Forum Replies Created
Knowing absolutely nothing about the Canberra market or to that which you describe, but having dabbled in a RIP or two, I’d be guessing that the block of dirt alone would be worth 1.5 to 2 MM, with no house…..so I’d reckon, as with most other RIP’s, you can forget about anything resembling cash flow positive.
In fact, that would be my question back to you – forget the house, what is the dirt worth ??
Originally posted by dai888:Would you be willing to sell me your property for what you owe on it? If so I could possibly buy your property today. ([email protected])
In answer to your fantastic question – absolutely yes.
This is excellent, right up my alley. I’ve got plenty of complete dogs of properties, all worth about 80K, but I’ve hocked them up completely and got mortgages on each one of about 130K.
If you reckon that sounds like a great deal – then so do I. Let’s have a chat right now so we can get rid of those words “could” & “possibly”. [dazed]
I became extremely depressed. This went on for days.
My husband came home finding me in tears againHey ya Amanda,
Chin up matey – you sound as if you are both doing great guns. Nothing comes easily if it’s any good. Just as you plow through the boggy bits, you’ve gotta realise you’ll come out the other end stronger and more powerful…..invigorated and ready to plow into the next mudhole.
Sounds like you didn’t need me to give you a hand with the reno – all came up trumps – that’s great news.
Keep smiling Amanda – it does get easier. [exhappy]
I’d do the honourable thing and talk to the lady’s eldest son…..face to face…..man to man. Having dealt with quite a few solicitors / barristers and QC’s in the past this is usually beyond their abilities.
Out of principle….if a wormy solicitor (can you tell I despise all lawyers) came up to me as the eldest brother, after the fact of my mother’s passing, and said all the paperwork had been drafted and signed and agreed to buy my mother’s estate without my or my other brother’s and sister’s knowledge or input, I’d be livid…regardless of how many barriers you’d put in place to try and convince me after the fact you were a concerned and caring citizen and my mother did everything of her own volition.
Paperwork, more paperwork and lots of excuse material and evidence gathering….without ever having the kahuna’s to talk face to face with the rightful beneficiaries of the old lady’s estate……that’s exactly what I’d expect from a solicitor. [grrr]
Your “behind the scene’s” manouvering and positioning very strongly reminds me of a French fable where some lawyer in his 60’s tried to swindle some old lady who was 92 out of her estate without her family knowing about it. He had legally arranged….water tight as you say…..with some form of guarantee….with the elderly woman (without the family of the old lady knowing) to fund her final years and in return he would have the right to acquire her estate.
He thought she’d live about 2 years tops and then the spoils would be his……well she lived to be 120 and the lawyer – long since passed away, had to keep paying for her upkeep for the next 28 years out of his estate…..it was marvellous to see how the one supposedly screwing the innocent got royally done over…..marvellous effort from the old lady I thought.
Disgraceful !!!! You have confirmed my opinion of how a solicitor thinks. I want no further part of it….[angry2]
Hello drec0007 / Pippa,
This sounds very very familar [hmmm]……could you be a little bit more specific….
1. What exactly is your brother proposing ??
2. What type of ownership arrangement is being considered ??
3. What type of property is being considered ??
4. What can you bring to the table in terms of strengths…..surely you have something to offer otherwise why would he ask you to join him ??
5. When you say “look out for”….do you mean bad things your brother can do to you and your husband or do you mean good things to look out for to enhance any arrangement you may make.
6. Surely if you are considering a normal house or flat type IP…..you and your husband have at least some clue what you are buying and not completely in the dark.The more detail you provide, the more pertinent the answers will be.
P.S Hey Dazzling, TIC in Albany supply cold beer in glass bottles, call in for a chat sometime.Sounds good – I’d love to pop in for chatski….might take you up on that offer !!!
I’m told that Chris and Liana Grannery are active members down there and were recently profiled in API with their successes……who knows, you may be one and the same.
I’m also told that you have many PMC members down your neck of the woods. Sounds like a few go getters, especially if they serve proper beers afterwards. [biggrin]
In terms of experienced members on this forum who are involved with TIC, have a chat to Derek the guru. He knows a bit.
