OPINIONS PLEASE – CUSTODIAN WEALTH BUILDERS …NEW OR OLD???

Yep. give it a miss. Buy 2 just outside the gate instead.

 Low 200's with $300pw rent. Some a bit cheaper if you want to get your hands dirty.

After reveiwing my previous comments today, I feel that my comments were wrongly focussed on Fitzgerald and this was not initial intention.

However my comments are directed to anyone about to purchase an investment property from a builder/developer that markets and sells their own property using the wealth creation industry as a sales platform.

I must acknowledge that Fitzgerald does offer a solid and informative education platform on how to build a property investment portfolio from scratch. He defineately is not a spruiker and has the real estate industry runs on the board. Over the years he has 'walked the talk in real estate investing'.

My problem is that any builder/developer cannot give 100% unbiassed advice about their own house/land packages that  they are selling and as a purchaser you must take all due care before investing with them

Many of these marketing companies (builder/developers ) when selling their new investment properties can be over priced and proper due dilligence is a must.  From past experience, Fitzgeralds house / land packages selling prices usually  meet bank valuation. Thats good. Your getting value for money

I must restate that Fitzgeralds company offers a very good educational platform for the beginners, offering best selling book/s, CD's ect…..

Whats vital with buying builders/developers real estate investments, is that you must undertake thorough due dilligence.
You must establish if the asett class they are selling has a market demand in the local neighbourhood (house or townhouse)
You must be able to compare your proposed  investment property price with at least 2-4 other property sales in the last 3 mths
Your property price should be (+ or -10%) of the asset class mediam price for the loacal area
The area your contemplating investing in should be have less than 25% rental property ect………. 

You get the idea, the builder (marketing companies) ar trying to sell house land packages and your trying to purchase a great buy.  Be Careful and do your home work

A good idea, try reading one of fitzgereads books, its not a bad way to start leaning how to invest into real estate.
Good Investing

There are merits in buying old and new.  Depending on your purpose to invest. 

For me, buying in a well established area (close to sea, river or CBD ie in Perth) with infrastucture ready and historical capital growth with the option to 'add value' is my first choice.

Perhaps when I am earning millions, I will then prefer a newly built him with depreciation benefits.

I have been an insider in the industry and I suggest anybody that has bought through John Fitzgerald or Custodian contact the builder that built the property for them and ask whether John Fitzgerald or Custodian or any associated companies were paid an undisclosed and therefore illegal secret commission of $45,000 or a similar amount and then get the lawyers involved against the Builder – Custodian and Fitzgerald as well as the Financier. This is on top of the 3% he charges the BUYER to manage the building for them – about $15,000. He does it this way so that the Builder does not have to disclose under QLD PAMDA legislation. So my suggestion is that Fitzgerald and Custodian earned $60,000 from this sale, please demand this information from the builder and see if I am correct.

I then suggest if my assertion is correct as I believe it is and they contact ACA and Today Tonight as well as Neil Jenman so that others are not put in this position.

'Ram' made a valid observation in that Custodian WealthBuilders (JLF) does provide OK training and advice in relation to developing a property portfolio.  Then again, so does the Investors Club.  As for cash investments in property syndicates and purchasing of JLF housing stock, RUN LIKE HELL!  I am one of hundreds of 'shareholders' who would love to see the principals (especially JF) of certain development projects taken to court, then run out of town on a rail.  Unfortunately, corporation law and state legislation allows such entities to practise their particular brand of legal ripoffs while eliminating any form of accountability through disassociated company entities..

I like xdrew's take on this.

At Stepping Stone we look at old verse new all the time. I have got to say; there are a lot of property investors out there running around just making bad wages doing Reno's.

I know I was one of them all the way through the 1990's and early 2000's. With a dozen Tradies working on 3-4 houses at a time. Don't get me wrong, you can make a small killing doing a Reno and turn around and loose that small killing on the next one.

In late 2007 right at the start of GFC, I lost $690,000 on one Reno project, just because I got the market timing wrong. That was after doing Reno's full time for 10 years. 

Buyers of old property can get caught fooling themselves into thinking that because an old suburb has done well in the past, it will do well in the future. New stock offers some of the best growth and yield potential there is going. Add to that the tax advantages and you can be a mile ahead for 10% of the stress.

The down side of Reno's are:

1. You don't know what you don't know. There are always surprises and most of them cost money to fix.
2. You loose income while the property is off the market. That's money you can never get back.
3. You have to fund the Reno work with cash most of the time. So that's money not earning while it is waiting to be spent.
4. While you are doing the Reno work you are not making an income that the bank thinks is worth lending against.
5. While you are shopping for all those bits and bobs you are not being an investor. Think "Home Handyman/woman"
6. Investors who Reno tend to trade their properties more often. The costs of buying and selling over and over again rips a heap of profit out of your portfolio and has a huge negative effect over the life of the investor. 
7. Most Reno's only make real profits in a raising market, so the actual Reno is subsidised by the market.

