Forum Replies Created
Stinga59, let's get in touch. I'm all about setting people up for a better retirement, through ten year property deals, using cashflow positive property, and buying with your super! Send me an email, we should talk.
Who says Cashflow positive houses don't exist?
You just have to think outside the square. Dual Occupancy.
Ben.
I help people buy property with their super.
[email protected]
0401 054 793Newbie, I couldn't agree with you more. Before I had bought my first property, I came very close to getting snaked. It was a horrible feeling.
I went to one of those free seminars that advertised about learning how to create wealth. I was keen as to get started, so I went along.
When I got there I was surrounded by a crowd of about 30 people, and was given a highly polished pitch on a projector screen that told me all about how the average land price in brisbane was about to become $1.2m. They gave tid bits of good information, and then at the end, a large group of 'helpers' mingled with the crowd and took down names and numbers. I ended up with a lady who booked an appointment to come to my house to see me and my wife to talk about what we wanted to do. It was all free of charge. She was incredibly helpful, but I just couldn't shake the itch that was getting under my collar.
"Why is this woman being so helpful?"
See, I've been in the sales game for some time now. I used to be one of those morons that would call you up and try and sell you a gym membership. I was exceptionally good at it, but I HATED it. I always said that I would hate to be on the other side of the table while coming against me as a salesman, because I was so convincing that people just had no hope of escape. I was so 'well trained' in overcoming any objection, that it was near impossible for people to walk out the door without signing up. It just makes me cringe now. Why? Because I signed up to a gym down the road a few years later, and got to experience what it was like at the other end of the table. I heard every technique get repeated to me over and over again, and I could name every sentence that was used on me. "Tie down." "Objection handle." "Acknowledge, Empathise, Isolate, Overcome, Close." I wanted to strangle the salesperson. Not because of them, but because I could see myself in them after my sales training, and I hated it.
The same thing happened to me with this lady. I could hear her sales techniques coming through like clockwork.
So, perhaps having been in sales, it amplified my lack of trust for salespeople. She might have genuinely wanted to help me, but I just didn't trust her because it was all free of charge. She had an agenda. Her job was to make me feel comfortable, happy, trusting, and then when I was all nimble, pliable, and like putty in her paws, then she could pounce and sell me a property. She was a real estate agent disguised as a 'happy helper.' It instantly wrote off my ability to swallow her advice because I couldn't tell if it was her own advice, or if she was just pushing an agenda.
The clincher was when I told her what I was looking for, a dual occupancy home, and she came back and gave me only one option to look at… it was nothing like the idea I had in my head, and it wasn't even dual occupancy! She then spent half an hour trying to convince me why I should buy THIS property, and forget about my dual occupancy idea because that was 'too hard and bad for this and this and this reason.' The truth was, she didn't HAVE what I wanted, so she tried to sell me some other crap so she could get a commission for it. When she left, I took the cowards way out and told her over email that I was no longer interested in further discussions. I also never went to another wealth creation seminar again. In the meantime, I ended up going to friends that I trust that are builders, designed a dual occupancy home myself, and I'm moving in in two weeks with tenants paying off half my mortgage for me. So there, fat hag sales lady.
The point I'd like to make is this. There is no substitute for your own education. If you want to get involved in property, and get some good, unbiassed advice, buy books and read like mad! It's also good to pick the brains of people that you trust, that don't get a commission for their advice.
After reading Steves book, I got really excited about buying property, and in order to solve the problem of getting some good advice, I decided to join the other team. I paid a grand to take a real estate course to become a real estate agent. I then put my hand up and took some interviews at real estate places to get a job. I finally landed one at coldwell banker specialising in investment properties. The whole reason I did it is not because I want to sell property, but because I want to BUY it, and I figured that If I wanted to follow Steves model and buy cashflow positive properties from day one, I wasn't going to find any without having my finger firmly on the pulse. So here I am. One of those dodgy, commissioned-up, agenda pushing advice givers. My advice is, don't listen to my advice at all. I have a real estate license.
