Forum Replies Created
hi michael. i agree with you totally – i too learnt alot from his book and must admit its very motivating.
ther reason im having a go is that some on the forum have been comparing Spanns methods to Steves methods, and sofar the debate has been very one sided. surprisingly so…
cheers
crashy – its time to get fired up. tell them that the owners are not meeting there basic obligations under the contract. ie that the hpouse is safe!!! tell them that the water problem amounts to a breach of contract and that you wont be paying any rent until its fixed….also tell them you have independant advise that you can do this. even if you dont sometimes a threat should be enought to convince them to fix the problem.
yack – what does it say about the valuations industry that ‘I’ have to make there job easier for them. i thought they were the experts!!!!!!!
lets be honest that making things EASIER for the valuers is another wayt of saying ‘get the best valuation possible’. Also let the valuer know who butters his bread….so if you have enough power, and the valuers next holiday is riding on it…you have a licence to print money or equity which is the same thing….
dubious indeed. henry kayes empire was built on this…
im not having a go at the baisc strategy of buying cheap, adding value, making a margin and doing something with the margin. its the shortcuts that worry me….its the shortcuts he advocates, with his wealthy friend to prove the point, and the agent lady whos s…t doesnt stink, that causes concern.
no stories like that in steves book. plus all steves characters are so real they wrote half the book themselves. no stories ending with ‘betty and barry – wollongong’.
ive been ringing every betty and barry from wollongong to try and get varification of there stories without any luck sofar. ill let you know how i go.
michael – you had me until the last 3 lines. ENRON is a good lesson..
imagine if we as investors thought we could never lose…..ie the market always rises, so leverage away……
i am a trader by vocation. i take multi million dollar poisitons on a daily basis. i never underestimate debt and never underestimate the market. in a bull market if i have counterparty i check there financials becuase i want them to be able to pay when the market inevitable comes off…
the inability to not service loans and have to sell at a huge discount is a very real and possible sceneario…
you can protect yourself and your interest using trusts and the like but the bottom line is that the market is false….
doesnt mean dont invest – i just think you need to be careful relying to much on equity, too much on debt rather than cashflow and something thats real and liquid.
cash is king in downturns – remember that chestnut. while your holding on for the market to upswing – all those with cash and nice income are buying on the cheap – being proactive…
hi jo – yeh that wld be too much. i reckon 30 pct from the highs…
i think we need to define house of cards!!!
if you think there is nothing wrong with a system whereby millions of dollars of assets can be purchased based on a subjective and manipluated notion of ‘valuation’ then i suggest you think again
the idea that you can by 10 properties on the back of your first property getting a generous valuation
– without anymoney down is very dangerous..this i think is the essense of a bubble. for smart people this doesnt make sense. i know people do it – but it doesnt makes sense nor should it make sense…
remmeber the dot.com bubble. that didnt make sense either – ask warren buffet…
i think if the market does drop another 15-30 pct then you are alot better off having cashflow type asstes rather than capital gains ones
if you arent worried you should be! i think alot of people here are trying to convince themselves that there own POSITIONS are the correct postions..
good luck
g’day aperry – you hit the nail on the head. spanns strategy is he ‘uses residentiual property largely to get access to money at low rates and then he leapfrogs……..’
my point is that this technically is not property investing. its more about how to source cheap money. the book should be called ‘sourcing cheap money by manipulating valuations in order to grow your wealth’.
sounds like smoke and mirrors..
g’day – surf thre site – use the search function and you will find this topic is covered very well.
bottom line is that the game has changed but the overall philosophy of using positive type cashlflow investmetns – is still a valid one.
in order to find these deals in property w/in aiustralia you need to find a problem – solve the problem and hopefull produce a nice little income…….
read his second book – that will help..
ps – i was gonna say something funny about your topic heading (something about yr type being a rare breed) but i have matured recently so i will leave that to someone else…
cheers
i noticed in sopme of the calculations he doesnt use ‘Purchase price’ but rather ‘loan amount’. some of the calc dont mention purchase price at all. i dont have the book in front of me so i cant tell you wch pages..
the other things i noticed about the book
– the essense of the book could have been written in one chapter….