Our experience with Custodian Wealth Builders has been a nightmare. After initially running our finance numbers through InvestLoan and being assured we were covered to purchase the property, we were advised at the last minute that we were short $18,000 and had to come up with it for settlement to proceed…our first stress but we scrambled and came up with a solution. We had to constantly chase Custodian for updates on our build and never quite knew who we were going to hear from. Once the keys were handed over and we secured our tenants, then the houses issues started to appear. Our tenants kept reporting problems with blocked toilets in the ensuite and moisture through the walls, skirting and carpets in the WIR and master bedroom. We are good landlords so tended to each and every complaint promptly but the issues remained. Eventually we decided this was beyond landlord maintenance and asked Custodian for advice and they said it was our Property Managers job to deal with these issues….something they had been doing. We had our property manager contact the builder and we embarked on a 5 month battle to have these issues rectified. We thought they had been fixed because the issues seemed to subside for a period of time, until we had new tenants move in, a family of 5 so the house overall was being used more heavily. 3 weeks after our new tenants arrived, they reported not only blocked toilets but reported puddles of water in the master bedroom from the ensuite. Our property manager sent out a plumber to investigate and he indicated very early on that the problem could be quite significant. Following our original dealings with the builder, we contacted Custodian directly to enlist their help in dealing with the builder they had contracted. We were advised by Custodian that the builder was no longer trading so we wouldn’t be able to call on them to fix this problem. At this point in time our plumber had identified the issue and it was big, the waste wasn’t connected to the mains and this was causing the water to back up and flood. This defect also accounts for all of the other repairs we had incurred at our property over the years. We would have contacted the builder to fix this defect for us but once Custodian told us that the builder was no longer trading we went with the plumber who had identified the problem and had the issue fixed for our tenants as promptly as possible. Custodian said we could make a claim for the cost of these repairs, which would have been great until WE stumbled upon the builder and found out that they were actually still trading….Custodian had given us the wrong information and we were stuck with a plumbing bill for $6600 which was due for immediate payment….had we been given the correct information, the builder would have fixed the issue for us and that plumbing bill would have never existed. All of this occurred just before Christmas and we, a single income family with two young children, were left in tears trying to work out how we were going to pay the plumber and still give our two little boys a Christmas to remember. We approached Custodian, explained the stress and pressure we were feeling and asked for financial assistance based on our unique situation. Custodian did not offer to help us cover this substantial cost and pointed us in the direction of the builder. We approached the builder directly and they immediately dismissed us and said that despite the defect being present, they were not financially responsible because they hadn’t been given the opportunity to fix the problem themselves because Custodian had told us they were no longer in business. Whilst this was happening, our plumber was then chasing us for payment and so with nowhere else to turn, we were forced to make a claim through OUR insurance company to take the pressure of us so we could pay the plumber. Let’s not forget that this invoice would have never existed had Custodian given us the correct information. We went back to Custodian and they said we would have to take the builder to VCAT and make a claim through the tribunal. The one thing Custodian did was prepare the claim for us, even though we told them that the builder would defend the case by stating they weren’t given the opportunity to fix the problem. We went to VCAT and that’s exactly what the builder did and to be honest, that was fair enough. At least the builder was sympathetic to our situation and could see the mental, emotional and financial impact this situation had had on us and agreed to a small settlement to help ease our financial situation. Custodian knew that VCAT was not the answer for us but they told us to put the claim in anyway. Custodian didn’t even send a representative along to our hearing for support. In fact, once Custodian had prepared and lodged the VCAT claim for us, we didn’t hear from them at all! Following the hearing we were fuming, we had incurred costs as a direct result of Custodian misinforming us and they didn’t appear to care in the slightest. A couple of months later we still hadn’t heard from Custodian, not even to check in and ask how our hearing went. We decided that we weren’t going to be treated this way and Custodian needed to be held financially accountable for their professional negligence. When we originally signed with Custodian we paid a substantial client fee of $12,900 to manage the build of our investment property to meet all building regulations…which it did not….and to become part of the Custodian family as clients. Time after time we have approached Custodian and asked for assistance but not once did they follow anything through to fruition. Following let down after let down, we prepared a letter that detailed our grievances, with any references to emails received from Custodian staff providing us with incorrect information that served as the catalyst for our decisions and actions. We strongly believe that Custodian had mismanaged our build and subsequent client relations and asked that they reimburse our management fee. We felt this would make up for not only the defective property they handed over us, the financial hardship it has created for us, their ill advice but also the hundreds of hours we have spent dealing with all of it. We sent them our letter and it took them 3 weeks to respond, after us again having to chase them for a reply. They hid behind an array of legal loopholes and basically put the blame back on us. They did not acknowledge their role in this horrible situation we have endured for 5+ years and said they would not be reimbursing us any amount of money. So that’s it, because they are big business and we are the little client, they just get to do whatever they want. They already have our money and they just do what they want. I don’t know how John Fitzgerald sleeps at night; I know I couldn’t knowing I have caused a young family so much distress. So this is our story and it could have happened to anyone. Do your research, ask lots of questions and make sure you can trust the person you are giving your hard earned money to.