Forum Replies Created
A : Never. Go the growth every time. Lately, our acquisitions have been both. Mostly land value and also cashflow positive. It is possible to have your cake and eat it too.
Q : With your PPoR, how wide a block do you consider is nice….to maintain a tad of privacy ??
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
You’ve obviously never met those solicitors that the Banks employ to draft the Guarantor documents.
Your major question of “Will it tie me down too much.” You can bet your bottom sox it will…if not the Banks will redraft it until it does.
They’ve had a good while to get it just right, including a few recent amendments and alterations to protect themselves against all these bleeding hearts and poor little innocents who thought that going guarantor was just a really cool, nice thing to do until being forcibly evicted from their home.
All of those loopholes and specific leniencies that the judges gave have also now been written into the document that you will be forced to sign. There is now nowhere for you to run and hide.
Will it tie you down ?? You betcha, it’ll nail your hide to the wall.
I’ve been in this situation before, both as the seller and the buyer.
As the buyer I played it up for all it was worth a got a sizeable chunk off the agreed price.
As the seller, I told the buyer that we already knew about it and that is the reason we agreed on such a low price. We were happy to rectify, cost estimate was 5K, but we told the buyer with time and us fluffing around repairing the damage, it would add another 15K onto the price. The buyer signed off and the contract was then unconditional.
IMO these building and white ant reports are walk away decision points…you either release the clause on the contract or they allow you to tear the contract up and walk away.
What they do not allow you to do is negotiate price. Tell the buyer to stick the report up his jumper.
Just out of curiosity, what % of value is the construction worth ?? IMO it depends very much on this.
i.e. Purchase price 200K, land value 170K…buyer is after the site and talking about white ants is a smoke screen. Purchase price 200K, land value 80K…buyer is after the construction and talking about white ants is important.
Just my thoughts…
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Geez LifeX, watch your back and hernia doing stuff like that. If you blow a gasket it is never worth it.
Funny you should mention palm trees however….
Have I got a deal for you.
We own an IP with a very large palm tree in it. It’s about 8 feet circumference around the base and about 35 feet high.
If someone wants it they are most welcome to it. To my positive way of thinking they are great for three things…
1. Dropping their frond poiny things everywhere.
2. Potentially falling on the house and crushing everything in their path.
3. Being a convenient place for rats to congregate.If anyone values these palm thingys, and you are willing to extract at your sole cost and risk, you are most welcome to it.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Never considered a recession or depression. Not interested in the macro side of things…far more interested in my micro economy.
Even if interest rates rose and ‘business confidence’, whatever that really means, took a dip…I’d still pursue what I have been doing.
Buying distressed large industrial land holdings for less than land value, cleaning them up with a bobcat and truck and leasing them out to national tenants for a positive cashflow will work in any environment. There is enough fat and profit in the end product to buffer against all eventualities.
I will never be scared of the “Yeah but what if” brigade. If I had listened to them I’d still be paying off my PPoR mortgage and wringing my hands worrying about investing in my first IP.
With a bevy of grumpy elderly mentors who don’t pull any punches now to draw advice and knowledge from, it feels like I am starting off afresh to tell you the truth.
It’s amazing how many levels there are in this property game. Having just recently opened the door on this higher plain, I very much like the look of the new rules and the flow of the game. I’ve noticed there’s a few big boys who play rough on this higher plain, but I’m sure I’ll give as good as I get.
I realise there are many levels well above me yet to be attained, but with steadfast determination and time as my allies, I’ll get to play them soon enough. A dodgy tenant or poor economy cannot and will not stand in the way.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
IT HAS BEEN CALCULATED THAT IF EVERYONE IN AUSTRALIA DID NOT PURCHASE A DROP OF PETROL FOR ONE DAY AND ALL AT THE SAME TIME, THE OIL COMPANIES WOULD CHOKE ON THEIR STOCKPILES.Would love to see the calculations !! I think you’d be able to drive a truck through the holes in it.
AT THE SAME TIME IT WOULD HIT THE ENTIRE INDUSTRY WITH A NET LOSS OVER 4.6 BILLION DOLLARS WHICH AFFECTS THE BOTTOM LINES OF THE OIL COMPANIES.No it won’t…the consumption won’t be halted. I predict the email won’t reach any more than 5% of the motoring population in Australia. A mere blip at worst / best….depending on which side of the fence you sit on.
WAITING ON THE GOVERNMENT TO STEP IN AND CONTROL THE PRICES IS NOT GOING TO HAPPEN.Absolutely correct. I hope you are not under the assumption they control much. This game is bigger than entire countries. The tiny Australian government and the even smaller (read irrelevant) Australian population shall dance to the tune that is chosen for them. Sitting on the sidelines not partaking in the dance is not an option the Kings / Sheiks / Emirs / Presidents will present to the consuming public.