– his wealthy friend isnt a very original idea – i wonder if rich dad is suing??
– most of the stories talk about strategies and clever little tit bits but when you look at the calcs the overidding reason a deal becomes a winner is due to capital growth. ie we bought a place for 200k with 4 month settlement. when we cam to settle the house was laready worth 240k…….and then blah blah blah….also the success of alot of the deals mentioned depending almost soley on one of spanns convenient ‘Valuations’. hardly any were based on actual sales.
so from the man himself we know that his valuations are on the high side of reality………so we need to be careful…
all up the book was a good read but it lacks the overall rigour, integrity of Steve McKnights books…..regardless of where you sit in the cashlow vs capital gains debate…
you might find they are wrth 15k and with the overinflated 25 pct that is how they gtee rents for 3 years.
be careful!!
beth – ‘is there a faster way to make money sooner?. nice double entendre…
have a search of the develpment part of the website and you will see posts relating to costs asscoiated with developing
cheers
g’day
the answer to your question is – it depends!!
if i were you i would read as much as possible about property investing and the philosophy behind the different strategies. steves books are a fantastic start.
then you need to decide where you want to be in 2/5/10 and 20 years time (financially speaking)
the truth is you can do a number of things to get into the property market. which one strategy is the best will depend on your goal.
for example if you decide to buy a home to live in and take out a large mortgage this will affect your ability to make more and more investments. however if you rent ou will have excess cashflow to keep investing (hopefully).
most gurus suggest the best way to make money from investing is to only invest in assets that privide an income.
a home does not fit this description.
but then again you aim/goal maybe to find a nice home to live in asap – then that would eb fair enough also..
so in short – you need to decide where you are going and then how you are gonna get there…
cheers
if you dont ask you will never know.
im guessing you have factored the land into your 220k. you need to think about interest costs. ie if you borrow 200k to finance the deal and it takes over 12 mos to build then yr interest bill will be reasonable. aslo you will have
– cpaital gains tax on selling
– stamp duty on buying
– broker/legal costs
– interst cpsts (as above)
– also when building a house you need to factor in 10 pct leeway as bulding very rarely comes in on budget. try a dn get a builder that will give you a fixed quote – and also negotiate a completion time with penalties for delays. timing can be everything..hope this helps
i buy the crappiest stuff and pray it doesnt break down!!!
the entire family has comprehensive health insurance just incase
you can do whatever you like….
if you foresee a problem ie like hk in 1997 – then i suggest you dont offer….
rent is cheap …..
lifex – try not to shudder too much – its bad for you…
with regards to 18 months interest free at harvey norman. i think what you will find is that harvey normans prices are quite normal and you should be able to ask for a cash discount. if however you want interest free they will not discount from the reatil price because of the costs involved with hire purchase. they are not ‘overinflated’ to begin with….
if you watched ‘the apprentice’ you would know the answer!
if the bedrooms are too small buy a few wall mirrors and that should do the trick. (cielings if youre into that kind off thing!)
misty you are very close to being fired!!
michael – my grandmother once told me that if i vascilate too much i will go blind – so if that aint incentive im not sure what is….good luck..
michael – yes we have noticed. lol.
as an investor – dont forget that the best deals dont hang around. also there is room for being spontaneous. the more confident you get – the easy and quiker one gets atr spotting a deal.
i reckon you need to bite the bullet and buy something. then things will start to move forward and all the questions you have will worlk themselves out.
believe me – you have more knowledge than most seasoned investors so stop procrastinating. i reckon what might be holding you back is that you are scared of what the market is doing at the moment – and fair enough too. so my suggestion is to buy small – ie take a small step first…..then move onwards and upwards
cheers
i agree with marc – leave it as it is – and dont answer them if you dont want to…
