
  2. Maximise valuations and hence equity pull
  3. Maintaining correct loan splits and structures
  4. Mapping out a road map to his next purchase

He also wanted help with implementing the step by step plan to not only maintain current finance set up for his existing property and accumulate the next investment property with the right structures.

Proposed Solution with a Tailored Plan:

  1. Valuation shopping and restructure of finance for the existing investment property loan which allowed maximising equity pull
  2. Minimise cost by applying cash flow reduction strategies
  3. Tailored strategy to purchase of the next investment property
  4.  Equity pull allowed for extra funds for other asset class investments

Results: Adam purchased his next investment property within 2 months of the restructure

Funds Available: $175,000

Investment Property (IP) 2:

Purchase Price IP2: $450,000 at 80% Loan to Value Ratio (LVR)

Funds Used Up: $115,000 approx. ($62,500 equity remaining, held as buffers for property maintenance and investing in other asset classes e.g. shares)

Total Property Ownership including Home: $1.04 million approx.

Growth Projection: If the properties owned grow by a conservative 5% per annum, Adam will be adding $52k to his wealth every year, compounding year on year. In 10 years, this will be more than $654,000 in net worth. At the same time Adam’s property rental income will increase overtime.

Property doesn’t grow in a straight-line basis. Adam portfolio may grow more in one year and less in another.

Adam can now save up further and using the outstanding equity, either plan for investment property #3 or choose another asset class to diversify.

What’s Next for Adam?

Property Twins team will continue monitoring the value of Adam’s portfolio to see opportunities around equity release, savings and purchase of further investment properties.

As you work through your own goals, dreams and aspirations, you can see that starting with your first investment property is possible for you. At the same time you can have the potential to go beyond the first property whenever you are ready.

This is possible by having a ‘step by step’ plan tailored to your circumstances, established upfront by the Property Twins to enable you to keep moving forward.

If you are a first home buyer, upgrader, looking to refinance or to buy an investment property Book a Kickstart Call with the Property Twins Team
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Note: Please ensure you always seek specific specific credit, tax, financial, legal or investment advice. Property Twins' Blogs are not a substitute for personal and specific, taxation, financial, legal or investment advice

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