$1M In Properrty In One Year

What is this book referring to? Is it refering to $1M in loan amount or property value or what?

thanks,
Joseph

The title of the book gives context…

$1,000,000
in property
in one year

Regards,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Gives context but still doesnt clarify the original question from Joseph

well done to all the mappers and steve and dave.
loved the book, however having met the mappers at a masterclass seminar, it was not easy for any of the mappers, and i suspect dave and steve were probably pulling their hair out at some stage as well. it may have been nice to have gone into all the deals that the mappers didnt follow through and why.
just a thought.
again thanks for a great read, has caused me to put up a doing/done/completed list on my wall at work. [biggrin]
cheers
shaun

Lead, Follow or get out of the bloody way

Hi Geo,

From my memory, there were 21 people in all who started, so I would say that 8 couples and 5 singles is correct…

Del

I think way too much can be read into this Julian2. Basically all their IPs were positive cashflow, so in they were ahead.

In terms of nett worth (assett value minus debt) I think it’s a bogus figure. Mainly because it is very subjective, can change daily and in fact dosen’t tell you very much.

For example say you own a building that costs $1Mil (resi) and provides a profit of say $2K per week. The Gov. takes away all the benefits of neg. gearing and the property market crashes. Your $1Mil building falls to a value of $840K, and say you had a bank loan for $900K. Whats changed? Well the property has fallen $160K and my net worth is -$60K. But apart from that – Nothing. I’m still getting $2K per week, I haven’t been affected by the Gov. changes and I’m still paying the bank loans off, but my ‘net worth’ is now -$60K. BIG DEAL!!!! At worst the bank might call the loan (but if I’m still paying there is a 99% chance they won’t (unless it’s the NAB – beware!!!)).

Say the Gov. realises whats it’s done and decide to convert everything back to normal, but they realise that they must make it more attractive to investors (they have to entice them back) so they provide higher depreciation right offs.

Now my building might of jumped to $1.1Mil. Whats happened? Well my net worth has gone from -$60K to $200K, but I still make my $2K per week, and so in reality nothing has changed (I can’t borrow any more because the bank requires 80%LVR for any redraw).

If you have a large portfolio of stocks in almost becomes totally meaningless, because of the price changes everyday (many people were telling people about their ‘net worth’ during the dot.com boom, yet I wonder what their ‘net worth’ was after the dot.bomb?).

Thats why net worth is in my mind such a bogus figure.

Rgds.
Lucifer_au

Like I said I am very much looking forward to reading the book, (copy ordered) which I imagine is very inspiring. I understand the title is about controlling $1m worth of property – and presumably all properties in the book offer positive cash-flow, which is no bad thing.

And I take Lucifer_au’s point that nett worth can vary considerably without any change to the income stream due to extraneous factors such as changes to government legislation.

But I stand by my assertion that the two most important considerations must be nett worth – in case one wished to cash-up, or more likely to borrow against the equity – and the other cosideration is the cash-flow which provides the income stream.

If you have a positive cash flow of $100k and $1m of equity it doesn’t really matter, apart from the extra work, whether you control $2m of property or $5m – in fact it may be, in many cases, much better to contol $2m because your gearing is at 50% and therefore your risk exposure is lower.

I take the point, also, that valuing a property is subjective. Valuers will even admit that!!! But if Steve was to write another book in say five years time about those same mappers and the properties they originally bought, do you not think he might make some “subjective” judgements about how those properties had moved in value? We would expect his determination not to be perfect, but rather indicative. Otherwise, unless some properties had sold, the original purchase price would be the only figure we had to work with and it wouldn’t appear the mappers had made much progress apart from the cash-flow received.

Please, however, do not misinterpret my comments to imply any negativity towards the mappers – who have undoubtedly done fantastically well. Nor any slight towards Steve.

At the end of the day it’s not how many properties you own, nor the purchase price of the properties, but what the ones you do have are doing for you.

Julian.