Forum Replies Created
Kiyosaki is off my Xmas card list. I used to respect him till I found him promoting crappy MLM’s for cash. And I listened to one of his audio tapes and he talks down to people like they are 2 year olds.
very well done Chandara, luck only or were you advised to do that?
try a company like Wright Books, they do all the legwork, you simply hand them the text and they do the rest. You dont get much though, its like $2 a book profit. Alternative is to pay for printing yourself, and do all your own marketing, which means canvassing every bookstore in WA, and keeping them stocked. LOTS of work, but lots of money IF it sells.
I was also told to try http://www.moneybags.com.au but havent looked into it.
Your book sounds like a great idea.
why do you need 20%? is that simply for M.I?
90/10 loans are easy to get.
Your IP is under contract? offer early access with rent. or is it currently tenanted?
if the criteria is non-genuine savings, get a loan from family. are you using a mortgage broker? some lenders dont care how long the employment is.
we were offered 6.11% instead of 5.95%, due to non genuine savings and short employment. not a big difference.good luck
lol @ MLM
wot a scam!
my partner gets about 3 calls a day from network marketers who tell her she is a great saleswoman and they would like to offer her a position in their company. It seems MLM is a big thing in QLD, lots of suckers or lots of people struggling to find work?
I went to a MLM meeting bout 10 years ago, they were saying at the time that network marketing was growing so fast, by 1997 networking would be bigger than Coles or Woolies. It was simply pyramid selling, and whats worse is you have to con your friends and family into buying your crap.
just to show im not just a share ramping property hater
I often have this discussion with people who argue that the purpose of property investment is to acheive capital growth. Ask any investment guru, they will tell you its all about YIELD and positive gearing. The bank doesnt care about capital gains either, they care about how easily you can service the loan. If your property value jumps 20% but your rent doesnt, you still have the same mortgage payments to make. Plus CGT really sux.
If you dont believe me, go play Monopoly, and tell us the object of the game. Does capital growth come into it? Why do you think that is?
thanks Michael
That type of thing still requires a licence, although many people do it without one. I read in the paper a while ago about a guy who ran QLD fund for 5 years, when ASIC caught up with him they simply got a court order asking him to stop. No fines, no nothing. Who says crime doesnt pay?
I dont mind exploiting a loophole or something, but its got to be legit.
you have a point there.
my view is that if someone is going to promote entry into an investment that is booming, then they have a responsibility to warn about the end of the boom and promote the exit of the investment. Unless of course it can be justified that exit is a worse option than staying put.
Now Steve could tell me to shut up and bugger off, but I was under the impression this site is to help people succeed in property. I forsee that many will endure failure in the future, and success may mean getting out or not getting in to begin with.
At the end of the day its all about each of us making the $$$$$$$$. Yes you might make money buying property here, but I see the risks are great. Im not saying property is a bad investment. Im suggesting we all look for the BEST investment.
I wrote a lengthy post yesterday regarding this matter, but decided not to publish it. I think it would have rubbed a lot of people the wrong way. people dont like to be told negatives.
I will post it now though:
Today the RBA changed from an easing to a neutral bias. This means the interest rate trend has changed. Rates are going to go up.
Firstly, well done to Steve for his success to date.
With 130+ properties (are they all wraps?), and all of the wrapee’s paying 2% above normal rate on an inflated valuation, what happens to Steve and his wrapee’s when interest rates skyrocket? I dont think Steve is aware how these deals are like domino’s.
There is no way in hell he can get out of enough of these properties in time before his cashflow dries up. If rates go to 17% again, your wrappee’s are paying 20%. They couldnt afford finance at 4.75%, so at 20% its extremely unlikely any of his wrappee’s will not default. Even if only a few default, the domino’s may fall. I spoke to a guy who went through this in 1990-1. He explained how he was forced to sell off his 35 properties one by one into a falling market, as his cashflow dried up day by day. The end result? He was left $500k in debt. From $5m up to $500k under.
How would the wrappee’s feel about Steve selling their properties from under them? What are the legal implications? Is it even possible? Is there another exit possibility?What is the solution? Share traders have a rule. never take on more positions than you can manage. I doubt Steve could manage 130+ problems at once with success. If it were me I would reduce my exposure, and hedge against interest rates. Then I would invest in shares.
Sorry to be a wet blanket but I hate it when everyone is lookin up and not watching out for potholes. It is the sign that things are about to turn ugly. Greed adversely affects the decision making process.
some good points there HousesOnly
I agree with what you say mostly, but any investment is only as good as its income. A house is a tangible asset, but unless there is a rental income it is a liability. Shares have their own “rent” in their dividend payments. Either investment can lose its income for a long or short period. An ininsured house can burn down.
As for volatility, its a little misleading. Shares rise and fall daily, and I bet if we got property valuations daily we would be a lot more scared. If I was to show you a chart of the all ords using only one price per year, you would not see any volitility at all. There is a perception that property is less risky, as I showed in another post, in 1990-1 property prices fell 30% and stayed there. In 1987 stock prices fell 22% in one day, but then started going higher again. Individual shares can go to zero, which of course a property can not. But an index can never go to zero by the same token.
mcdeyess – yes the exchange fee matter is rubbing a lot of people the wrong way. Remember though that aussie stocks are only 1.7% of the world market. There are plenty of stocks in other countries to trade, which have no fee. you only pay $30 if you trade oz stocks.
98.3% of the opportunity is OUTSIDE aussie.forgot something:
I would do the positive gearing shares thing I mentioned, but I dont have the capital to produce enough income. I could borrow the funds, but no banks is going to approve something like that. Setting up a managed fund is illegal, though I could borrow money from anyone, and build my own fund. All depends how safe the lenders feel. I could probably offer a fairly high return to attract people, and let it grow by word of mouth. Shouldnt be too hard with fund managers performing so badly, next to them I could make only 2% and still look good.
