[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

May 2, 2011 - 6:45 am

Hello,

Go to http://www.portofinoapartments.com.au.

This is her business.  Imagine where she came from… penniless… cleaning lady… but gutsy. 

Carol looks like an average girl in that she doesn't dress to impress.  No frills.  No blings.  No trappings.  She's just a nice genuine lady.

Thank God for people like her.  So all of you,,,, may you be inspired to go for bigger and better things.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

May 1, 2011 - 9:44 pm

Hi willister,

I'm not sure if you have found a tenant but have you ever thought of giving a rent free period to help the business operator a leg up?

If you could find a tenant, get them to pay all out-goings, so at least you don't have to pay the rates, etc.

I have never owned a commercial property so I really wouldn't know if this is do-able.

Just an idea.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

May 1, 2011 - 7:30 pm

Hi,

Is it even possible to extend the 30 day contract?  My understanding is that properties bought at auction has very stringent rules, reason I don't buy at auction.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

May 1, 2011 - 7:22 pm

Hi Larry,

I agree with Richard and Anthony.  I self-managed all IPs, including those inter-state.  Sorry, that's a lie, except for the duplex in Millicent.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

May 1, 2011 - 7:19 pm

OMG!

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 30, 2011 - 7:39 pm

Hi all,

It is cheaper to buy properties there now that the Australian dollar is so strong.  But the declining US$ also means that the NET rental return is also shrinking. Time will come when what you expect to be AU$700 in the bank, would be AU$600 instead.  An exaggeration but you know what I mean.  So as I can see, there are two risks involved here: a shrinking passive return and an underlying asset that may take years to grow in value. (Although I do know that capital gains really depends on what you buy and where.)

Then, I assume that there is forex charges to be considered — when income is banked in your US$ account, and you need to withdraw the money from Oz.   All these little charges impacts on net return.

Secondly, about printing money, the US is not the only one doing this.  North Korea is printing the green buck by the millions.  Not to mention Columbia and Mexico and Iraq and Afghanistan and on and on it goes.  There are lots of fake currencies floating around, which I'm pretty sure impacts on the state of the economy.

All investment vehicles carry risks – even cash (just think of the thousands of people who lost their cash when banks collapse or when you're just plain robbed).  At the moment, it's still a pass for me.

I believe the returns that are bandied about re US return can be achieved in Australia.  It's a matter of creative thinking.

Thanks guys.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 30, 2011 - 9:20 am

Hi Robbiep,

I don't see why she'd need a license.  She's not property managing.  She's the leasee.  She signed to lease the units and pays the weekly lease as per the agreement between leasee and leasors.

If during the Christmas and Easter stretch she makes $2,000 a week profit good on her.  But bear in mind that then it is vacant, she is out of pocket.  Her business is providing service, which just happens to involve accommodation. 

I'm not naive to think that she's consistently making huge profit.  I'm sure than just like any business, there are weeks when the margin is slim as it is subject to short-term visitor fluctuations.  But overall, on average, she makes a healthy income.  

I used to do this on a small scale when I was looking after international students.  I leased 3 units near Macquarie Uni, furnished it and leased them out.  My profit margin though was small, average $250 per week.  On aggregate, it was $750 pw but it's more consistent as students stay for the whole two to three years to complete their courses.  I didn't make the money she's making.  Corporate high-fliers has more financial means and they stay in top-class accommodations.  I take my hat off to her initiative.

Again as I said, in all honesty I don't see why she'd need a license.  Other people may have a different opinion about it.  At the end of the day, the only opinion that counts are those of the people she has helped. They aren't complaining.

I like her because she doesn't take advantage of people who are suffering financial hardship.

It is a blessing.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 30, 2011 - 9:04 am

At any any rate, you looked 16.

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 30, 2011 - 7:21 am

Robbiep,

It's not commission.  She gives full disclosure to the owner.  She tells them what she will be doing.  In effect, she's subleasing the flats to corporate tenants as a serviced apartment.

