No wonder the rich get richer - they can pay other people to work it all out for them

I honestly think that there is money to be made out there, but it is damn difficult wading through the piles and piles of information to find the best way to go about it!

Lets take for example borrowing for your development project.

You can borrow as private investors, get the standard investment loan (making sure you have enough for the deposit)

You can borrow as a private investor get the 105% loan which covers the cost of the property and the stamp duty, mortgage stamp duty, transfer fees etc. (there is calculators everywhere to help you work this out, here is just one example http://www.yourmortgage.com.au/calculators/)

As a property developer you also have the option of borrowing against the potential value of your investment. So if your subdivided, developed property, will be worth $800, 000 when it is completed. Then technically you could borrow up to %90 of this value. I'm still trying to find out how this works, i.e. do you get a surveyor in to do up the plans and then get the bank valuer in or what? I'll let you know how I go with that.

I have even been informed that it is possible to capitalise the interest on the loan. So rather than struggling to pour in your $3000 (just made this up - use the calculators above to get a real figure) a month in interest payments, you can let that interest accrue on the loan and pay it off when you sell further down the track. Obvious pitfalls here, like say your interest for the year exceeds the capital growth of the property even after development!! But in that case you really have stuffed up and you probably should have brought shares instead :-).

This leads to another tip do your figures before hand, all the costs including interest, professional fees, stamp duties, development costs need to be taken into account when working out the viability of any property development, unfortunately identifying all those costs can be difficult in themselves, I'm sure there are still going to be costs that come up and bite me on the arse!

In the beginning....

In the beginning there was nothing! That's right a big fat nothing, actually really it is negative nothing, I owe something (a lot of something!) before I can call it nothing. But hey you've got to start somewhere. Being that I have had such a fun time to date, trying to track down information regarding property investment, the pitfalls, the pluses where to start who to trust (ah that word trust isn't that a doozy) etc etc, I thought I would share my trials and tribulations as I go through the process of buying my first real investments property. I say real because I owned a holiday rental in Bussie (Busselton for those not indigenous to Western Australia), for a couple of years which did rather well in the boom, and gave me a taste of what it might be like to make some real money out of property investment. In truth it was more luck than good planning or investment strategy that got me to that stage.

I will start by sharing this real gem, nobody that you speak to will tell you the same thing. Its up to you to pick out the gems from the duds and the ones in between. Quite frankly you have to do your own homework ask your own questions, oh yes I'm going to say it you know I am - there is no such thing as a stupid question! (Well apart from maybe where is the any key!)

Hopefully I can give investment hopefuls some idea of what we went through (yes there is a we, my husband, my brother and his partner). I know investing with family, but lets face it with the cost of real estate these days investing on your own especially in the beginning is really difficult. I think investing with family is a valid idea, and have been told by a mortgage broker that some banks are now cottoning onto the idea and are developing products specifically for that market - stay tuned!