Forum Replies Created
Craig,
All options to get your hands on 30K is going to cost you money. Sit down and calculate what method gives the lowest value.
Then on a bigger level you need to assess if getting the 30K was worth it and whether it was good value or not.
Is the 30K going to be generating you profits, if not, obviously you cannot calculate the value…dividing by zero doesn’t work. But then, if this is the case and you need it regardless, it doesn’t matter which method…
Cheers,
Dazzling
“Go hard or go home”
Kenle,
“wanting to plan on retirement in 4 year”
I’m confused…does that mean you are going to start your planning in 4 years or are you going to actually retire in 4 years.
If the latter, could you send me a copy of the plan – it must be an absolute cracker…
Cheers,
Dazzling
“Go hard or go home”
Gamay,
Just closed a deal that didn’t involve the agent in the end.
Initially wrote up the offer, on the agent’s proforma (don’t let the agent write it up, make sure you write up your offer !!!) and stapled a 10K cheque to the contract for the deposit. The agent thought it was great that he didn’t have to write anything. I thought it was great as I could actually read the contract and nothing slipped in there that I didn’t want. Forget verbals.
Three days later, heard nothing from the agent. Due to both the Seller and I having travel commitments – and the agent being in hospital with a sore back….I called the Seller direct and had a chat.
We both quickly realised we were both big enough and ugly enough to actually talk / discuss / negotitate and arrive at a deal.
The contract was signed and faxed between both parties within the hour.
When the Seller’s agent got out of hospital 2 days later we let him know the deal was done.
He mentioned it was the easiest $ 56K he’d ever earnt. I mentioned that it reaffirmed my strong belief that agents are a waste of space when you have a competent Seller and Buyer. I also mentioned I was glad his commission was being paid by the Seller, and hadn’t contributed to it by paying an inflated purchase price.
Best part of the deal – other than knocking 130K off the asking price, is that the Seller has agreed to be a Mentor for us during our next growing phase – developing industrial props…this is worth Boocoo to us, and all possible because I by-passed the agent.
Sometimes great opportunities appear out of some aspect that you’d never expect.
Cheers,
Dazzling
“Go hard or go home”
Mike,
“Looked at” – “feel”….
If this is solid rental market research and you know the position well, obviously the correct action is to ;
just get to the point and send a letter
If you don’t know the market well, and haven’t conducted the proper DD, and you take the above action you will reap what you have sown.
From my experience with the UK rental market – it is totally different to the Ozzy res. market. Landlords in the UK (as a generality) have it far better than Ozzy res. landlords with demand…not sure Ozzy experience is too relevant.
Cheers,
Dazzling
“Go hard or go home”
Mitsinka,
If you believe the behaviour described by Simon is the root cause of the accumulation of the non productive debt, and yet your partner refuses to admit there is a problem…you are indeed in a quandry.
I’d suggest forget about consolidating, and do the following;
1. Find a quite moment with your partner
2. Take the phone off the hook
3. Make your partner a cup of tea
4. Sit down with a pen, paper and a calculator
5. Agree on actions that sole the root cause of the non-productive spendingIf you can’t get past step 5, consolidation is useless at best and headed for worse things if the behaviour continues.
Of course, if your partner doesn’t drink tea, you won’t even make it to step 4 !! [biggrin]
Cheers,
Dazzling
“Go hard or go home”
The term “triple bypass rectal surgery with the rough end of a pineapple” comes to mind.[blink]
Like most things in life, one can purchase insurance to cover against such events, but believe insurance only applies to advisers costs – not penalties and back payments.
Keep good records, be conservative in your approach and be roughly guided by your accountant.
The ones getting audited are the taxpayers that don’t fit the ATO “bell curves”…i.e. don’t be extraordinary, outside the 2 sigma range in which they analyse data.
Cheers,
Dazzling
“Go hard or go home”
Hihopes,
This has happened twice to me before. I solved the problem by taking immediate action. My suggestion is do not sit there waiting for your PM to “promise you the world and deliver squat”.
This is what happened the first time…
Bought house from agent who told me it was a wonderful family home which would rent for max of $ 420 p.w. At settlement when I pushed them harder they said the market had changed slightly and I wouldn’t be able to command any more than $ 400 p.w., but more realistically $ 380 p.w. Talk about conditioning me down !!!
Decided to leave them with the downward spiralling promises and advertised the place myself for $ 450 p.w. Placed one ad which cost $ 16. Went to a great extent and spent 4 hours in the morning sweeping up the front yard and inside…didn’t spend anything except sweat. Five couples came through in the hour it was opened, and that afternoon signed up a Shell ex-pat engineer for 2 years, starting at $ 450 p.w. with an escalation clause in there at CPI or 3%, whichever was greater, for the 2nd year. I grew in confidence that day in negotiating with people and my estimation of PM’s went through the floor somewhat.