Maybe i am just seeing all the positives…. No one has really given me any substantial negatives yet…..Hiya,
I think Simon made some valid points, not surprising really, seeing as though he has answered this question probably 50 times or more. What he said pretty much hit it on the head.
Buying an IP from TIC is certainly not a disasterous move by any stretch, in fact many people are almost religious in their fervent passion for how TIC has turned their ship around financially.
I suppose from my perspective, the biggest negative is a very subtle one that only rears it’s head many years after purchase….and that is the opportunity cost of what else you may have purchased with your money….but then that is with every investment and isn’t particular to TIC’s offerings.
TIC always compares against things like cars / super / holidays and other magic investments like that….and obviously their brand spanking new units come up looking trumps in comparison. It’s only when you put them up against a real cracker of an investment that they look decidedly pedestrian. This is where the biggest negative is.
So when someone says this is good or this is bad…..make sure you always ask yourself the follow up question……Compared to what ?? Depending on what you put it up against, it may look fantastic or dreadful. As always, your particular frame of reference at that particular moment in time is crucial in how you “see” the world.
Was that too vague for you to glean anything useful from ??
P.S. I’ve been going to TIC meetings now for over 5 years and haven’t yet purchased anything off them. I go there, not for the slide show presentation, but the casual chats during the coffee breaks. Damn site more enlightening that watching some CSI drivel on TV.
Some wonderful stories can be heard if you like investing in brand new residential real estate with no land component. Oh, and the cup of tea is good, although nowadays they serve it in plastic cups instead of proper mugs…..I think the chap pulling the strings had a look in that area as well.
I remember reading about one old widow who owned only two properties, her very modest PPoR that she’d been in for the past 70 years, and a rather staid building in the middle of the Brisbane CBD, which she inherited from her husband when he died, which he owned freehold for the past 70 years also. So, 2 props, owned outright, and worth about 1.0 MM and 13.0 MM respectively.
Then of course at the other end of the spectrum, there was the up and coming investor who just put a 5% deposit on a skanky block of 50 flats…..well….bedsits really….worth in total 1.0 MM.
Now both of these two characters stand up at some property seminar and summarise their position. The first stands up and says she owns her own house and one IP, and is written off as a newbie or small fish, yet has 14.0 MM of solid equity producing more than 1.0 MM in nett rent per annum. The second guys stands up and says he controls about 50 properties, and everyone assumes he’s an absolute guru, yet he’s just starting out with about 50K in equity with bugger all rent, and constantly squabbling with losers to pay what little they are required to do.
The number of properties owned by an investor, IMO, has never been any guide or barometer of the investors ability or level of competency.
Thanks WC….everything is worth investigating I reckon.
Yes Cata, my limited research so far has uncovered that carparks of the flat bitumen variety seem to be the preferred choice nowadays for ex-tips…..although a pretty swanky townhouse development on the river at Ascot here in Perth used to be a smelly landfill site.
I think they dump about 7 or 8m of soil onto the compacted mess and call it good. I know some pretty well to do people who paid through the nose to live on top of a tip….maybe they don’t know ??
Anyway….
Wow Redwing…..can’t believe more than a year has passed by since we all contributed to this thread….what a ride over the past 12 months here in Perth, wouldn’t you agree ??
Originally posted by gmh454:Foundation you keep forgetting that property doubles every 7 years
Absolutely….nice bit of tongue in cheek there as we all know F’s philosophy and data on that subject.
With what we’ve jumped into over the past two years, the values have doubled in 1 year….not 7. This is great from a capital growth perspective, which is our main objective of course, but with the doubling of values, it has pushed the rental yields down from a nett 10% to only 5% nett yield…..but then we have no plans to sell and so calculate the rent we receive from what we have actually outlayed….in our case nothing. Dividing by zero certainly makes the figures look good.
Negative gearing on a 3% gross yield really does look challenging from an accountanting perspective.
We’d love to hear about any of YOUR tips for negotiating successful property dealsAhhh….in the immortal words of Todd Russell, “No problem…..how big is your cheque book ??”
Happy to negotiate our standard flat upfront fee, or would be willing to discuss a constant trailing commission based on gross book sales volumes…..whichever way you prefer to work it……
Or am I reading your post all wrong…..and you would prefer us to all contribute for gratis in your manuscript that you intend making a profit from…..thereby later being able to denote yourself as a expert in the field and “leading author” with associated marketing spin offs.
