Forum Replies Created
Back in ’97 when we were completely unaware we sold our 2nd IP to a “and/or nominee” and got royally done over by the wily next door neighbours. Cost us 16K.
Not that I’d sell any more of our holdings, but if I ever saw another “and/or nominee” from a purchaser I would take great delight in tearing up the offer and throwing it straight into the bin.
My recommendation is the same as Cata’s…get your paperwork together and write up a proper offer.
HB and Dazzling, with the greatest of respect you are are NOT reading the Question!!If KT had the deposit, this post would not have been written. Here is a person who has found a GREAT opportunity to advance financially and is being held back by lack of deposit. Dont knock the fact the deposit is not there , find a solution to the problem.
With the greatest of respect, I believe I did read the question thoroughly and did answer to the best of my ability.
KT mentioned they had no deposit. They mentioned nothing about equity.
It’s either stump up equity or stump up a deposit. Your proferred solution was to stump up a deposit, via a 3rd party.
You did not offer a third alternative.
I’d also be wary of concluding that KT has found a GREAT opportunity. You know little to nothing of the details of the deal. I believe Harry has rightly put a few valid points to question / test the underlying assumptions of the deal. It doesn’t sound too GREAT to me.
Hi KT,
To secure 100% loan you need to stump up some equity.
If you don’t have any equity, you need to stump up a deposit.
You have to give the Lender something to lean on. I’m sure you wouldn’t lend your money to someone who showed you they had nothing behind them…it wouldn’t give you a warm fuzzy feeling.
Why not knuckle down and save for a deposit ?? More to the point, why don’t you have a deposit ??
It does not take long to hit the LVR and DSR wall; unless you have a job that pays zillions. Unfortunately most people are not in this category; a couple of properties will see them finished.I think if you purchase a fairly substantial property or three, it will knock your ability to borrow further funds no matter what your pay level is.
If you have a high paying job, it helps the DSR, but not the LVR. Pumping free cash into either large deposits or reducing tax deductible (good) debt to reduce your LVR literally feels like a waste of money.
The LVR limit simply takes time to overcome. This is where the buy and hold strategy comes into it’s own, IMO.
Although, I can see others point of view of churning. With fees and duties, it appears to be 2 steps forward one step back…you are moving forward at perhaps a more rapid rate, but the ATO and State Govt’s are sharing your successes way too much.
Craig the WA so-called guru admitted he churns too much, and his one regret was not keeping more of his properties…but then some people need to be ‘busy’ to feel they are striving forward.
The grumpy ol’ chap up the end of the road who I admire enormously has done more than OK with a vacant block at the end of the street he’s held for the last 55 years…not a lot of activity there, but lotsa equity being made every year.
Why is Australia being lumped in with “the world’s richest nations”. ??
The world’s richest nations are typically invited to the G-8 summit.
We’d still be on the outside, with our face up against the pane of glass trying to look in during a gathering of the G-30.
If we just stopped pretending that we are a “player” on the world’s stage and, as they say in the business world, stuck to our knitting, maybe, just maybe, we’d be able to raise our economy to a level where it would form a blip on the world’s stage.
At the moment we hardly classify as a blipette.
Hi Ian,
Being reasonably familiar with the exact wording of these, I’d suggest you don’t want to subject yourself and your property to one of those.
I think you can pick them up for about 50c from most newsagents, but they certainly aren’t worth anywhere near that price.
You guys are all very lucky indeed.
Anything at all would be fantastic compared to last Xmas. That was endured high up on the rocky steppes of the Yemeni peninsula, with two chaps (a Qatari and a Mongolian) who didn’t speak English and didn’t care, or indeed know that it was Xmas day. Admittedly I don’t speak good Arabic or Mongoli and I don’t know when Big Eid is either, or the Mongol equivalent. The fare was sheeps eyes, brown rice and a bit of a chicken wing for the main course. Joy.
This year promises to be far better, back home with my wife and 3 daughters, along with extended family and friends back in Australia, who all speak English and are all aware that it’s Xmas day. Just need to ensure that my back to back agrees that sheeps eyes on the rocky steppes is a better option than home in Dallas.
I agree. No land…no deal.
Unfortunately John I am a “money poor but time rich” type investor…i.e. I’ve got plenty of time to analyse and scrutinise all deals down to the gnats hair. What I don’t have is bags of money to hand over.
Howzabout you pass on all of the details of the deals to me, and then if I’m interested, I’ll contact the REA myself.
I’m a big boy, you really don’t need to act as a buffer for me.
Oil Search shares are also going gangbusters at the moment and I have recently been up to check on progress of new oil fields there is certainly a lot of activity up there asscoaited with energy and mineral developments but the country is still very risky. I actually looked into property up there in Port Morseby but didn’t take it far although if this project goes ahead that might change.I’m not surprised, although I wouldn’t put my money into it. Yesterday, we were all running around like blue arsed flies down on the rigs as we had the entire head honcho group from Oil Search looking at our operation. They are our minor JVP here in Yemen.
The party included the PNG Oil Minister (they own 18% of Oilsearch apparently), the PNG development Minister (he was just here for a jolly), the Oil Search Chairman of the Board, the Oilsearch CEO – Peter Botten, and about 7 or 8 other hangers on.
Thankfully they’ve all buggered off back to Oz and PNG, but they were all pretty impressed as we brought on Nabrajah-5 which produces 6,000 bopd. That’s USD $360K per day.
So what were they most impressed with overall ?? As we flew over the home village of Usama bin Laden and his wives, they all leant over to take pictures of the dusty hovel. The pilot of the little Cessna turned around and told them all to sit down and stop rocking the boat.
Anyway, PNG isn’t all they’ve got going.
Sorry Nigel….a tad off topic, but I’ve had a fun day with the top knobs from Oilsearch.