"The majority of Real Estate brokers don't invest in Real Estate. That's why they're called brokers, cuz they're broker than you are." Robert Kiyosaki.
So newbie, if you're looking for some assistance in getting an investment property, I can definitely help you. (Especially if you want dual-occupancy cashflow positive stuff, cuz that's what I love.) but, I'm biassed, I have an agenda, and I get paid if you buy something that I find for you. Sucks, huh?
Ben.
Why duckster? Cuz I originally came with the intent to flog my business. And then got interested in other conversations.
My Bad.
Ben
Terry's right. I agree with him 100%. To expand on his points a little:
There are some good strategies out there involving SMSF and property, but I would still hesitate for a few reasons:
1. Equity can't be accessed. ie once growth kicks in you cannot increase the loan.
This is true, at least for the moment. If one was planning on doing a 'Jan Somers' by using the first property to get the next and so on, at present it can't be done. You're limited to one per deposit. If you wanted to have a second property in your super, then you would need to have a fresh deposit in your super (somewhere along the lines of another 100k) to go again. This is because the first property is somewhat 'fenced in' by a trust when you set it up. This has it's cons, but also it's pros too, as the same thing protects the buyer from copping a hammering from the bank should the deal go belly-up. I am hoping that sometime in the future the government makes it easier to access the equity from a superfund property, because after all, the idea is to create wealth and set people up with a retirement fund. Putting a block on the ability for duplication is only counterproductive to the overall goal.
2. Its complex using a SMSF to buy property
It can be, but not so much for the investor as it is for the people they employ to get it done. If you know the right people (like I do, because it's my job to!) it's a relatively smooth process for the investor.
3. Establishment costs are highDepends on what you consider high. We do the whole lot for about 5-6 grand. That includes setting up the SMSF from scratch, and doing the paperwork for using it to buy a property. I've heard stories of people charging as high as 30 grand to get it done. (Ridiculous.)
4. Rates are highActually, I might ask you this question Terry. I've been told it's about half a percent higher? Is that right? How much higher is it?
5. LVRs are lowish
Banks usually want you to put a third in as a deposit. That can be a lot to find, when comparing it to a regular loan (not through super) where you can have a much smaller deposit. However, it's a weigh up. One way gives you lower or zero capital gains tax, but requires a bigger deposit. The other way is a smaller deposit, but you still get hit with cap gains. What do you think is better?
6. Its a good idea to diversify and invest in some shares using super too.I'm definitely not saying that I think property is the most profitable of investments. Not at all. After speaking with several financial planners on the subject (I am not one!) , a lot of them say that they much prefer stocks and shares etc as it has a higher potential to turn a bigger profit. I cannot disagree. But then, not everyone is interested in stocks or shares. I don't know anything about them, and it doesn't really get me all that interested either. It just doesn't sound like my kind of fun. I'm fully aware that if I educated myself on stocks and shares, I would probably learn how to make more money through them than through property. The thing is, I enjoy property. I'm excited about property. I like the concept, I loved Steves book, and I plan on duplicating his methods. It may not be the absolute best option if I was trying to maximise my profit through the most efficient means, but surely you'll agree that getting involved, taking control of my own super, and investing it through a means that still works and that excites me is better than leaving it sitting there doing nothing in an externally managed fund?
Thoroughly enjoying this chat.
[email protected]
http://www.superselfmanaged.com.aubrilliant. thanks. learn something new everyday.
Anyone can live off equity right now if they really wanted to. It's all relative to what level of lifestyle you wanted.
Move to india. They live on 500 bucks a year over there.
…I'm just sayin'.
Hmmm…. That's still doable, if you wanted to get yourself a really basic, small, and tiny investment home out in whoop whoop. Something that was about 70 grand. If it was me, I'd still be looking to use it to it's potential if I could.
Otherwise, not so much you! Unless you were nearing 60, then I'd have HEAPS to say.
