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From ‘exchanging’ to ‘settlement’: How this property investor acquired five 'connected properties' at once

By Bianca Dabu
Properties, property investor, property investment, investing, property portfolio, Western Sydney, Southwest Sydney, Penrith, Melbourne, Wollongong, Brisbane

Smart Property Investment’s Phil Tarrant has recently added a block of units with five “connected properties” to his already impressive 12-property portfolio, which consists of houses, units, and townhouses located in Western Sydney, Southwest Sydney, Penrith, Melbourne, Wollongong, and Brisbane.

The new asset is five different properties on their own titles and was already "exchanged”, according to Phil, “Now, we’re just nearing [a] settlement.”

While the terms “exchanging” and “settlement” might be familiar to seasoned property investors, they might strike as unfamiliar to those who are just beginning to explore the business of creating wealth through property.

According to buyer’s agent Steve Waters, “exchanging” refers to the initial signing of contracts between the seller and the buyer.

He explained: “You control the property—yet in a cooling off period—depending on what state you're in, of course, then you exchange unconditionally. That's when your finance is approved and [when] the solicitors approve the contracts and what have you.”

“That means when you are locked and loaded, so to speak ... you are [awaiting] settlement. Settlement is when you actually take ownership of the property,” the buyer’s agent added.

Once you take ownership of the property, either the investor or the bank gets the title, depending on the clauses stated in the contracts. From the moment the assets are settled, the property investor becomes responsible for, basically, everything—from paying the mortgage to maintenance and repairs.

“Settlement is when you pop the champagne corks, and say, ‘Yes, I'm the owner of a new property,’” Phil said.

The process

Both Phil and Steve agree that the process to arrive at the settlement of five properties is pretty much “a big nightmare”.

The property investor sought the help of his financial team to help him navigate his way through, particularly his mortgage broker, who assisted him in giving out “nearly 100 pieces of signatures” on loan documentation and other agreements on paper.

According to him: “It pretty much covered a boardroom table, right? It's mad. I can't remember how many. It's nearly 100 pieces of signatures and stuff that needed signing for this. It's not for the fainthearted if you're new to investing.”

Phil invested in a trust, a structure considered complicated by many property investors.

“It is a complicated structure that you are investing in. There are multiple documents that you've got to provide … [and] on top of that, you've got five titles, so [there are] five different loans [and such],” Steve explained further.

Aside from the whole chain of signing contracts, Phil and his team also went through pest and building inspections “on unconditional finance” and other financing agreements. While there seem to be a little too much “moving parts” in this new investment, it has been an enjoyable learning experience for the property investor and the professionals he surrounds himself with.

Phil shared: “The finance has been fun as well … We actually spread it across three different lenders—two loans with one lender, two loans with another lender, and one loan with one lender, who we already had a pre-approval with.”

“This been a deliberate strategy to do that ... There's a lot of moving parts here.

“I've had a lot of people batting in my favour. I've had accountants involved and mortgage brokers involved, and [buyer’s agents] working with the conveyances to make this deal happen. It's nice to actually get here and say, ‘We've got these assets.’”

Tune in to Phil Tarrant’s portfolio update on The Smart Property Investment Show to know more about the benefits of buying in bulk, how it benefits his portfolio, and the opportunities it will bring as a hub for economic growth and development.

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  ["title"]=>
  string(72) "Mortgages in a tighter lending economy and why Brisbane is a good option"
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  string(72) "mortgages-in-a-tighter-lending-economy-and-why-brisbane-is-a-good-option"
  ["introtext"]=>
  string(255) "

Tune in to the latest episode of Property Showcase, the podcast with the inside track on the products and businesses that will help turbocharge your portfolio, maximise returns and make your overall investment experience seamless and stress-free!

" ["fulltext"]=> string(818) "

To hear more about these services, make sure to tune in to this episode of Property Showcase!

 Make sure you never miss an episode by subscribing to us now on iTunes!

