Forum Replies Created
Thanks again
Could anyone clarify the definition of ‘metropolitan and major cities’ areas?
Would it for example, include, say Ballarat, Geelong etc??
Cheers
David U
Great.
Thanks everyone.
These loans are just for short term holding; ie buy, settle and then on sell immediately at retail (not wrap!), so the interest rate is not of the utmost importance as the property will be held for say 120 days max.
Stuart, with the Eurofinance loan mentioned, are there are loan break fees and post code restrictions?
Cheers
David U
Hi
Been a way for a while. It is true that this subject has been bled to death.
In my experience, the best deals are not found on the internet at all. They have been found, just walking around looking in real estate agent’s windows….
The internet certainly works as a filtering tool for possible investing areas, but just looking at the internet and saying there are no deals is clearly incorrect.
Hint: When you go walkies, look in the windows of agent that DO NOT advertise on the internet… your eyes will surely open!!!
Cheers
David U
Hear hear
Well said Mr Trass for articulating perfectly my views about why it can be hazardous to invest in small rural NZ towns.
Coming from such a knowledgeable and authorative source as yourself, I hope others will take heed of your words of wisdom.
Best
David U
Hi Delight
When you say ‘bought’, what exactly do you mean? Have you signed the contract yet?
If so, be careful, you may be in a position where you have a legally binding contract and will be forced to purchase despite your reservations. Check the contingency clauses in your contact if this is the case.
My advice for what it’s worth (and this is from PERSONAL experience) is WALK… No in fact RUN QUICKLY!
I would only buy the property if the vendor were to fix these problems PRIOR to purchase, I personally wouldn’t want to inherit these problems unless it was at a ‘significant’ discount; ie if it’s really worth $83k in a fixed up condition, I wouldn’t pay more than $70k.
Forget about the cost of the inspection, it’s a business cost and money well spent. The vendor and the vendor’s agent will DEFINITELY not want you to flag these issues to the next prospective purhaser.
I understand the fact that you’re a newbie and this is your first property, but DON’T get emotional. If you set up your rules BEFOREHAND about what you are trying to achieve and what is acceptable, then in reality the decision should always be an easy one.
If it doesn’t comply with your rules… go find another property (without any real problems).. there are plenty more.
Finally how do you know if there is a demand for wraps in Morwell.. Especially for 2 bedroom properties? Doing the correct research BEFOREHAND may provide SURPRISING results!
Make sure you have an exit strategy if it doesn’t go as planned and make sure you can sleep comfortably with this outcome.
In any case, good luck with the decision you ultimately make and congratulations for taking positive ACTION and making progress.
Cheers
David U
Suckers??!!
Here’s a link that will explain wraps in a bit more detail
https://www.propertyinvesting.com/strategies/wraps
Personally, if I was you, I’d pay EXTRA special attention to the ‘Critical Success Factors’
Cheers
David U
Hi
I 100% agree with Elysium-M.
In a situation whereby you employ the services of a valuer who will effectively ‘roll over’ for you , there are two (or more) possible consequences
i) The valuer will get blacklisted by the lending institution
ii) The valuer will sue you
This is what is happening in NZ to ESC (RichMastery)who are currently being sued by 5 blacklisted valuers for this type of behaviour.
Cheers
David U
Kooringal
No probs. Real estate is essentially a game; play by the rules, you get what you want… Everybody is happy.
Also forgot to add, in putting together comparable sales, EXCLUDE any recent sales that will not benefit you; eg property a few doors down sold cheaply due to a distressed sale will NOT add to your case, so do not include it in your handout.
Once the valuer sees a clear pattern of sales and values, it’s generally a no-brainer.
Also ensure you put the RE agent contact details (phone no) who sold the properties, the valuer will phone them up to check.
All the best
David U
Hi Kooringal
In this current market, valuers are extremely busy and in carrying out a valuation will just look at recent sales which in most cases are in excess of 6 months old. This is a problem in a fast moving market.
To ensure you get the valuation needed, YOU have to do the homework for them; ie provide them with 5-6 recent comparable sales. Provide the address, type of property, sale price, real estate agent details and date of sale; ie provide COMPELLING evidence.
All this should be handed to the valuer BEFORE the valuation, they will be grateful for this and in my experience this almost always ensures that you will get the valuation you need.
There’s little point complaining after the valuation… the horse has bolted, although in some cases they can be persuaded to change their mind.
I think it would be worthwhile doing the above and then paying for another valuation. If it costs $300 to pull out the extra $80k that you think the property is worth, that would be money worth spent?!
All the best
David U
Hi Ish
I don’t think the vendor is being too greedy. You both have agreed to the purchase price, so there’s no real need for the vendor to reduce the price REGARDLESS of the valuation.
Unfortunately, I believe the vendor understands your pysche, ie i) You are a newbie ii) You are an out of towner. Put i) and ii) together and you get a highly motivated BUYER… YOU!!
In this current market, the vendor probably won’t reduce their price.. after all there are plenty of cashed up ‘investors’ around.
At the end of the day, it’s your choice if the numbers STILL make sense even after forking out the difference, then go for it BUT be aware of what your exit strategy is, ie if you need to sell in a hurry, you will more than likely sell at a LOSS…
If this is not satisfactory, walk..they’ll be another property next week… next month…
Ensuring the numbers make sense is essential.. so is patience
All the best
David U
Hi vluu27
I understand what you are saying but I feel that’s closing the stable door AFTER the horse has bolted.