Second time around….
Bought a small but tidy 3×1. Agent’s PM said they would love to manage the place during the settlement. They issued a written quote that the prop. would command $ 230 – 250 p.w. We were unsure of the figure, but calculated what we would get after all their deductions…worked out at $ 207 p.w. – not happy….Fell back on my intuition and experience.
Advertised the place the next Saturday (cost another $ 16…not happy) for $ 380 p.w. and signed up a tenant for 12 months on $ 350 p.w. PM found out about it when she called to ask if we wanted to sign up…she commented that “Oh, you’ve done OK I suppose”.
Makes my blood boil every time I read their brochures where they extol the virtues of only by using a professional PM can you maximise the return of your IP…poppycock I say !!!
As I’ve posted before, there is only person who is really interested in your IP – you.
Bottom line….take control of your situation – you’re in charge, not them. Don’t meekly sit by wringing your hands in frustration that they have not rented it out yet.
Go get ’em tiger.
Cheers,
Dazzling
“Go hard or go home”
Redhaven,
You also seem to require $ 80 K p.a…just like Lady24 ?? What is it about 80 K p.a….must be the new 2005 lifestyle cost level ??
Have a chat to Lady 24…or see earlier thread from last week…perhaps there is an easier way to acquire a clear $ 80 K p.a. than flogging yourself to death with dusty and dirty reno’s ??
But then if you have your heart set on it and can see a clear way forward – good luck with your endeavours…
Cheers,
Dazzling
“Go hard or go home”
C@34,
Great thread….here’s my contribution ;
Q: When does a person decide to become an engineer?
A: When he realizes he doesn’t have the charisma to be an undertaker.Q: What do engineers use for birth control?
A: Their personalities.Q: How can you tell an extroverted engineer?
A: When he talks to you, he looks at your shoes instead of his own.Q: Why did the engineers cross the road?
A: Because they looked in the file and that’s what they did last year.Q: How do you drive an engineer completely insane?
A: Tie him in a chair, stand in front of him, and fold up a road map the wrong way.Traits of an engineer include, but clearly are not limited to:
* You take a cruise, so you can go on a personal tour of the engine room.
* In college, you thought Spring Break was metal fatigue failure.
* The salespeople at the local computer store can’t answer any of your questions.
* At an air show, you know how fast the skydivers are falling.
* You can quote scenes from any Monte Python movie.
* You can type 70 words per minute,but you can’t read your own handwriting.
* You comment to your wife that her straight hair is nice and parallel.
* You sit backwards on Disney rides, so you can see how they do the special effects.
* You have saved every power cord from all your broken appliances.
* You have more friends on the Internet than in real life.
* You know what <http://> stands for.
* You look forward to Christmas, so you can put together the kids’ toys.
* You see a good design, and have to change it.
* You spent more on your calculator than you did on your wedding ring.
* You still own a slide rule and know how to use it.
* You think that people yawning around you are sleep deprived.
* You window shop at Radio Shack.
* Your laptop computer cost more than your car.
* You’ve already calculated how much you make per second.
* You’ve tried to repair a $5 radio.Cheers,
Dazzling
“Go hard or go home”
Marc1,
This may seem harsh but I’d say both, and go one further and add bad investment to the mix !!
Stories like this simply strengthen our resolve to stay away from RIP’s, where you are constantly having to endure and economically be forced to wade into the very messy quagmire of other people’s private lives. We consider OPPL’s (bad thing) to be at the other end of the spectrum of OPM (good thing).
This is simply one of the risks coming to fruition of investing in RIP’s and in an area out of your immediate control. As your daughter has found out, there is only person who is interested in her financial affairs – her, and fortunately gor her you as well…onya, you’re a good Dad.
PM’s in situations like this are next to useless – all too hard and not enough money to be bothered with. At the end of the day all they can do is write letters and make phone calls. When dealing with recalcitrant tenants who don’t respond they are next to useless.
As for the absolute ridiculous res. tenancy laws…forget it…as your daughter is finding out, it’s a complete farce and heavily stacked against the proprietor.
As our group has discovered, the best and only time and cost free solution to dealing with headaches like this…and the root cause of the headache in the first place…is not to buy these type of investments…
Cheers,
Dazzling
“Go hard or go home”
Tip 1 : Chat to as many older people as you can about their property experiences. Try and find one with a decent memory for figures…
Tip 2 : Try and learn as much from people who are a little further down the investing track than what you are right now. Someone miles in front is probably of little value to you as their techniques will be different.
Tip 3 : Get a cosy relationship happening with your banker – they will end up being your closest partner in the property investing game.
Tip 4 : Never miss a payment to your Lender.