I was told yesterday by a mortgage broker that banks will run away scared if you tell them you are a developer. Its too risky.
Trading packages costing $10k?
urgh.
RUN!
Those are black box systems, which claim to tell you when to buy and sell. They dont work, never have, never will. The ONLY way to make money trading is to LEARN it yourself. I have set myself up to school new traders but figured I would need to wait till the bear market ended. I have written a book which I will wait to publish.
If there is enough interest though I may get things moving.
Deal for Free has recently changed a few rules:
– margin on indicies is now 1% (3%) aka 99% LVR
– indicies will soon be accumulation based, ie pay dividends. This is fabulous news. I was going to invest in the aussie index, but when paying 5.75% p.a in interest and getting no dividends, it was negatively geared. Soon it will be like a managed fund, without entry exit or ongoing fees. At 99% LVR the leverage is extreme, and you would want to be VERY careful.It is designed as a trading platform but theres no reason not to use it as an investment platform. You miss out on some tax benefits though, like franking credits. You easily save this amount in costs anyway.
if you couldnt see anything wrong with the HIH ONE or AMP charts 3 months before they collapsed, visit OPSM. The warning signs were there.
As for a current 1 week pick, risk is inversely proportional to time. I dont make trades like that. Secondly, I am more inclined to short a stock right now than go long, and two I am currently short are WBC and BHP. In a month they will be down 10%.
lol @ DVT. I killed on that also. But hows this, went on holiday at a timeshare and this couple asked me what stock to buy, so I told em DVT @ $2. 2 years later I saw them again and they bitched at me cos they didnt sell at $6 and kept them till they delisted. yeah…im REAL sorry you tripled your money in 2 months and got greedy. sue me. lol
just to clarify:
i said stock yields are high right now. some are, but stocks will drop over the next 3-4 weeks and yields will jump. yields right now however are still higher than sydney property. soon they will be back to 7-8% as they were in March.
westan – who said anything about inexperienced investors? they only allow experienced investors to get an account, or at least state they have experience.
margin is 5% for shares and 1% for an index. Thats right….99% LVR. Thats just too much leverage though, I dont do it much.
I also stated that you should gear with HIGH YIELD stocks, not rubbish like DVT HIH ONE et al.You sound like one of these people who is under the misimpression that shares are more risky than property. property prices fell 30% in Melbourne and Sydney during 1990-1. In 1987, the Dow fell 22% in one day, but ended the year HIGHER. Also, that crash was triggered by computers doing stop loss orders, it was not 100% attributable to a panic sell as many believe.
Just because you dont get a property valuation every day, doesnt mean you arent taking the same risks. You can just as easily lose $5k deposit plus $5k more in a $100k property deal, in fact you will lose more due to stamp duty, agents fees etc
ps im up late cos i am trading the S&P
“But there are Big risks with the market in USA, P/E’s are very high and there is a risk that the market could easily fall 500-1000 points if the long awaited recovery doesn’t eventuate. And if Deflation hits then we are all in trouble, unless you have cash.”
Obviously you have some knowledge, which is good. I agree the p/e’s are high and a large fall is possible, but market dynamics have changed. The market has had many chances to correct properly, and has failed to do so. To gamble on it happening anytime soon is foolish. I personally wont buy at these levels. I am waiting for a 15-20% drop, at which point I will buy for the long term.
Deflation – most people, including the majority of analysts, dont even know what inflation is. Its one of those words that everyone just knows, so nobody bothers to look up the definition. Everyone thinks inflation is “rising prices”. This is merely a SYMPTOM of inflation.
Here is the textbook definition:
“an increase in the monetary supply, or a decrease in the goods and services which can be purchased with the money supply”
Now if we think about it using that definition, any suggestions of deflation are laughable. The Fed has been injecting liquidity into the economy at record rates. Furthermore, congress has approved many tax cuts. We have inflation in a big way. The problem is that the funds are flowing into the housing sector, instead of consumer spending. This is why we have no symptoms in the form of rising prices, except in property.
westan, the product is deal for free as richo stated.
my figures are out of date? they will never be out of date. They are based on 350 years of HISTORY. Any idiot can look at the returns over the last 5 years and say property has done better in that period, its not rocket science is it.
If you dont believe us about the finance and gearing, fine. Perhaps you will wait till the market triples, when everyone is jumping on the bandwagon and wants to know how its done.
the U.S economy is being pumped with so much fiscal and monetary stimulus, when it finally blows, it will be huge. company earnings will skyrocket, but shares will move well before they do. this super growth will force interest rates and inflation to skyrocket, so anyone stuck in property and without shares is gonna get hurt. This is not a possibility, it is a CERTAINTY. Only the timing is unknown. When interest rates are 0.75%, and a lot of home buyers have over-extended even on this low rate, plus you have a real estate bubble…….interest rates have only one place to go. There will be defaults on mass. Distressed sellers will flood the market, prices will crash. Investment capital will flow from property to shares, and it builds like a snowball. Nobody will want to invest in property while yields are low, prices are falling and there are more sellers than buyers. They will instead look at the rising stockmarket and invest there. If you are not in shares 6 months before the economy takes off, you miss buying the bottom.
i have some cliches which may help:
– ZIG WHEN THE LEMMINGS ZAG
– BE A SELLER OF HOPE AND A BUYER OF DESPAIR
– WHEN EVERYONE AGREES, NOBODY IS THINKINGIm probably going to hit a wall of denial from property advocates with vested interests and bias.
I was hit by a similar wall of denial 3.5 years ago when I warned tech stock buyers about the coming crash.
