Margaret Lomas / Destiny Solutions

I agree with Richard Cross collateralising can be ok for 1 or 2 properties however if you want to grow your portfolio at some stage you will need to bring in other lenders and this can be an expensive exercise if the have been crossed.  Keeping them as individual properties from the start is the better way.

They are great for low risk mum dad investors or starting investors who want to continue working.
I personally like a more aggressive invstment strategy and don't believe in working for a salary. They cannot help people like me

  it is not at all difficult to change lender or mortgage broker. i do it all the time.  destiny consultants all have investment propertys some more than others. if you want check  the facts for yourself  just ask them. don't just  asume as in "probably don't have"
there is no charge for mortgage broking as i said check the FACTS

I must admit I haven't read anything by Margaret Lomas, but I have heard her speak and I have had clients ask me my thoughts regarding her ideas on debt structuring. The impression I get is that she is very good at promoting herslf, but there is not a lot of substance to her, in terms of her knowledge of either property investing and especially not debt structuring. The idea of puting everything into one LOC is, for most people, plain dumb. It is more expensive than using regular loans, less flexible than using loans with an offset, and cross collaterisation is rarely appropriate.

Regards

Alistair

1) i haven't paid destiny any money not sure what i rest my case refers to

3)there is no secret 7.28% low doc loan negotiated with colonial as i said i haven't paid destiny a cent. the loan comes under the mav pack which we already have so there are no establishment fees or valuation fees  as i said it suits us at the moment for the reasons i said before.  and i'm not tied to one lender i can go elswhere anytime i like. our other propertys are with 3 other lenders. we'll see how this approach goes

not sure why you are so anti destiny when you obviously don't know much about them

Purely on the topic of LOC, can someone explain in detail their negative thoughts, rather than sweeping statements.
We have 3 properties on a LOC and when the time is right will revalue to increase the limit to make another purchase. As far as I am aware, as long as we stay within the 20 equity /  80 loan ratio, we can continue indefinately ( excluding serviceability ).
Regards
25 North

If you don't know anything about Destiny or Margaret, or haven't read her books, then please keep your opinions to yourself until you know some facts, kids.

Yes, she is a good self-promoter, but she backs it up, and won Business Woman of the Year last year. Not bad for a dud.
 Oh; did I mention she has written 5 books, and has franchises in virtually every State in the country, and has 5 kids, and…. someone stop me.

I have defended Margaret a few times on this site now. Her strategies are not gung-ho Gordon Gecko stuff. This makes her the sort of Finacial Planner that most mum and Dad investors need. If you follow Margaret's philosphy, you will never go broke. You may not get rich in 2 years, but to do that requires more risky manouvres than she recommends. Margaret's path is more the Noel Whittaker approach; slower and steadier, and he is very respected.

Having said that, we have done a more risky one, and Michael's (Sloan) knowledge and objective advice were invaluable. I take my deals to him, we evaluate them together, and I decide the next step. He plays devil's advocate when the need arises and we make good decisions because of our collective brains and discussions.

We have a L.O.C at 7.47% with St.G. (thru Destiny). No problem releasing any properties from the loan; just re-set the available equity if you sell and don't replace the property, or substitute the title with one property for another if you sell then buy. Mortgage stamp duty is also adjusted based on whether you are adding or decreasing, and loan amount is adjusted accordingly. Obviously servicability is a factor as well. We only buy "cfp after tax" properties (as per Margaret's philosphy), so no probs there.

Who cares about cross-collateralisation.

All our properties under this loan; with 2 sub-accounts. One is day-to-day, the other is investment only. Current LVR of 58%, no mortgage insurance and investment loan balance of just under $600k lots of useable equity, and haven't done a re-value in 3 years. I'm tipping it's another $250k more by now.

No neg balance on the day-to-day sub-account, but have $80k usable equity in that one for emergencies.