If I am reading it all wrong then I’ll give it a pass thank you, else if you wish to cut a deal – let’s talk.
BUT here is the fine print…..So basically they suck you inI love Banks….they are my greatest ally in building wealth and cashflow streams from my investing endeavours. They are my partners who unequivocally stand by my side and treat me with respect as long as I perform all of the functions explicitly stipulated in the contract that governs our financial relationship.
What I don’t do is not read the fine print, sign the documents anyway and then whinge after the fact that I’ve been sucked in.
The Banks fully expect a more mature financial approach to the contract details than that.
One final comment, there is no such concept as “basically” and “sucked in” in a legal contract, that type of wishy washy language should be reserved for some tall story on a Saturday afternoon BBQ with a few mates. It merely indicates a distinct lack of financial acumen about the subject matter.
How can I find positive cashflow property in WA when even in a small country town housing prices are minimum $100000 only pulling in about $110 rent per week ??I just can’t see how positive cashflow philosophy can work in a climate of very high housing prices with non (or little) increase in the weekly rental income.
Am I missing something ??
No…..you are missing absolutely truckloads….not just “something”.
Got sent a brochure yesterday of a nice tidy unit for sale for $ 140K renting at $ 297 per week. 3 year lease. It is 13km from the Perth CBD. It’s a unit in a strata body with no land content – so we aren’t interested in it at all. Givvus a hoy if you want to take a gander.
18 months on the sidelines…..holy smoke….perhaps you are fossicking around in the wrong chestnut pile ??
Hello chaps.
We managed to snare a good’n a couple of months back. In fact today is his anniversary, he has been in there for 2 months.
During that two months it’s looked like a bit of a construction site – well in fact it is…..he’s completely gutted one of our units, lifted the roof off, replaced the structural components with larger and longer I beams….afixed the roof back on…..fixed up the wonky driveway…..poured about an acre of black bitumen over the ground (looks like a shopping carpark now – fantastic) and has replaced the wonky tiltadoor with a brand spanker.
Secured another unit on site with new doors, new locks, bars and grills to the windows, taken over the security system and replaced the front gate.
Put up surrounding fence to secure his business and painted the whole 5 other units he has access to. He’s had an army of tradesmen and his own workers in there slaving away for the last two months.
He’s spent about $ 50,000.00 so far doing my place up while I’ve been overseas. I fly back into the country tomorrow and have a meeting on site with him so he can give me an update report.
He reckons by email he should have the place fully up and running with another 2 months work and another $ 40,000.00 of reno’s. Aparrently he wants to put up another big shed and then landscape the whole 2 acres to ‘beautify’ the place. My only job is to approve the improvements and give him the official go ahead…..I’m finding it a tough task, but then someone has to do it.
In exchange for doing this, he twisted my arm during the negotiations and agreed to sign up and lease the property for 15 years, with a commencing rent yield of 10.25% rising to about 19%, and on top of that pay for all of $ 11,000 p.a. outgoings on my property.
It was a tough decision of course, but I reluctantly agreed to the terms. We get the property back in 2021, and we’ve agreed he has to leave everything that he installs and upgrades.
During his reno so far, the rent received from him is fully covering the 100% mortgage we have on the place, plus the surplus is paying off the negative shortfall on 3 of our dreadful residential leases.
All up – he’s OK for a rubbish skip collector…..and the discounts on the skip bins we need for further acquisitions are a nice side benefit.
I tried lumping 90K reno’s on my residential tenants, but for some reason they won’t agree…..something about…..what’s in it for me ??
Cheers guys.
What clauses have you introduced that have appealed to vendors and got a deal over the line?We find that no clauses appeal to Vendors. Cash – unconditional is what they are ultimately looking for…..and at the end of the day, just prior to settlement, this is what all contracts end up being, so the quicker you as purchaser can get into that position, the more pleased the vendor will be….and hence more likely to accept your offer. Phaffing about with all of these sneaky little “out clauses” that all the experts teach you in seminars simply p**s the vendors off.
We concentrate on properties with very large land content, so building and white clauses mean little to nothing for us. A soil examination is probably more important.