Hi deb,
OK, alarm bells are now starting to ring very loudly for me at this stage.
I don’t want to seem like a wet blanket, but a property like the one you are looking at is usually split up into three separate components.
1. Land value
2. Improvements value
3. Lease valueGiven that the 25 yr old sheds are worth about $ 500 in total, what you are paying for is the land and the lease. It’s a tad scary when you have no idea what the land is worth and the vendor is playing peek-a-boo with you w.r.t. the Lease.
You must make an offer on the property where you are buying the Lease and you have no idea what the Lease actually says ??
May I suggest that the agent is treating you with a hint of contempt at this stage. They may have picked up this isn’t your 15th industrial deal.
Reading between the lines it appears the Vendor has pitched the deal at 10% nett to attract all comers and see what the net trawls in.
Looking at worst case scenarios now, if the land is worth say 80K (who knows in a mining town what it’s worth…this is where your research pays off handsomely) and they pull the pin in 2 years, you’ll be left with a place worth about 81K and a debt of 350K.
I implore you to do far more thorough research on the terms and proper due diligence of the property. Not showing you the Lease is a farce.
What’s the dirt worth as a %age of the 350K ??
What is the Lessee’s future intent ??
Could you successfully Lease it again quickly if needed ??
Ps Dazz how did you find your mentorOur group bought some of his industrial holdings off him. We got down to some heavy face to face negotiations. During that he said he wished his son was as interested in ‘the business’ as I seemed to be. In his words he said he liked the “cut of my jib”. It went from there I suppose. His grandson is 18 and exactly like how Jenny has described her nephew. I think ‘it’ skipped a generation maybe ??
His knowledge and thinking / viewing level are worth an immense amount to us.
are we becoming more and more Americanised or what!!!!I thought that was a US way to describe…
did I miss something
Wooo doggy…y’all sure did honeybunch.
Xenia, I work with and are surrounded by the good Yankee folk 24/7…right from the get go I knew thangs were different for all these southern belles.
Unfortunately, Australian modern society eagerly lap up all of their dross on the mass media and elsewhere. I can assure you, there is truckloads more where all of that came from, and it’s headed your way ‘real quick like – like right now !!’
It’s going to get far worse before it gets better. Get used to it.
Good on ya Harry – gave me a laugh. [biggrin]
Pretty true but isn’t it… [jealous]
A couple of off the cuff comments;
Hey Redwing…we’ve been down this path before, but if one can’t get access to a Sat West, what to do ??…the data is great, every time it comes out, I’m able to go on my shopping expedition. Data comes out, LVR’s come down, Dazzling goes shopping…woohoo.
hb – absolutely, we’ll dig and drill the bejesus out of our backyard to keep all the paper shufflers in Melbourne and Sydney going. We’ll do the actual work, y’all can just sit there in your suits and watch, drawing up finance and insurance forms….hmmm, how productive. Whose the real mugs hey ??
I’m with you Marisa, I don’t and never would follow Craig the ‘guru’. My Mentor was doing regular 10 MM dollar deals before Craig was born. Whatever gets your face on TV and voice on the radio – right ??
Residential rents jumping 20%…hmmm…I’d like to see that. However, I don’t think the fickle renting folk would, and as usual will up and leave when the economic blowtorch is applied to their feet. There will be plenty of residential Landlords far too scared to put up rents who shall accomodate the underpaying overspill.
I’d love Kerry Packers house, but I cant afford it…I’m not surprised Redwing, ol’ Frank apparently bought the abode in Bellevue Hill for 7,500 pounds back in 1937. I’d say it’s appreciated somewhat in the last 68 years.
Sorry Vyvyen…way off topic I know.
Hi Deb and Brad,
V.O. stands for variable outgoings. These are as you have listed them, CR / WR / LT / Ins etc.
Most competent agents quote the nett rent figures. I’d be surprised if the $36K rent quoted is gross rental. That would be quite mis-leading. (As was quoted in that other thread…the vendor there was trying to do some dodgy lease back, incorporating the V.O.’s with the ‘gross rent”…don’t touch deals like this, your nett rental figure will go down over the years.
The rent should be quoted as $ xx,xxx nett plus GST plus all V.O.
By the way, what’s the escalation rate in the reviews ??
Good luck Deb and Brad…happy days as a Lessor.
Going in and playing hardball (I call lopping a 1/4 of a mill off fairly hardball…your offer is less than 85% of asking price) is very difficult when you are both caught up with the “dream”.
If I was the vendor I would have simply screwed the offer up and thrown it straight in the bin, not even bothering to call the agent. Just out of curiosity, was your offer cash on the nose, unconditional and settlement in 7 days to justify such a low offer ?? Or did it have a whole bunch of hurdles attached to it. Some on this forum even suggest clauses like “My wife must like the colour of the drapes”….Come on chaps, we live in the real world now…as if any of that type of seminar taught rubbish is actually going to fly ??
You’ve put yourself in an extremely weak bargaining position. They are in an extremely strong position. Given the respective positions, I’m not surprised in the least at the outcome.
What does your due diligence and thorough research indicate the property is worth ?? If it’s realistically worth in excess of say $1.6 MM, and your max funds are 1.5, it truly is your “dream” property.
Prakman number look to be right, not run the calcutator over them but I’ll take them as right.Dunno grossy…I hope you run the calculator over your own deals a bit more thoroughly than that ??
Prakman has stated up the top the $ 250 K IP is renting for $ 400 p.w., and then proceeds to use a figure of $ 200 p.w. in the calculations ????
With him multiplying the figure by 52, I’m presuming of course he means weekly ?? [blink]
Sorry…I’ve been told not to nit-pick the details, but I thought a halving of the rent – or is it doubling…was probably slightly significant.