My point was that UPFRONT research would have uncovered these distasteful tactics that yourself and many people are unhappy with; ie a refund would not have been required as the research would have led you to the correct decision in the first place.
All this is of course irrelevant now as the money has now been spent. Hopefully you’ll be able to get a refund as per the ASIC ‘loophole’, so good luck with that.
I really do get mad about people constantly getting ripped off with one scam after another… but it continues and will continue ad infinitum and a day.
Unfortunately as we continue to behave like ‘humans’ and seek out that quick fix, things will remain constant.
Nigerian letter scam… $5 Billion (US) and counting… Need I say anymore?
Cheers
David U
Hi
Not meaning to stir up a hornet’s nest but…
First of all, I’m no fan of HK or of anything that he advocates.
However, in my opinion, people who are prepared to pay in excess of $15k for a seminar WITHOUT doing their due dilligence about the company or the officials behind it (ie eyes wide shut)in the remote hope that it will be a PANACEA for all their financial woes, really have it coming to them.
Each one of us is responsible for our financial future and it DEFINITELY is possible to achieve financial freedom in a relatively short period of time, but paying $15k and expecting to be spoonfeed instant riches… Come on!!!?
TT had a lady who paid $46k for her whole family to go to the HK courses… Another lady who financed the cost of the seminar over 4 years; ie had NO money…!!!
Forking out this kind of money then squealing like a pig to TT or ACA when it all goes pear shaped indicates to me that these people still haven’t learnt that much.
It’s all about personal responsibility as far as I can see.
Cheers
David U
Hi Sooshie
What you are saying is true; but seeing as I will be moving to NZ permanently in the next 12 months, I was making my comments from the perspective of a NZ resident.
Cheers
David U
Davo
Basically NOTHING… Well not much anyway
No stamp duty on loan
No stamp duty on mortgageCosts will be:
Application fee for loan
Legal/conveyancing costs
Inspection costs; building, pest and LIM
Valuation report
Minimal settlement feesThat’s about it!!
P.S also NO capital gain tax if it’s bought as a long term buy and hold
Cheers
David U
Hi Barb
Thanks for that post… My spiel was for the general info of ‘Non-Kiwi’ newbies who may be confused with all the terminology and its relevance.
I already know you have your system down pat. [
]Sooshie… No probs
Cheers
David U
Hi Westan
Sounds too easy…
What about credit checks?
David U
Westan
Good stuff!
How did they verify your income?
Cheers
David U
Bruce… Lemming…? I doubt it… I can confidently say that you’re ONE of a kind.
My strategies for reducing risk are as follows:
i)All my loans have now been reverted to p & i
ii)I have 3 months worth of cash in the bank to cover absolutely worst case scenario of having all my properties empty.
iii) The combined LVR of all my properties is less than 70%
iv) Buying correctly upfront, so if I had to sell in a hurry, I don’t incur any loss
v) Also, having a balance of properties CF + properties supporting/funding higher growth properties to capture both income and real wealth.
Cheers
David U
Hi
Just a note of caution about using GV as a proxy for the market (real) value.
GV’s are basically government valuations carried out by local councils every 3-4 years by use of an almost ‘adhoc kerbside’ methodology.
They are also known as CVs (Capital Values). Capital Values = Land Value + Value of Improvements to the land (ie the building itself).
Please note CV/GVs represent the ‘property value’ at a point in time; ie at the valuation date
What you will find is that the banks pay NO regard to GV/CV and will lend based on a RV (Registered Valuation) which will reflect the current market value.
Currently in the hot Auckland market, properties are selling at DOUBLE their CV/GV.
In other less popular areas (ie rural) you will find properties selling at 50% of their GV/CV. These are by general consensus ‘depressed’ areas; ie ‘values’ have effectively halved.
The danger for a newbie (especially a non-Kiwi)buying in NZ is that they can take CV/GV as a proxy for real market value and purchase on that basis. This approach is fraught with danger and can get the newbie investor burnt in a major way!!!.
This is particularly dangerous when paying cash for properties with the intent of obtaining finance down the track… one may be in for an unpleasant surprise when the REAL valuation (RV)comes in…
The best place to obtain recent and comparable sales is http://www.qvonline.co.nz
For example, you pay approx $25 ish to get a report on a particular property which comes with approx 10 recent COMPARABLE sales.
This is invaluable and I use this before even thinking about buying. This assists me becoming an expert in a market in which I am a relative newbie in.
I hope this helps
Regards
David U
Hi
Let me put the quote into context.
It was made by a U.S journalist 3 months PRIOR to the crash of the internet (Dot Com) sector.
To paraphrase, he was basically saying was that one could normally predict the bust of a bubble because normally record and unprecedented levels of activity precede the impending crash.
I think in this case the journo mentioned record number of new entries to the sharemarket for that particular month.
In reading this, there was definitely a ring of familiarity, ie the record levels of investment borrowing last month in Australia; ie 50% of all housing finance going to investors?
This wasn’t particularly a commentary/quote on any particular form of property investing or investor.
I just thought it was an interesting insight based on where we are in this particular investment cycle.
Cheers
David U
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