The fact is had I met her three years ago, when I was negatively geared on my Hunters Hill unit, I would still own it today.  Had someone said to me back then, "I will make sure you are neutrally geared, and it won't cost you a cent to hold on to this asset,"  I'd have given them the keys.  Instead, I sold my unit.  Although I didn't lose money on it, it would still have been better had I been able to keep it.

She's brilliant at what she does.  Obviously she can't help everyone.  Her investment mission is not to save everyone out there, Jesus our Lord and Saviour has already done that..

She can't help those who bought over-priced, bought the wrong unit in the wrong location, etc.  She can only help those whose asset will still allow her to make money after all costs are deducted.  Let's face it, some units will not rent for $1,800 to $2,000 pw even if you throw in a chambermaid and a chaffeur in the deal.  Chambermaid as in cleaning the unit, just in case there's a misunderstanding.

Angel.

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 30, 2011 - 7:10 am

Guys,

This gorgeous girl is only 21, she's been working part-time and saved this money over two years.  It makes me very determined to stand guard over youngies… when I can. 

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 30, 2011 - 4:29 am

Amen!

But she can charge more only because she is able to provide value-added services.  She transforms a fully furnished City unit into a serviced apartments.  She provide cleaning, laundry, whatever Mr or Ms High-flier needs.

Value-adding is always a great way to increase income.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 30, 2011 - 3:18 am

Hi,

I am going to invite her.  This is just the tip of the iceberg.  I'm sure as we journey along, we find more superstars.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 30, 2011 - 3:14 am

Hi thecrest,

You are an example too.  There are truly many ways to skin a cat.  We are all only limited by our vision. 

Someone who sees a gold nugget and thinks it is a gold nugget is a miner or a fossicker.  An investor is someone who sees a gold nugget and thinks of it as a ring or a necklace, even a tiara.

I am never put off by advertised returns, if it says 5%, I will go find out why and check if I can make it 9%.  Why not?  Can I not create my own cash flow?  If it says a "dump" can I polish it and make it beautiful?  After all, a person's nose can be altered, why not a room? 

More than anything, I see this forum more as a source of ideas and inspiration.  Sometimes it is good to follow a well trodden path; but sometimes, we have to make our own way. 

I've been inspired by many people, I look at what is unique in what they do.  People are amazing.  I'm amazed at what you have done.  In my mind, that takes a lot of courage.  Well done.

Angel

PS  I have no answer ti your question.

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 30, 2011 - 2:54 am

Hi all,

I've just met her in person and found out that the original post is far from the actual feasibility study.  Not even close.

Firstly, the feasibility study was part of a "homework" from a seminar giver.  Second, the premise of the exercise was that "she does not the money" so she zeroed in on this one and assumed nothing will come out of her pocket at all.

The exercise actually said, the property was valued at $980K.  The owner wants $480K now, so she actually needs to borrow the money from the bank.  And then the vendor will vendor finance the remaining $500K at a 2% establishment fee plus 11% interest.  It was not clear whether the 11% interest was payable on arrears or on-going.  My personal take on this is it had to be monthly interest as the vendor has now lost his home and has had to rent.  No one in their right mind will pay rent out of their pocket.

What she also didn't understand was how much she actually must borrow from the bank.  It was not $480K but closer to $700K to pay for the following:  according to the exercise book:  stamp duty ($40,400), architect fee ($18K), consultant's fee ($25K), capitalised interest in advance on $700K (depending on interest rate), marketing materials to pre-sale the three townhouses ($5,500), and various other fees.

So I asked her, where will you find the money to pay the bank loan of $700K and the vendor finance amount of $500K (mind you, 11%)?  She said she didn't realised that she must have servicing capability to pay on-going interest.  I supposed she can minimise on-going costs if she capitalises the 11% interest on the 2nd mortgage and paid this as a lump-sum.  But then the bank loan will also balloon.

Richard, I can imagine you scratching your head.

When I went through the other aspects of the process with her, eventually she realised it really doesn't hold water.

