500K Cash For Properties Investment Advice

[chalknduster 0]

I have just cashed out an old property and plus some of my savings, I have 550k cash.

This is my plan for utilizing the 500k:

1. Buy a condo of 800k, pay 250k cash and the rest housing loan (no existing housing loan at the moment).

2. Buy another property - commercial with 800k worth. Pay 250k cash and the rest bank loan.

I wonder how possible is it? Is this the best way to fully utilized the 500k in properties?

Since I have a bank loan for cashing out an old property, will I still be able to get a bank loan for a commercial property?

What is the minimum rental yield for a 800k condo and a commercial property (either a shop or office)?

Currently I am servicing 2K monthly for the cash out property for 20 years (I'm 45 this year).

[Lauer 15]

I have just cashed out an old property and plus some of my savings, I have 550k cash.

This is my plan for utilizing the 500k:

1. Buy a condo of 800k, pay 250k cash and the rest housing loan (no existing housing loan at the moment).

2. Buy another property - commercial with 800k worth. Pay 250k cash and the rest bank loan.

I wonder how possible is it? Is this the best way to fully utilized the 500k in properties?

Since I have a bank loan for cashing out an old property, will I still be able to get a bank loan for a commercial property?

What is the minimum rental yield for a 800k condo and a commercial property (either a shop or office)?

Currently I am servicing 2K monthly for the cash out property for 20 years (I'm 45 this year).

I don't have the license to provide financial advice (as per MAS regulation), but would like to offer something which is often missing when people discuss property investment.

A property could be an investment class; equity is another class, so is bond, gold etc. The difference between them is the level of risk inherent with each investment class.

Whether an investment pays is all about the timing of the investment made, everything being equal. That is, assuming that the investment instrument is sound and is not a fraud.

Especially for property investment, and other investment that is leveraged.

Most people don't think too much about the leverage part of a property investment, because almost everyone they know of would buy property with a loan. Only the very rich would buy a property using cash without a loan.

When you buy a condo of $800K, with a loan of $550K, so there is a leverage of more than 200%. You couldn't get this kind of leverage % in bond for example, which is considered a safer class. Neither in gold investment. The leverage % is almost on par with share financing, and share/stock is a much riskier class.

After you bought it, and when the condo value goes up by $250K to a total of $1050K, then your paper gain becomes +100% when measured against the cash outlay of $250K.

Conversely.

After you bought it, and when the condo values falls by $250K, then your paper loss becomes -100%. If unfortunately you are forced to sell it, then the paper loss becomes a real loss.

There you could see, when the timing is right, the profit is substantial. When the timing is wrong, the cash savings could be wiped out.

How to get the timing right?

No one could tell you precisely when. If I know it, then I wouldn't have the bother to write this post?

Cheers!

[pantieileen 2]

I think he forgot 2 very important points

1) what's his combine monthly income?

2) outstanding car loans

How come only can cash out so little? I asked and I could cash out 900k coz got 2 outstanding car loans..regret lah extra 3rd car somemore if not can loan even more

Edited February 12, 2013 by pantieileen

[GMC 12]

1. Buy a condo of 800k, pay 250k cash and the rest housing loan (no existing housing loan at the moment).

$800k condo? $800k can't buy anything decent.

Residential rental market is bad.

2. Buy another property - commercial with 800k worth. Pay 250k cash and the rest bank loan.

$800k also can't buy any decent commercial property, even if you found one, the returns is abt 2%, not even enough the service the $250k mortgage.

$800k may land u up in some decent industrial property, yield is about 5%, enough to cover mortgage and make some money with the balance leasehold.

I wonder how possible is it? Is this the best way to fully utilized the 500k in properties?

Since I have a bank loan for cashing out an old property, will I still be able to get a bank loan for a commercial property?

What is the minimum rental yield for a 800k condo and a commercial property (either a shop or office)?

Currently I am servicing 2K monthly for the cash out property for 20 years (I'm 45 this year).

Best to buy a property with new tenancy contract signed to safeguard for the next 2-3 yrs. If you are interested, I have 1 onhand for sale which gives u 5% returns. I am not agt, just slowly liquidating my personal property.