Friday, 13 May 2016

Sell out now or Wait

The ability to raise funds is a important skill of the property investor. If you can at any one time raise hundred or thousands or get a bank to back you with one call, you are probably there. It allows you to swoop in for the best deal and be on top in every negotiation situation.

Maths Questions time readers.

I have the HDB, which is a potential cash cow, having purchase it for just over $300k 6 years back and still owe $80k nett. I could finish paying in 2-3 years if I go all out and pay with cash, which I don't wish to. As far as I'm concern, I would like use CPF to take care of the house mortgage.

I would want to sell the property to raise funds and leverage on another 2  private properties. Which I think even with ABSD and TDSR policy in place, I could still do so. In 3 years, I could refinance and take out further dough. I do feel HDB's policy is a bit limiting. If I could reverse time, I could go back in time and go private straight away.

I'm keeping the hdb for pure safety buffer. It had superior cashflow, low cost, low maintenance and at 30+years of age... ZERO growth left. I wonder... if it would be be better off cut the hdb and go for private today.

The risk is present in the private market, loads of over supply and condos fetching less than 2% yield for some. I do not want to be caught out in a low cashflow situation.

Between cashflow and capital growth, which would you choose?

I want to go back to basic again. I raise my game through cashflow and not on capital gains. I know if the game plan is adhered to, I would be retired comfortably in 6 years. My target.

ie, 1 fully paid HDB, - rented out for further cashflow, a few properties overseas which would be reaping some equity growth, able to retire with 3-4k nett rental per month

On the other hand, if the private sector path is successful, I would also be achieving the same rental per month and would have an asset under care that would grow in equity and value.

I do need to be more educated and bold to go forward and take the plunge. Check this blog out in 6 months. cheers!

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