Ed doesn't promote or recommend any funds. His business probably doesn't have an AFSL hence he is too smart for that. As we know Ed talks a lot, thats what he does and in his seminars/CDs he mentions a guy called  Andres from Landau Securities located in Vanuatu. He makes very clear that every person he mentions is a crook and that you have to do your own DD on them. Whether this kind of disclaimer is sufficient to absolve him of any promoter liabilities, I'm not sure but he also states that he doesn't receive any commissions from them but know they very well, been to their place…etc.. etc.. But who pays for entertainment/dinner…? Soft and hard dollar commissions, very difficult to draw a distinction.

We all know that theres been a massive growth in hedge funds in the last 10 years. I think what Landau does is the DD for you. A lot of these funds are wholesale so its the old caveat emptor and yes, they can potentially give you access to asset classes and geographic locations which you wouldn't think existed. The returns may be large but losses would be too. Publicly available information is almost impossible to come by so trying to do DD on these funds might be difficult. Apparently andres meets with the managers regularly and do the utmost DD on the funds. It is only by association that Ed gets drawn into this side. At the end of the day, he is a property man and thats his expertise.

Thanks for the response guys. A shame I missed the web cast but still I'm no clearer as to some specifics of the deal. I understand in principle how wraps, buy and holds, unit developments, flips, OTP…etc.. all work. Just wanted to hear some real life stories thats all.

Close to city yes but cheap no. My mate bought the 2×1 terrace he was living in with his partner off the landlord. Its a small single fronted narrow place with small courtyard, no garage much similar to the stuff in Paddington and Balmain which us Sydsiders are used to. Paid $420 or $440k I think but was only paying $290 p/wk in rent. Was a walk to the tram and pubs nearby and only short distance into town. But with the negative carry, you’d be maxed out after one of these.

Agents like to keep it simple so these strategies work in theory but takes a bit more effort to execute. One way to secure it is to pay over the offer price but in a flat to down market, you want to be sure that the “doubling in value every 7-10 year IP theory” holds true for your offered IP. I’m afraid a lot of cra* on offer would struggle to get you the cap gains. If it does get there, you’d have burnt an equivalent hole in your pocket due to the -‘ve cash flow over the 10 years just carrying the IP. Another thing to note is that m’gees are reluctant to offer up the CT for a 2nd mortgage. Perhaps you can convince the vendor to take a caveat instead. Less security than a registered mortgage but a way to get around modern day practical issues which the text books don’t really talk about. Keep at it though, I’m sure there would be desperate enough vendors out there leading into X’mas.

Just to clarify Richard, as far as I am aware, you may still me MI’d even if you got a 70 or 80% no-doc/low doc loan IF you went through a securitised lender. So it seems this limit is still in the $1M / MI mark. Is there not another MI in the market?

Hence wouldn’t a prudent strategy be to go to the Big 4, Suncorp, St George, Bank West to get the 70%, 80% full doc then no-doc loans where theres no MI attached to these loans? Only when this “avenue” is exhausted do you start with the securitised lenders such as Resi, Macquarie, Rams, non-prime lenders..etc.. and you don’t care if you went 90-95% LVR as your credit file will show MI against those loans anyway. The extra 1% LMI is probably worth paying for the capital you save. By then you could accumulate $4M worth of debt so won’t care if you never buy anything else.

Heres how I think, your wealth is determined by the amount of debt you hold and not the total net assets. If your IPs are quality investments in the first place, the ability to control these assets will ultimately make you rich. The market in NSW is really depressed. Not a good time to sell at all. Are you sure you can get high $400s for your townhouse in Baulko? I know you can buy houses for that kind of money. With your options trading, $20k is not much at all starting capital and as you know, can burn that very quickly. I dropped over $5k on the SPI futures on this rally last couple of months and was only trading one contract! To me its just play money to get the juices up but if I really had to make money from trading, I know I’ll lose even more. Remember, not many fund managers/traders beat benchmark consistently in the long term. Most traders in banks survive on flow and client business. Proprietary trading is a whole different ball game. Good luck mate.

Not sure where the cap gains are going to come from at this point of the cycle especially with another 25bps firmly on the cards. Unless I get an absolute screaming bargain, I’m hanging put and waiting to ride the next wave whenever that is. Can’t bear holding negative geared property for just the tax benefits.

We effectively have 3-4 more years to make a killing. Debt is still cheap, baby boomers are still spending, asset prices will continue to go up. But I’m with Harry Dent in his latest book – beware stagnant a decade of stagnant growth from 2010 to 2020. Scary stuff, not in the realms of impossibility. When and if that happens, you liquidate your negative cash flow assets and move to somewhere cheap like Thailand for 10 years. [aacool]

Show me what deal you got that will be better than the 20% mez returns I can throw my $ at.

Would banks do any favours for us poor struggling consumers?? Sorry dumb question. They have some of the smartest capitalist brains in the country & if they don’t they will pay for a consultant.

I don’t think this product will be a traditional loan in the ordinary sense. The funding cost will have to be built into the end pay-off which they can model based off historical growth data. There will/should also be a time limit on this. I think the superfund angle is whether this can be sold as an investment product.

Would you as a super fund take a punt and lend/invest your money into a portfolio of residential properties for a future capital pay-out? Or the bank could pay you a coupon and keep some of the increase. Theres quite a few possibilities actually. But believe me, there are no favours here. Financial institutions are pretty good with coming up with new products and ideas but its all the same – shifting risk from counterparty to another and creaming off the top, middle and sometimes even bottom layers nicely.