Achieve eSignature Legitimacy for Financial Services in Australia

How to eSign a document: eSignature legitimacy for Financial Services in Australia

did you know that you can access taxfree money by holding an investment property in this video I want to share with you exactly how this all works when you're taking out Equity from one property to either use for yourself or to go and invest and build a real estate portfolio if you're interested in what my thoughts are then definitely keep [Music] watching hey guys my name is Ravi and welcome back to personal finance with rabi shama if you're new here smash that subscribe button because I talk about real estate cryptocurrency and financial free Now using Equity we've always heard about this right there's people online saying oh there's no deposit you require no deposit to purchase your next investment property this is how you do it or hey there's a way that you can use this equity which would be tax-free money to do whatever you like with it well I'm going to break it down in simple steps as to how it works when you want to use it and how you can use it to build an Investment Portfolio so sit back choose your beverage of choice and let's continue now the first thing we need to understand is what is equity and how it's calculated Equity is just the difference between the home value minus your liability which is the loan it's very similar to calculating your net worth when you look at your top number it's basically what your assets are all worth minus whatever your liabilities are and that is the portion that is your net worth it's the exact same thing when it comes to an investment property the only difference I would say is that in order for you to find exactly what the market value is it'll be very different to what an agent will tell you over the phone versus what a bank can give you now believe it or not every bank is different in how they assess one individual property's value so I've heard in situations where you could go to One bank and they may give you a valuation on your property of 600k but I could go to a different bank on the same day and get a valuation of $680,000 this is where the importance of having a mortgage broker really comes into effect because imagine you go to your local bank branch and you say okay well I bank with you guys and uh this is how much my property is worth cool that's all I have as an option thank you very much versus when you go to a broker they can go and apply for multiple banks with multiple valuations and so what happens is you get three or four different choices and you can then assess what is the next best move for yourself so if you're interested in getting help with a mortgage broker definitely email me I'll leave my email in the description box below now that we know what Equity is it's more about how do we access it and when can we access it so let's use an example and then from there we can Branch out let's assume you buy a property for $500,000 you decide to put a 10% deposit down which would be $50,000 and that means your loan amount is $450,000 in most cases banks will allow you to borrow up to 90% of the entire value so in this case 90% of $500,000 is $450,000 and that would mean you could borrow no more after that and in this case your loan to value ratio is 90% now although at this point $50,000 being cash has been put into it it is technically Equity but you can't touch it so usable Equity is different it's essentially figuring out what 90% of the equity is that is most likely what your usable Equity actually is what you can access let's break it down with this example so let's assume that 500k property has now done really well and gone up by 10% you bought in the right location at the right time the property is now worth $550,000 your debt however Remains the Same because you may have decided to go interest only so so now the property value is 550,000 the debt that you have is $450,000 and that means your Equity is $100,000 but not all of it is usable if you to divide this number what you'll find is that 450,000 / 550 equals 81% that means your loan to value ratio has gone from 90% to 81% now as I mentioned before you can access up to 90% at most banks so you could go and say to the bank hi I would like to borrow some equity and if you have the borrowing capacity you'll be able to go and borrow that extra bit there so the best way to figure this out is with a formula now yes I didn't enjoy math formulas back when it was Pythagoras Theorem and pi and this and sin and C I'm not sure what I'm talking about right now but I didn't enjoy that but I definitely enjoy this and I have a feeling you will too so what you want to do is you want to get the value multiply that by 90% minus the loan value okay so if that didn't make sense rewind and go back to it in this example the value is 550,000 multiply that by 90% equal 495,000 and now you would minus your existing loan which is $450,000 that means you have $45,000 usable Equity that means you can go in depending your borrowing capacity you can access that money and then use it as a deposit for your next property or you can go and use it for a renovation now what's crazy is it's actually taxfree right now yes I know some people will jump in the comments and say oh but still have to pay interest on that and whatnot but it depends what you're doing with that money if you take out $45,000 and you decide to blow it in Europe well okay that's a pretty silly decision but if that $45,000 that I'm paying maybe 6 and2 7% on I can use that and use it as a deposit to purchase my next property my next property is going to grow by a lot more than me having to pay 7% on such a low principle so you need to strategize how this actually makes sense for you and you can't just say I've got Equity I'm going to use it and I'm going to use it for dumb you use it for dumb you get dumb results okay now although 45,000 doesn't sound like life-changing money it really does when you have an Investment Portfolio so imagine going out there and saying okay I've got enough of a deposit to purchase two properties and now you've got a million dollar worth of real estate how long do you think it would take for you to now save up to buy another million do worth of real estate well if that existing million doll worth of real estate is experiencing comp compounding growth you might find your way to purchasing more investment properties and now you suddenly have a portfolio worth maybe $2 million I've got a video that is a stepbystep guide on how you can actually retire Filthy Rich with just two properties definitely go check it out I use a whiteboard in that video where you can go through save it even take screenshots if you like just so you've got that plan but if you have an Investment Portfolio of $2 million and it goes up by 10% that's $200,000 of compounding growth and the year after that it'll grow even more than that if you have 10% worth of growth or more now what's crazy is when you put it into context that if I could only borrow 90% of that amount and it works out to be accessing usable Equity of $180,000 do you know how long it would take for you to save $180,000 that would be the equivalent of probably making an income of like $350 to $400,000 every year this is why the rich get richer because of the system and the rules of the game I didn't make up the rules the rules were here long before I was born and in fact the rules have actually gone in the favor of stopping the rich from getting richer with APPA coming in and implementing all these changes if those changes weren't around affordability would be a bigger concern now than ever before I know it's super difficult to get ahead but this is one of those strategies that the rich people are using and they're using effectively if you can get your head around knowing how an Investment Portfolio is actually very beneficial to you to Growing wealth then you will go and outperform 90 99% of investors out there if you need help in finding the right properties and knowing how to execute this then definitely go and check out the website I'm going to leave a link in the description below for search property our buys agency we've helped more than 400 clients go and purchase their investment properties whether it's their first property or whether it's their seventh we're so excited to bring you so much value but also at speed and that is the key speed is the key in this market right now so if you're interested in getting help please do reach out if you're interested in more videos like this subscribe if you haven't already like the video and I'll catch you guys in the next one thanks guys