Sells out having drinks the other night.
And someone came up to me and said, Hey Ryan, I know you from online and I know you from
on property.
Can I sit down and have a chat?
And it was really awesome to have a chat with this person about their financial situation,
about what they're trying to do.
And I kind of wanted to share this with you guys cause I thought it was a really interesting
conversation.
Now I won't say who it is because obviously I want it on a privacy and things like that.
But I'm sure if you're listening to this, you'll know who you are.
If you guys ever see me out in public, feel free to come and say hi.
I always love to meet people and have conversations.
As I've mentioned in other videos, I love talking about money.
So if someone comes up to me and they're like, I know you from on property and we get to
talk about property, we get to talk about money, we get to talk about finance, then
that's just gonna make my day.
So if you see me, feel free to come and say hi.
So basically having beers, we sat down and chatted for about 10 or 15 minutes and just
this person laid out their situation with me about how they are looking to purchase
an investment property, but they got stuck in order to get lending.
So they already owned one property, they own their own home and they're on this journey
where they want to do the two properties to financial freedom strategy or they want to
do a version of that and then want to start building up their passive income through investing
in property.
But they were kind of stuck in terms of getting lending.
They had just had a child as well.
And so obviously as you have kids and it makes it harder, but what was really cool about
this situation was how we're able to look at some ideas of potential ways that they
could move forward.
Maybe not right this second, but when the partner goes back to work, then they may be
able to get lending despite the fact that the mortgage brokers said they couldn't borrow
money unless they earn x amount of dollars.
And this I think is really important for everyone out there to think about as well, because
sometimes you'll go to a mortgage broker and you'll lay out your situation and you'll lay
out your goals.
They will then interpret that and tell you a yes or no, yes you can borrow or no, you
can't borrow.
It's often very important at that stage to say, what do I need to do in order to be able
to borrow?
And they were given an answer that is who you need to earn x amount of money that exceeded
what they were able to do.
And so they felt stuck, but there was actually other things that they could try as well.
So it's very important that you find a good mortgage broker and that you looked down different
avenues as well.
So you kind of mortgage brokers don't really give you the answers into all of the different
things that you could do that might give you the most obvious one that is not actually
achievable.
But yeah.
So let's talk a bit more about this conversation.
So they owned, they own their own home that they were living in at the moment and there
were actually looking to purchase another property that was going to be another home
that they were going to live in.
So they were moving towards actually moving house into this new property.
So the first thing to look at when you speak to your mortgage broker is to assess whether
or not lending requirements or how much money you can borrow is going to be different, whether
you're borrowing to buy your own home versus borrowing to buy an investment property.
So given the APA guidelines, it can actually be harder for investors to borrow money rather
than poor people borrowing money to buy their own home.
So you need to speak to a mortgage broker about this.
I just got something in my eye.
He need to speak to a mortgage broker about this because they will know the ins and outs
of it, but it can be very different looking at purchasing your own home and turning your
existing home into an investment property versus actually looking to buy an investment
property.
So I have heard of people doing this where they kind of home hop in the fact that they
will buy a place as their home.
They will live in it for whatever the minimum required time is.
Maybe it's six months, maybe it's 12 months, maybe it's longer, and then they will move
out and then turn it into an investment property.
So speak to a mortgage broker about whether this is possible for you, but for this person,
that was one of their options.
First, let's go back to the mortgage broker.
Let's talk to them about buying this as our own home because when they did the assessment
originally they were just talking about buying an investment property.
The other option they had is that they had the ability to potentially build a granny
flat on the property that they were living in.
Now this can be beneficial when it comes to getting alone just because it's going to improve
your cashflow situation quite dramatically, especially being in Sydney.
I'm not sure if the property was in Sydney or not, but building a granny flat for around
$120,000 and then being able to rent it for around three or $400 per week is a significant
rental yield for that property and it's going to boost the rental yield of your overall
property as well.
And that is income that the banks are going to take into account when it comes to deciding
whether or not they can lend you money.
So they will look at the income from your investment properties.
And so if you have income coming from a granny flat, you have income coming from the property
as well, you're going to have a higher yield on that property and that may be what you
need to push you over the line.
This person in particular I think had some profit share in a company as well.
So banks don't necessarily identify that as income, but that profit share could have been
used to help build that granny flat as a deposit in order to get the loan.
And I'm not sure whether they could get a loan for the granny flat or not.
Probably be somebody to talk to a mortgage broker about.