Hey Jac, I've never even thought about landlord insurance or tenant protection, whats the general gist?
?? Who wouldn't want to know how to buy property through their super?
Hey Wyeth,
Sounds like you're off to a good start with your deposit. You might also be interested to know that if you have any super sitting there, you can use it as a deposit to invest in property, and avoid paying capital gains tax.
Also, if you're looking for a cashflow positive house, I have contacts that can get you one through creating dual occupancy house and land packages in brisbane.
Drop me a line if you want to know more.
Ben.
Pete, I'd recommend reading Steve Mcknights books for a start. He'll have you convinced of buying cashflow positive properties from day one, and avoiding negatively geared properties as much as possible.
I plan on never buying a negatively geared property, ever. I still plan on buying many positively geared properties. I'm going to do it through dual occupancy houses. It feels almost impossible to find a positively geared property that is a single occupancy. So, if I can't find a house that does the job, I'll build one.
This is what I have recently done.
I built a dual occupancy house, taking advantage of the first home owners grant of 21k. (yay!) I am renting out the second half of my house, and living in half on my side. But it doesnt stop there. I'm also going to be renting out 2 bedrooms on my side to japanese exchange students. This means, that I will be getting $300 rent from my granny flat, and a further $400 rent (after expenses have been paid.. they pay 290 per week EACH tax free) for the two rooms. So I will be in a very unique situation where my house is cashflow positive… even though I'm also living in it! It's a springboard to get me started onto my second, third and fourtieth property. Minimise expenses, maximise passive income.
Don't forget, that you can also buy investment property using your super fund if you know how.
flick me an email and I'll fill you in.
Oh, I also forgot to mention, if you're looking for a cashflow positive dual occupancy home, I can tell you where to get one. I'm currently in the process of doing a deal with a developer/builder to get in before he even puts his stock on the market.
Try this one on for size newbieinvest,
Do you have much sitting there in your super fund? It's actually possible to get yourself an investment property using your super fund. There are a few things to consider first though.
1, banks will only lend 70 percent of the loan against a super fund, and they don't want to play unless you can find a cashflow positive investment. (Or pretty close to it.) This is because when you buy investment property through your fund, and the investment goes belly up, the banks can't come after you for the debt, they can only come after the superfund itself. So they want to make sure that you have a winner before they give you the money for it. So, if you wanted to consider buying property through your super, you'd need to have about 100k sitting there ready to play with as a deposit. If you don't have that much, but collectively between yourself and your partner you DO, then that is good enough also. up to 4 people can pool their supers together and buy an investment property.
Now, you can buy almost any property that you decide upon, so long as the banks believe it is a healthy investment. But if you're having a hard time, just think, two words, dual occupancy. Build a dual occ home so you get double the rent. With a significant 100k dropped down as a deposit, the banks will give the nod, and you've got yourself a cashflow positive investment using money you didn't even know you had. High fives all round! Not to mention, you don't have to pay capital gains tax or contributions tax if you sell it after you hit your pension phase, and if you do it before, it's only 10 percent capital gains tax. So it's actually a lot easier to make a profit when using your super fund than if you tied up your regular cash.
So, if you're worried that you may not be able to get a loan with your current income, maybe take a look at your and your partners super. You might have a winner after all.
How do I know this? It's what I do for a living. I work for a self managed super company.
Email me if you want to know more. [email protected]
Here's a thought… dual occupancy properties.
I just built one for myself. it cost me 410'000 for the house and land package in hillcrest qld, and is going to pull in approximately 6-700 per week, once I move out. I am renting out the second half for 300pw, and when I leave, I should be able to get 350 for my half.
I'm currently in the process of talking to a builder/developer who will be able to get me more of the same. If anyone wants to know more about how to get their hands on one before it hits the market, flick me an email.
I also work for a self managed super company, and if you have any super, I can show you how to buy property using the money in your superfund as a deposit. (Betcha didn't know you could do that, right?)