What’s the best way to approach and deal with real estate agents?Don’t. Go straight to the Vendor. Why Phaff around with someone all dressed up like a two bob watch who rarely knows anything about the property other that the short info sheet the vendor fills out for them….and more importantly has absolutely no legal position in the contract of transaction. To us they are a hinderance to be avoided.
How do you find out the vendor’s circumstances and possible motivations to sell?Find out who they are and then sit down and have a chat with them. Normally the vendors are real people, who have a mouth and can actually talk. If the vendor is a company or trust, have a chat to the CEO or the trustee….they are normally real people too.
Cutting through the blatant lies and “my client’s wishes” of the REA is one of the first tasks to be smashed down on your way to a successful transaction.
Anyway…..that’s how our group approaches things….it’s working OK so far. If you wish to be really really nice to everyone, and don’t want to tread on any toes or upset REA’s, then don’t try any of the above.
Cheers Foundation,
I understood what you wrote and I agree with almost everything you have put forward.
I too share your concerns re: your Max & Pen scenario. I suppose my only point of difference, as we have discussed on several occassions, is the actual vehicle of wealth. Poor ol’ Max & Pen are flogging a dead horse – no doubt about it.
I don’t agree with the “cash in the bank” scenario. The ravages of taxation and inflation I see first hand with what my parents are experiencing right now with that tactic….it ain’t pretty – but they are absolutely scared witless to join forces with our group.
With me working overseas….but not for too much longer, the wife and I have discussed all sorts of difficult scenarios….the worst being me popping my clogs off. In that case, we have decided to wind back our entire portfolio, to be left with only 2 properties, the PPoR and one IP, both would be fully paid off.
That gives the wife and kids a really decent house to live in, in a good area and one IP on a great big chunk of land close to the CBD, producing a decent enough rent that will keep them happy forever…..that’s worst case.
Of course, this scenario is available to us right now, but we choose not to take it, as we see a much brighter future for what we hold now and are intending to buy up soon….it’s not all glum and downhearted.
Everything else is easy peasy from there, including recessions / interest spikes / disablement / market corrections. Small potatoes.
These are all quite minor for our thinking and frame of reference. I suppose the trick is to get out of the mire so you aren’t having to invest in 150K IP’s and end up like “Max and Pen”.
But then, if you aren’t prepared to do the hard yards early on in life…..you ain’t got no choice.
P.S. How are all your oil stocks going ?? [eh]
Originally posted by petelangton:As I was reading Dazzlings post all I could think was…wow, what we have here is a major case of sour grapes. Good on you Fishman, it’s clear you have many options at your disposal. Despite Dazzlings jealous, jaded view that you are extravagant and headed for disaster because you have a high income and children at expensive private schools, I think you’ll do very well.
Also Dazzling, you talk about ways to create wealth in your posts, so I wouldn’t be recommending removing children from private school education. Statistically the majority of university places are won by private school students, and statistically, tertiary education means a higher income – with which to put towards property investment.
There’s also no nobility in living like a monk, and with a good income you can have a decent, reasonable living standard and still invest. And what’s with the obsession about female friends and family constantly sitting in judgement, people trying to look wealthy, and the assumption of flashy cars and gadgetry in fishmans situation…talk about an obvious complex.
Excellent work petelangton, [blink]
Fishman was in a bit of a quandry and asking for opinions on his situation….in fact he asked at least 4 or 5 direct questions. If you have a read back over what you wrote – you addressed none of his questions.
I’m thick skinned enough that anything written is water off a duck’s back. My view and opinions are very warped indeed…compared with the average investor, and probably don’t sit well with the majority of investors…..but then I don’t want to be like the majority of investors.
My post is there to freely tear to shreds and smash to pieces if you so wish, but I fail to see how that helps answer Fishman’s direct questions.
Instead of concentrating on my post, which was quite directly pointed to Fishman….howzabout help Fishman out and directly answer some of Fishman’s questions with your weight of knowledge and experience….I’m sure he’ll thank you….
Good to see you back F.
Can you turn your razor sharp analysis spotlight on your good debt comment a bit more. It has definite merit.
Our group is very much accumulating this type of debt….sometimes I need to stand on tippy toes just to see the ground floor.
If you believe our strategy is no good, I’d like to hear your alternate strategy.
Once again – great to see you back.
