One bank trap

[Frezzinghot]

This is somewhat of an update about my finance journey, and the real issues of falling into the one bank trap. It's no coincidence that many people warn of getting into this situation. It is quite clear that many banks want to have as much security over you as a backstop to them investing with you.

Knowing this would limit my chances of moving the pawns on the chess board in my favour, nevertheless I got greedy and wanted more borrowing, I fell into the one trap I had been warned about, the bank had me by the balls so to speak. Well today I released their tight grip on them and have finally released security on one of my rentals, this will allow us to determine when and where we distribute the equity should we need/want to liquidate, also we can get access to more funding using RC increase. (2nd tier). Huge gain for us as we are building a business on the back of salaried wages, no easy task.

I feel the next stage for us will be around selling as some stage in the future, although I am not to keen on losing the asset in favour of a new car and short holiday.

So this post is really about sharing my mistakes and how we managed to come out the other side, there is no doubt that atm finance/rentals/business is tough, but I seem to have found a way to continue growing my assets, income and future prospects by hanging tough and not reacting by selling up.

So grateful I have taken the right advice about my investing, the only way is up and I see the other side being much brighter after all the struggle. A strong mindset is required.

Happy investing!

[donna]

^^ thanks FreezingHot. You will find it in our newsletter due out this week.

How did you manage it? Was it as straightforward as having enough equity in your portfolio to release one property?

I ask because I am wondering if it is this easy when you get within a decade of retirement age.

cheers

Donna

[Frezzinghot]

^^ thanks FreezingHot. You will find it in our newsletter due out this week.

How did you manage it? Was it as straightforward as having enough equity in your portfolio to release one property?

I ask because I am wondering if it is this easy when you get within a decade of retirement age.

cheers

Donna

To be honest, we were thinking the banks were going to ask for our 1st born, but it was easy as getting our lawyer to draft up a letter to withdraw the security. This was based on our brokers advice. From the day we applied for the release and it actually happening was 3 days. Very quick.

I guess if the banks rules about LVR set in stone, why would they need to ask for a full accessment of our financials. One tip our broker said was when we ask for the security release was to stick to the facts only, not go into details of why we are doing it. And quite Frankly why should they even know. The broker said in most instances, if the bank has enough security they are happy. No need to alarm them with any details about what we do with the IP after release. Makes sense.

[Frezzinghot]

^^ thanks FreezingHot. You will find it in our newsletter due out this week.

How did you manage it? Was it as straightforward as having enough equity in your portfolio to release one property?

I ask because I am wondering if it is this easy when you get within a decade of retirement age.

cheers

Donna

Also could the banks be softening, do they now recognise the market already hit rock bottom months ago? My properties in Papakura are on the up up up^^^

[Perry]

If you decide to sell one, seems sensible to sell one that the bank still has it's claws into.

[Frezzinghot]

If you decide to sell one, seems sensible to sell one that the bank still has it's claws into.

Fair point. Not being sold atm only leveraged.

[Jeffa]

Apologies for going off topic FH

I have stupid family and extended family members

One inherited a mortgage free family home 20 years ago.. and can’t keep up with the rates about 3k per annum

My wife paid for it, my strong principles also told her if you pay for it again, you can live with her because you are paying her to make bad decisions.

I attended a funeral last month, the family had no money to bury the loved one, I’m guessing it was 20k or so? I gave 2k out of respect but refused to pay the remaining balance out of principle (we have a very large family)

This example and other similar ones go on and on in my wider family, but these examples represent 80% of the population

Sheep brainwashed into borrowing money to buy something they don’t need to make them believe happiness can be achieved from a Sunday afternoon at Westfield mall.

The beast controls the corporations, the corporations control the fools

[Frezzinghot]

Apologies for going off topic FH

I have stupid family and extended family members

One inherited a mortgage free family home 20 years ago.. and can’t keep up with the rates about 3k per annum

My wife paid for it, my strong principles also told her if you pay for it again, you can live with her because you are paying her to make bad decisions.

I attended a funeral last month, the family had no money to bury the loved one, I’m guessing it was 20k or so? I gave 2k out of respect but refused to pay the remaining balance out of principle (we have a very large family)

This example and other similar ones go on and on in my wider family, but these examples represent 80% of the population

Sheep brainwashed into borrowing money to buy something they don’t need to make them believe happiness can be achieved from a Sunday afternoon at Westfield mall.

The beast controls the corporations, the corporations control the fools

Not at all. I have the same size extended family, and see the same stupid shit happening, No one sees me as a beakon of light or hope, not that I want to be seen in this way. But I would like to see my family members succeed! But sometimes people have to go through difficult times to find themselves. So many of my family members now renting homes instead of finding a way to buy. As we move into the next cycle, how many of them will be able to buy their own home, let alone buy any assets? Id say not many. I will vouch for my own children, they will learn the way things work or I have not done my job! Im not going to let them be tax slaves like I was.

Anyway things are good for us now, My assets are growing and I feel on top of the world, next year is going to be great, may even add in another property or 2.