The end product was supposed to be 6 townhouses.  Of which, the original vendor wants one for him and the original loan of $500K; the builder 2 plus $240K.  For the purpose of the exercise, she will sell two and she has to pay 2.2% agent's fee.

Not only that but how to find this fictitious vendor.  For this scenario to even materialise, she has to hit the jackpot on the following:

1.  She needs to find a vendor with an unencumbered who is willing to do this deal (not bad).
2.  The land has to be with the right zoning and size to allow 6 townhouses.

In other words, she could be waiting forever as supply of land with the right zoning comes in few and far between and anyone willing to do this deal will likely do it with a developer who has track record.

She is a lovely girl, full of life and ambition and I have no doubt that she will go far with the right advice.

I hope it now makes sense.

Angelina

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 30, 2011 - 2:24 am

Hi Patrick,

The original post was by Nathan, I'm not sure what scenario he had in mind.  Regardless, it's not the point.  You can buy it as an owner occupier first and then convert it to IP (like so many here).  Or start out as IP.

The rule on taxation and loan structure is a long and convoluted issue to discuss in one post but it has been discussed here before.  Read through some of the old threads, it would have a headline that goes like it, converting owner occupier to IP, something or other.

The thread will clarify it.

I hope this helps.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 29, 2011 - 10:08 pm

Darling,

t sold twice but deals fell through twice for different reasons.  I'm using it now to help someone a leg up.  Read thread entitled, "One of the most amazing people I have ever met."

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 29, 2011 - 9:41 pm

Hi Patrick,

Darling, when I bought my first IP I was a stay-at-mum and ex husband was a welfare worker (not the highest paid bloke in town).  By then, we had two kids under  3.

I simply followed my own formula, SWIM.  Save, work, Invest, Manage.

We lived within our means, saved every penny, read every books from the library, cooked every meals, went and bought happy meal once a fortnight for the bubs. When we had 10% save, bought an IP a million miles away. 

When I told friends that we were buying a house in Richmond, they all laughed their heads off.  I mean, it was the end of the rail line, you couldn't get any further if you tried.

It was also a defense housing because I was so scared to death of being without a tenant, we chose to buy one that carried no risks.

When they laughed, I said, "we can't afford to buy where we live, it doesn't mean, we shouldn't buy.  Even if we were the most unlucky investors ever, and only got $5,000 profit at the end of it, that's still $5,000 no one will ever give us for free."  Hear the logic.

By the grace of God, the following year, we bought a house in Toukley for my mother-in-law to rent.  Once again, it was a risk-free investment because we got ourselves a marvellous tenant.

The following year, we bought a 2-bed unit in Auburn, six months later a reiver-front 2-bed unit in Parramatta.  We bought an IP every year just be being on budget, prudent, buying what we can afford and were positively geared. 

When we divorce, we sold the two units, I got Richmond, he got Toukley.  We still have them both.

It's not about lack of money.  It's about having vision.  It's about taking the bull by the horn and gritting your teeth.  It's learning about fundamentals and most of all, having faith in yourself.

A million dollar lotto win can disappear just as quickly if you don't know what to do with it.  But someone with $5,000 in his pocket can double that in six months (even two or three) if he knows what to do.

How did I manage to be so patient?  I used every free time, generally when babies were asleep, calling banks and asking what we NEED to get a loan.  Reading every property magazines I can lay my hands on. Time can be your enemy, but it can also be a friend.  Befriend time.  It is golden.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 29, 2011 - 12:35 pm

Amen to that Scott.

Something doesn't add up… seemingly.  The premise appears too good to be true.  However, I don't discount the fact that some people do get lucky.  At my age, I do believe in luck (with hard work, of course).

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 29, 2011 - 8:50 am

Hi Tony,

No refunds.  Unfortunately.  But call the OSR and they will confirm.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 29, 2011 - 8:47 am

Hi Michael,

Thank you for being honest and up-front.  You ARE good at reading people, I am, truly,  not into land banking.  Only going for positively geared properties now. 

Good luck and I hope you find the right buyer.

Angel