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Son Pham is the accredited Head of Mortgages at Rethink Financing\/Rethink Investing. He has over 6 years\u2019 experience writing loans, over 12 years in the wealth management industry working for the likes of CBA, AMP and private practice and he is also a licenced financial planner (AFSL 326450). He has multiple investment properties that are cash flow positive which help pay his mortgage on his home and fund his lifestyle.<\/p>\r\n

Son is able to write all types of residential and commercial property loans.<\/p>\r\n

In this episode of Property Showcase, head of mortgages at Rethink investing Son Pham joins host Tim Neary to unpack how an investor should approach getting a mortgage in place with banks tightening down on serviceability.<\/p>\r\n

Hear from\u00a0Son\u00a0about:\u00a0<\/p>\r\n

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  • The pitfalls that he has seen people get into<\/li>\r\n
  • Interest only loans and if that is the way to go<\/li>\r\n
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    Whether it\u2019s building a successful property portfolio or investing in one of their Development Funds, Open Corp can help you through every stage of your investment journey. The team has 40 property specialists who collectively have been involved in over $4 billion worth of property transactions and the acquisition of more than 8000 homes and investment properties.<\/p>\r\n

    In this episode of Property Showcase, director of investment services for Open Corp Michael Beresford,\u00a0joins\u00a0editor of Real Estate, Tim Neary to share why he disagrees that the cooling market means that the best times are behind us.<\/p>\r\n

    In this episode, hear from\u00a0Michael\u00a0about:\u00a0<\/p>\r\n

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    • Why Brisbane is a good investment option right now<\/li>\r\n
    • How he wants to help clients take advantage of the current market<\/li>\r\n
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Mortgages in a tighter lending economy and why Brisbane is a good option
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Will Magee has had ambitions to enter into the Australian property market for quite some time, but it has been more than just finances holding him back.  Having been granted permanent residency just two weeks ago, Will is wasting no time and is now in the process of signing papers and finding his first investment property.

" ["fulltext"]=> string(2483) "

In this episode of the Smart Property Investment Show, Will joins host Phil Tarrant to share why he is purchasing his first property in partnership with his brother, discuss the complications that can arise from such a strategy, and unpack the ongoing plan for building a joint property portfolio with his brother.

Will will also share how they approached saving for their first property, why he is taking out the mortgage in his name exclusively, and share their savings plan for the year ahead.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

From property in Australia to a ski lodge in Japan
Mortgage Trusts, an alternative first step for property investors
Should a real estate title be in one person’s name only?

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A property investment plan years in the making
object(stdClass)#1184 (52) {
  ["id"]=>
  string(5) "18287"
  ["title"]=>
  string(75) "Regional Victoria showing up Melbourne in price performance, new data finds"
  ["alias"]=>
  string(74) "regional-victoria-showing-up-melbourne-in-price-performance-new-data-finds"
  ["introtext"]=>
  string(139) "

Median house prices in regional Victoria outperformed that of Melbourne in the June quarter, the latest REIV figures reveal. 

" ["fulltext"]=> string(2323) "

Median house prices in the regions rose 4.0 per cent to $419,500 but in Melbourne they dipped by 0.6 of a percentage point to $840,000.

The result in Melbourne was due to a 0.8 of a percentage point fall in prices achieved at auction; this was despite a lift of 2.3 per cent in private sales.

Inner Melbourne suffered due to auction prices, where median prices fell by 4.9 per cent to $1,459,000 but it was middle Melbourne that was hardest hit, with a 5.4 per cent drop to $974,500.

Outer Melbourne had a good quarter with the median rising by 0.5 of a percentage point to $681,000.

Apartment prices in regional Victoria grew by 3.7 per cent to $304,500 while the metro media was up by 0.5 of a percentage point to $604,000.

REIV President Richard Simpson said that despite fewer sales, many sectors of the market were performing well.

“2017 was a bumper year and while the trendline has flattened, despite the fall in median house prices in the June quarter, median prices are still up this calendar year for both houses and units, in Melbourne and in the regions,” Mr Simpson said. 

In particular there was been strong growth in regional centres which is probably due to the first-home buyers’ concessions said Mr Simpsons.

“The first-home buyers’ concession has been a boon for regional areas. A new entrant to the property market buying a house at the regional median will pay no stamp duty, while a first home buyer of an apartment in Melbourne at the median price would pay stamp duty of nearly $25,000,” he said.

Mr Simpson said that more prospective buyers are looking towards regional Victoria which is also having an effect in Melbourne.

“Melbourne’s outer perimeter continues to grow. Small increases in the June quarter mean that the median prices for both houses and units have risen over 10.5 per cent from a year ago.

Mr Simpson said moving forward that vendors need more realistic expectations as the highs of 2017 are now over.

“Negative chatter about the future of the sector coupled with stronger lending controls by financial institutions has created some uncertainty and vendors need to be realistic with their price expectations,” Mr Simpson said.

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Regional Victoria showing up Melbourne in price performance, new data finds

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