The "Property Track" software (if you are a client) allows you to split the investment loan sub-account by percentage between all the individual properties for tax time. It is fantastic. In fact, this year, with the latest upgrade, all you need to do is upload the profit/loss and financial statement reports straight to your accountant.

Been with Destiny for nearly 4 years; Fitzroy branch Melb. Michael Sloan and his staff – especially Lucy Ramunno (20 years in Banking) are THE BEST.

They just did a Lo Doc 60%  (we are classed as non-residents, and had to use our contractor's income from the USA) lend for our recent Land settlement in Aus with St.G at 7.37%, Interest only 5 years, then P&I after that. $14 per month Bank fees (pr*cks)Probably not the cheapest loan going around, but the job was done easily. The rest of the purchase was out of our usable equity. We transferred the funds needed from the investment loan equity over to the day-to-day account for the settlement as the Land is not an investment purchase – future PPoR. 

All the staff at their (Fitzroy) office have I.P's, they walk the walk, talk the talk, their focus group network is excellent, their service is excellent, nothing is too hard. The Destiny website, the newsletters and the links are excellent. Worth every cent they charge to join, but no obligation to do so if you don't want to.

25North; you are quite right in your post.

I think cross-coll is not for the over-leveraged, but then over-leveraging is a no-no anyway in my opinion.

There are a lot of successful role models (for want of a better expression) that have achieved phenomenal success with real estate, and in turn have encouraged many others to take the plunge – a far cry from the 'Free' bank type financial planner or even worse, the AMP plebe type that would never recommend real estate …of course it 'costs too much to get into, is 'too risky' and does not pay commissions…….yeah right) Now after that intro, I do believe it would be ignorant to post an 'opinion' on a real estate forum when you have not read any of the person in questions real estate books – the very last one of Margarets, the truth about positvely cashflow property is a really good read, and unlike many other books (Kiyosaki comes to mind) offers real strategies. Perhaps it may be worth looking at this prior to any opinions are formed.

I also believe there is more than one way to skin a cat, and so much of how we achieve any gains from real estate depends on our time, money, risk, and sometimes a bit of luck (ie – booms etc) thrown in. I guess the other 'Australian' thing is to sometimes feel threatened by anyone that has achieved a measure of success perhaps in a different (less or more successful- it's objective sometimes…) way to what they may have done themselves, advocate or promote.

I would look at the likes in Australia of people like Margaret Lomas, Chris Gray, Michael Yardney, Steve Mcknight and Hans Jakobi who all come to mind off the cuff as people that have achieved much with real estate (whether they agree with each other or 'like' each other or not)  and all have plenty to offer as far as learning from their various 'stategies'. Sure, they all differ to a degree, but all have worked for them respectively, so others can surely learn something from people like this. There are also plenty of forum members too (one who appears to own half of Queensland…. , also obviously through a lot of skill, hard work and risk taking as well!) that have their own methods that have worked, and preferences as far as finance structuring, property location, anf a myriad of other things go………..but how about lets all keep from slagging others who have achieved something worthwhile real estate, business or lifestyle wise, and don't mind sharing it with others, whether charged for or not.

No offence intended to anyone – but hopefully a bit of balance rather than a peeing contest or that horrible 'tall poppy' syndrome unique to our wonderful country at times …..

Hi Marc,

To start with, it is costing you money as LOC's are more expensive than standard loans. They also provide less flexability than a loan with an offset. With a loan balance of only $600K, it is not costing you a great deal of money, but it is still not optimum. My argument re Destiny is that they seem to have a blanket policy that crossed loans and LOC's are the way to go, the simple fact is that this is rarely the best structure.

I have a number of clients who have read her books and have had to discuss with them why I didn't think they should structure their loans as per her advice, I have also heard her speak a number of times and have been quite unimpressed. She seems to think buying properties without seeing them is a good thing, for example, I would not consider this good advice. Nor would I consider buying in some of the areas I have heard her spruik eg Elizabeth. I would not consider an investment in such an area low risk.