WE CAN MAKE A DIFFERENCE. IF THEY DON’T GET THE MESSAGE AFTER ONE DAY, WE WILL DO IT AGAIN AND AGAIN.Our entire daily production and consumption is less than 1% of the worlds figures. We are a fly speck. Another example of myopic untravelled Australians thinking we actually register on the world scale…we don’t !! I predict this whole nonsense is at best going to affect 5% of 1% for one day….I’m sure you’ve got them quaking in the desert sandals.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
The way I read this is the exact opposite to the reaction at auction…you know the ones where the camera swings around to the smiling, smarmy couple who comment that they were extremely happy with their purchase and picked it up for 20K less than they were prepared to go to.
From reading the above posts, it appears this was the same tactic employed but on this occassion backfired.
I also believe that it is not so simple to just move on to the next one. With the amount of DD I do before sitting down to a serious negotiation session (the Manila folder is chocka blok)…if it all pans out good then if you fail to buy it there is definitely a daunting prospect of throwing all that time and research down the toilet and starting from scratch again.
Just so you know someone who has, I’ve purchased 3 IP’s at full asking price. The DD research told me I was onto a winner and why stuff around. Over time the difference in haggling with the vendor and losing out on the prop is something like 13.48% vs 13.41%. My time and DD research is far more valuable than 0.07%….especially if the next best thing on the market at that particular time is say 11%.
If you get the opportunity to buy next door, and triple the value of your block of dirt, and that opportunity opens up once in 60 years, are you really going to haggle ???
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Terry is right.
The ATO goes straight to the Titles Office and sees who is on there.
They care not a cracker about what knots you have tied yourself in to keep the Bank happy.
X gets 100% of the rent and 100% of the deductions. Y is entitled to a cup of tea once a week…if she’s lucky.
None of the above should be relied upon. I’d suggest coughing up $ 500 to ask a solicitor formally, who is qualified to give you advice. If they get it wrong….you can then spend another $ 50,000 trying to argue with them.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hiya indrielkat,
Most people get offended with what I say, so I’ll keep it short and sweet…
1. Without agreeing a way forward with the hubby ‘the plan’ won’t go anywhere.
2. I find it counterintuitive that you wish to partake in a rental market as a tenant at a rock bottom price, negotiating $’s off the rent before you’ve even seen the property and whether it suits your needs…..and in the same breathe want to participate in the same market as a Landlord but are only interested in +CF places ??? What makes you think your prospective tenants won’t have the same “get it for rock bottom rental” outlook.
3. At the end of the day, if the personal exertion income is relatively fixed, the only way to take a quick sprint ahead on the road to wealth is to reduce personal costs….pretty basic stuff I hear you say. Definitely easier said than done, as it always involves impinging on your personal level of comfort…something us Ozzies cherish and are very reluctant to give up.
4. Given your previous choices…snowballed personal loans and C/C debt, along with a dream home and accompanying dream mortgage, I reckon the ‘accumulate wealth’ mindset is currently heading 180deg in the opposite direction.
5. People get very crabby & snaky when someone points out that their previous choices were possibly not the most prudent. Asking for suggestions is OK, just be prepared for some suggestions to not sit well with your current mindset. If it was all honky dorey….you wouldn’t be asking a public forum for generalist advice.
6. My only suggestion is to write down on a list what you are prepared to sacrifice and what it will achieve by sacrificing. With today’s global economy, you could well be a billionaire in 20 years time….but you’ll need to sacrifice plenty to get it. The choices are 100% yours, and the good and woeful that flow from your choices will be 100% yours as well.Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Working for an oil company and enjoying substantial pay rises in the past 6 months, property has become alot more affordable.
Our petrol bill has gome from about $ 160 up to $ 220 per month. This is chicken feed in the grand scheme of things when compared to the pay rises received from the high oil prices.
Wait ’til we have 120 oil, the sheiks I work with will be able to buy the whole of Australia for cash. At 10 MMbbls/day, that’d be 1.2 Billion USD in revenue every day….it’s gotta find a home somewhere !!!
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
although I have clarified that with dazzling yetWhat ??? Totally confused ??? The sentence doesn’t even make sense ???
Either way you cut it brahms, everyone is forced to “try out” these outstanding professionals…sometimes you fall on your feet and most times you don’t.
Unfortunately, sorting the ‘incompetents’ from the good ones isn’t that easy. It takes time and some events to test how good they are. Unfortunately the bad ones don’t have a notice swinging above their door highlighting the fact…hence my previous brochure comment. If you have dream tenants, your PM is never tested…
No one ever forces any free person in Australia to do anything…as you well know – that comment added nothing. What I can tell you is that I didn’t put up with the c*ap service. I’m sure you could enlighten us with your tales, instead of ridiculing me…howza ’bout it ??
