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Jamm165 Needs Serious Help

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Oh O - The preverbial is about to hit the fan Jamm166 needs help. :ph34r:

First time property investor

Hi, for years now I have wanted my husband and I to get into property investing, however for one reason or another, we kept putting it off. I was staggered last night when I read Jan Somers book, More Wealth from Residential Property and thought that in Chapt 4 on Who do you ask for advice? that it must have been us that was interviewed. That was us to a T!

Twice now, I have inherited a small amount of money when each of my parents died. The first time 17 years ago when I was advised by an accountant to put the money in the bank. Interest rates were good at the time. We'd never had any money before and this seemed a good idea at the time. However that proved too tempting and before long my small inheritance disappeared on holidays, video cameras, new car and the like.

Then 5 years ago, my father passed away and another small inheritance came my way. We went and saw a financial advisor and was invited to take out a line of credit, put some money into managed funds and go on a holiday. All of which we did.

Since then however, we have pulled the managed funds, when we could see they were loosing money fast and stopped using the line of credit for personal use. We went saw another 'independent' advisor, thinking this time they would help us reorganise 'all' our finances and advise us how to get some growth towards our retirement.

Here I should state that I am 50, working part time and my husband is 58, full time on a very basic wage.

We were advised to clean up the line of credit and place what money as left into shares and borrow against the line of credit invest in more shares. One thing I asked was that we had no managed funds, however we still ended up with a small fund. The shares have been doing ok, so there has been some growth and my husband has dabbled a little on his own, but no great winners.

I feel we are running out of time, and being 'baby boomers' we will be looking for a pension in the next 7 years for my husband and 15 for me. If only we didn't have to go down that road and working on a retirement ready reckoner we will be struggling.

What am I asking you might say? Well, I wondered if there was anyone else out there who may have been or are in the same predicament as us. No savings, small amounts of super as only basic wage earners, own our own home, own 2 motor vehicles, with our only other debt being a credit card.

Obviously we have no deposit for a property, however from the reading I have done, that shouldn't be a problem.

Who do I go to first? The real estate agent and start looking at what we need to borrow, or a mortgage lender? Will either give us advise on how to get this up and running.

I must add too that we live in a country town on the west coast of Australia.

Looking forward to hearing what others might say on this to ease my anquish.

Regards

Jaymm165

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Guest Bart of Darkness
Oh O - The preverbial is about to hit the fan Jamm166 needs help.

The kind of help provided by gentlemen in white coats?

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Talk about too late!

This is what makes me chuckle about 'sheeple'.

It's never too late. I bought a BLT flat in May this year at around £20k less than it's value. The reason was that the currant landlord had tenants but need a quick sale before April 6th for tax reasons. Unfortunately for him, the whole process dragged on longer than expected so he missed his deadline.

His tenants decided to move out in Feb and so he gave me the keys to start renovating..... I changed the kitchen and bathroom on a tight budget (Ebay kitchen but it was moder, ideal and units were already built :-)

A flat in the conversion my flat is in sold last week. It might not have achieved the full asking price but it sold so quickly it must have sold for £25k more than I paid for mine.....and my flat has an extra bedroom and doesn't have an open planned kitchen taking up half my lounge like that one did.

I have a tenant at the moment and will see how the market goes, but I could sell for £30k more than I paid....subject to capital gains tax. Just because prices have slowed down (I read the property papers all the time and prices dropped a couple of years ago and are now roughly the same as 2 years ago, so not dropping any more) there are some bargains out there that will make you money if you take a calculated risk.

If you own your own home, you could remortgage your home for the deposit.In the UK, we have to put down a deposit of 15% - 30% for a BTL property!

In a nutshell, you could make several thousands of your Austrailian dollars in less than 5 years if you find the right property and are willing to work hard if it needs work doing to it. I only spent 3 months renovating my flat , and I was still working full time.

It will help if you see a financial advisor you can trust. He/she will ensure you get the best deal available, and not go for a lender because he/she will be rewarded more for their service. The best thing to do is to see an advisor who is as local as possible. Knowing that you could turn up at any minute tends to keep them on their toes. For my first property I used an advisor in the city (London). Because he was 15 miles away (in London that can be a 2 hour drive) if he hadn't done anything since the last time we spoke, he would pretend not to be in the office.

Good luck. Don't make any hasty decisions. Wait for the right property at the right price and enjoy your early retirement.

Gary

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It's never too late. I bought a BLT flat in May this year at around £20k less than it's value. The reason was that the currant landlord had tenants but need a quick sale before April 6th for tax reasons. Unfortunately for him, the whole process dragged on longer than expected so he missed his deadline.

...

I'd like to meet this "currant landlord". Does he know the California Raisins?

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I don't doubt that there are opportunities to be had if you can capitalise on a forced sale, and those are starting to appear now.

However, having watched the Sarah Beeny programme and seen disasters in the making week after week where the unfortunate morons involved usually just about break even or make a loss (witness the properties featured in the programme a year ago that are still for sale)...

I assume people get into property renovation as "everyone knows about property", i.e. a homeowner ought to know what's to be done and be capable of achieving it if they own a home themselves, the people involved really are clueless about renovation from a business perspective.

That's why the people in the programme didn't decide to start up a PR consultancy or a web design business - because they don't have the knowledge needed to do so.

However they have little more knowledge about how to renovate a property successfully and having been given the olive branch of a real expert on site to advise usually ignore expert advice and **** it up.

Those people were saved by the rising market, but would not be so fortunate now. Yes, there is money to be made - but the fact that the property is losing equity from the day of purchase regardless of the price you paid means you have to work fast and get it right. People who know what they're doing can win here, for most people, it's a disaster waiting to happen.

The next series of that programme will be interesting to see how people fare in a falling market.

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Clearly as this couple is approaching retirement, it is the ideal time to speculate with what little they do have on an asset class that so clearly is depreciating, despite what enworb says.

My real question is why were they not saving for retirement in their 30s and 40s like most should? Oh yeah, the money was too tempting and they spent it on "stuff". Clever them, then.

EDIT: spelling.

Edited by gone west

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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