But if they have a significant amount of money, uh, in terms of profit share that they could
use as a deposit for the construction line on the granny flat, then there's a good chance
that they could probably get that over the line.
So if you can't get lending for your next property when you're talking to your mortgage
broker, talk to them about getting a loan for a granny flat.
So generally that's probably going to be a construction line and talk about how much
of a deposit you need, whether you could get lending for that.
But then it might also be useful to go through the scenario of, okay, let's say that we built
this granny flat.
Let's say that we have x amount of rental income coming in from this granny flat, how
does that then affect our borrowing capacity and would that allow us to jump into another
property quicker or would they actually hold us back?
So if you have a good mortgage broker, they could go through this with you.
Obviously you don't want to mortgage brokers and who knows?
This may change with the findings of the Royal Commission that just happened, but this may
change.
But mortgage brokers and they get paid when they actually provide you with alone.
And so you don't want to be super annoying to your mortgage broker, but if you're an
honest and up front person, you're trying to get loans, then they should be able to
help you run through these scenarios and work out what's going to be best for you.
So yeah, looking into building that granny flat, we could have been a good option for
this person.
Even if they can't, let's say it doesn't help them be able to borrow.
Let's say they're in a position where they go back, they talked to the mortgage broker,
they run through the scenarios of whether or not they can borrow and they could do a
granny flat, but that won't help them move into a second property in might actually be
worth doing the granny flat anyway because you're going to get the rental yield from
that property.
So that's going to give you more of a buffer in terms of rental income and in terms of
cashflow that might push your property into being positive cashflow or it could just help
your life in general because you've got extra money coming in on top of the expenses of
owning that property.
And so that just could help your overall financial situation allow you to pay off debt quicker,
allow you to save a deposit faster as you move towards being able to buy your next property.
Yeah, or it could just help you pay off debt.
So even if they can't move forward into the next property or maybe you can't move forward
into your next property, it might be worth looking at whether or not it's worthwhile
to build a granny flat because getting a 10 1112 maybe even 15% rental yield and being
able to use that to pay off debt and pay off debt faster could be a really smart thing
for you financially.
So definitely something to look into if you're out there and you own property but you can't
borrow in order to buy again or you don't have a deposit in order to go again, obviously
you'll still need a bit of a deposit to build the granny flat and get the construction loan
for that.
So you will need some money to put down for that.
But yeah, definitely something, something to consider.
But that was a really good conversation and that happened just over 10 minutes.
As we were both drinking a couple of beers, we ended up being at the same venue and that
person recognize me.
So if that's you and you recognize me and you want to come and say hi, please do, I
love meeting you and maybe it'll lead to more videos like this where we can share our knowledge
with everyone out there and you can learn from that situation.
Now obviously I'm going to respect everyone's privacy and as you can see, I didn't talk
about any figures or mention the person's name.
If you are okay with me mentioning your name and stuff like that, then obviously you can
let me know, but I just felt like this was a really interesting circumstance that even
through the conversation with this person I learnt something like, I know these things,
but then you have the conversation and you realize, okay, this person hasn't thought
about this and other people maybe haven't thought about that.
So I learned about stuff just having the conversations as well and I'm really grateful that so many
of you out there are enjoying the content at getting something out of it and a moving
towards financial freedom as a result of the stuff that you've heard and listened to on
this channel.
So super grateful for, you know, anyone that comes and says hello, I'm sure in Sydney I'm
going to meet a whole bunch of you.
And maybe in future we'll do a meetup or something as well where we can come and hang out.
So it'd be a property meetup where it's not about trying to sell you something, you know,
like a lot of them are and it'll just be one full of chilled people who, uh, you know,
just on their way to financial freedom who have the same goals and have the same interests.
And so rather than it being some sleazy property Meta us, I've been to some sleazy property
meet ups and I absolutely hate them.
Rather than that, it could be a call meetup where we just hanging out and just have a
good time, have some beers or drink some coffee depending on when we do it.
So yeah, if you're interested in doing a meetup in Sydney, I'm in the Sutherland Shire, so
I'm in Granola, so probably be around here somewhere or we could do it in the city in
Sydney.
If you're interested in something like that.
And you're in Sydney.
Please leave a comment in the description down below and we could go about making that
happen.
Thanks so much for tuning in today.
Thanks so much to you know who you are for coming up and having the courage to say, hey,
to sit down, to share part of your journey with me.
I really appreciate it.
And to everyone else out there, I wish you the absolute best in your property investment
journey and until next time, stay positive.