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  1. #21
    Join Date
    Oct 2003


    I bought another one last night out of the paper - a 2brm unit with a garage for $105,000, market value is between $130,000 and $140,000. It will rent for $180p.w.
    Quoting Graemes post above, I wonder if you would be able to share your strategy for this deal with us?

    Is it a hold or trade?, as given the figures you quote it is not likely to be +CF, and knowing that you subscribe to P&I loans, the negitive CF will be considerable.
    Perhaps it is capable of more rent, or you are simply buying the 25% discount, with a view to using the equity for another deal - although the surplus equity is only around 7k assuming a value of 140K.
    Would really appreicate knowing your strategy as we can all learn from each other.

    Many thanks

  2. #22
    Join Date
    Nov 2004
    Timaru South Canterbury


    Cash +ve or -ve surely its a matter of timing buy today with no deposit or next week. month, year, decade or century when sufficient have been aquired.

    Do the maths - capital + rental income versus saving on capital costs.


  3. #23
    Join Date
    Jan 2005


    Graeme's purchase looks about neutral - slightly negative.
    80% of $105,000 = $84,000
    $84,000 @ 7.5% P&I over 25 years = $143.25 per week.
    Leaves $36.75 per week for rates, R&M, vacancies and insurance.
    Also have to factor in legals, finance costs (if any), valuations and the like.

    My guess: Graeme's going to clean it and flick it for a gross return of about $25k which will nett about $15k after GST and income tax.

    Am I on the money, Graeme?

    Gimme $20k. You will receive some well packaged generic advice that will put you on the road to riches beyond your wildest dreams ...yeah right!


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