Rather than attacking me, do you have anything constructive to add to the thread ?? Do you even have a record to play ??
Give me scratchy every time….what’s the saying ?? Find a profitable niche and repeat it over and over and over again and success will be yours ??
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
19.89% compounded p.a.
Pretty good stuff….although don’t tell the Eastern States chaps that.
One of the guys on the rigs was named Hugh Jars. He was as skinny as a skunned rabbit…so we didn’t get much mileage out of that one.
Thanks guys….maybe I’m the only one with whingey residential tenants. Or maybe I’ve seen what industrial tenants are like and am comparing the two and they don’t scrub up too well.
We are happy with the cap. growth on our RIP portfolio so will just keep answering that phone…blustery and rainy winter nights are the worst.
In terms of vacancies with IIP’s….I haven’t found this to be a risk at all. They go very quickly, even in the dead of winter. If I had of had 70 or 80 little 100 to 120sqm little sheds I could of leased out the lot. The bigger complexes take a while, but the security is there with bigger tenants.
Just on that, I’m absolutely stoked this afternoon, as I’ve just concluded negotiations with the Director of a large national corporation to lease out one of our larger warehouses.
Managed to get a 4 yr lease, with a 2 yr option…90K p.a. nett rent, escalating at 4% p.a. and they pay all of the outgoings on the property (about 16K p.a.). Great to have all of that off my back. They are also going to spend about 60 K on our property doing it up for us. It’s risky I suppose if you can’t get anyone, but if you know your product, and play hardball negotiating…things work out in the end. Hell of a way to spend my time off though. The bright side is we’ll need to write only one, one page letter in the next six years…so happy to spend the time setting it up initially.
That rent combined with the other building on the property leased out, the entire block is now doing 7.5% nett, which means it is slightly cashflow positive. Managed to get 106% finance at 7.25%. I love it when tenants pay you to landbank. Picked it up for 140K under vacant block value. These are rare but do-able.
Better go, the Director expects the lease to be emailed to him tomorrow morning, and I’m still putting the finishing touches to it. We’ve cracked the champers already, so hopefully nothing squirrelly falls into the lease.
I’ve grown accustomed to phrases like “at the Lessee’s sole expense and responsibility, to the satisfaction of the Lessor. Lessor reserves the right to reject any improvements proposed by the Lessee.” Beautiful. Try that with your residential tenants and see how you get on.[biggrin]
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
I say unwise because adamj_81 indicated that he wanted to add to his portfolio.
I can only presume from this that he has more than one IP. If that is the case he probably has some equity available.
I’m thinking the following about housing comm. RIP’s ;
Low nett yield.
Tenants who generally are not financially savvy or responsible.
Lots of maintenance headaches and costsI wouldn’t buy anything that had those characteristics…but then I’m not buying it…so don’t listen to what I say. Do your thorough DD on the specific area and make your mind up from there.
Really, I don’t think adamj_81 has provided enough details for anyone to analyse anything.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Is there nothing that these wet blanket residential tenants will actually step up to the plate for and actually take some responsibility ??
I don’t know how you cruel and heartless Landlord’s could bear to fall asleep, knowing full well the tenant cannot get in to your property….hang on, who’s property is it ??
An interesting situation if they smash their way in and injure themselves (cut artery in the wrist as their fist goes through the window). Who pays for the medical and property costs ?? Surely not the tenant.
I’d immediately jump up out of bed and drive over there to graciously let them in. I’d also help them with their jam-jams and make them a nice warm cup of cocoa, whilst reading them a bedtime story. Even then, the lawyers and tribunals would be saying you didn’t fulfil your responsibility as a Residential Landlord.
What a carry on…thankfully we don’t play those silly games any more.
Suzette – what does it specifically say in your lease about who foots the bill if the tenant loses the key ?? Most likely nothing…in which case, I reckon you’d be up for it, despite common sense telling you the opposite. If you read the legislation governing the relationship between Landlord and residential tenant – you’ll quickly realise common sense has no part to play.
I find it absolutely astonishing that when the going got tough, the PM dumped the responsibility back in your lap. Geez, I’ve never heard of that before.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
roughly how much would this property gaind in value over the past 12 monthsGo to your local VGO for the helicopter view.
Can anyone reccomend me someone to evaluate my property.Pick up the phone and call a valuer for the specific view.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Very unwise IMO.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hopefully no one is under the impression that REA’s and PM’s actually tell you truth and have your best interests at heart, despite all of the brochures saying they are true professionals and their quasi allegiance to the Ethical code of conduct. I say quasi because there is absolutely no allegiance at all to the code…once again despite all of the brochures saying they are true professionals.
Anyone who is remotely under the impression that these guys are sharp, but can qualify to be a professional in a week for PM’s, and a couple of weeks for a REA needs their head read.
Once again, massively misaligned goals between you as the investor and them as cash leeches….
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