Tip 5 : Try and buy deals where the land component is greater than 85% of the total property value – hard to get +CF with this scenario but not impossible.
Tip 6 : Configure your ownership structure to protect your ever growing asset base.
Tip 7 : Don’t lose sight of your most valuable assets – your immediate family members.
Tip 8 : Be good to your Mum !!!
Cheers,
Dazzling
“Go hard or go home”
A) By definition w.r.t your intent you have failed.
Q) If you were forced to give up either all of your property assets or all of your property knowledge, which do you think you would be able to acquire back more swiftly ??
Cheers,
Dazzling
“Go hard or go home”
Debtdogg,
Checkout Mr Raams’ offer in ratherBfishin’s thread, he offers short term finance on extremely attractive terms as long as you don’t value your legs too highly….LOL
Cheers,
Dazzling
“Go hard or go home”
The above comments from Baloo / aussierogue and Don & Liz all confirm our research over the past 2 years and underpin our fundamental change in property investing philosophy.
Unlike Landlords who consider the “operation” just business, residential tenants take the rent issue very personally and will go to great lengths to avoid having to pay an extra $ 10 p.w. We always found that amazing, especially considering when you were cleaning up after them and the high cost rubbish that was discarded around the property (like bottles of wine, pizza cartons, cartons of beer, bottles of Jim Beam etc), which were all very readily affordable, but heaven forbid a $ 10 p.w. increase….couldn’t possibly afford it and will immediately move out.
Dealing with businesses and govts as tenants, they approach the issue with the same business focus as the Lessor does…and obviously running back to Mummy and Daddy or downgrading to a little unit aren’t options for these guys. The large business interruptions (locating a suitable alternative / changing stationery / informing clients of new premises / impact on staff travelling times and parking etc) all become hurdles that aid the retention of tenants in the favour of the Lessor, despite constant ratcheting up of the nett rent every year…
Good luck residential Landlords having to deal with flighty tenants…you’re fighting a losing battle. Residential PM’s would love it though with the recurring letting fees, bit of a boost from their perspective…no help from that quarter either.
Oh, and we don’t clean up wine bottles / pizza cartons anymore either. Property investing has become far more pleasant, and as a side issue far more profitable.
Cheers,
Dazzling
“Go hard or go home”
Stuey,
I suppose because they constantly let me know what they can do…however they don’t seem to be able to compete with my banker.
Terryw very kindly answered an enquiry this morning, and he admitted his best rate was at least 0.5% higher than what I just locked in….I don’t know your industry as well as you guys, but it appears brokers aren’t the be all end all of obtaining the best finance ??
Who knows ??
Cheers,
Dazzling
“Go hard or go home”
Jason,
Yep, my Lender takes Settlement price or Valuer’s latest price – whichever is the lower…sneaking up the equity levels makes great seminar material but in reality the Lenders aren’t that stupid…it’d be their extra money being put at risk and they aren’t into that…
In terms of attending seminars – never been to one myself…perhaps I’m missing out on something really good – dunno. Maybe a jar of motivation and some contacts from fellow seminees (sounds kinda rude doesn’t it ??) is what it’s really about…
What I do know is that the group of elderly gentlemen I’ve met recently who’ve been developing CIP’s and IIP’s for donkeys and are now heavily loaded have never been to a seminar in their life and wouldn’t give the time of day to the “upstart young” presenters as they call them.
Each to his own though….motivation is a powerful driving force linked to a well marked out plan…maybe that is where the seminars real strength lies, in providing that little boost needed, with the actual specific content not that relevant ??
I’ve found sitting down face to face with these elderly gentlemen over a cup of tea far more enlightening than any advertised slick presenter. To me it makes sense that if you are making buckets of cash doing developments, you couldn’t afford the time to tell other wannabe’s how to do it, regardless of the seminar cost…unless ego and other cross endorsement products start to come into play…now I’m getting a tad cynical.
Do you reckon there is likely to be a little “Stevie” doll on the market soon ??
Cheers,
Dazzling
“Go hard or go home”
Lady24,
From my perspective I’d avoid buying 50 houses like the plague. Too many hassles and costs for you and your husband. If your end goal, as stated, is to receive $ 80K p.a. (I’m assuming in todays dollars). I’d be heading for only one property – not 50. Try this;
Commercial property;
Purchase price $ 900 K
Deposit $ 270 K (in res equity – which you have)
Loan (100% + SD) $ 990 K
Nett yield 9% (not unreasonable, there is better)
Tenant pays all outgoings
Nett rent after all property costs $ 81 K p.a.Cost of loan at 7.2% = $ 71 K p.a. (Fix for 10 yrs)
You have $ 10 K p.a. free cashflow out of the place in year 1, escalating every year, without arguing with tenants).
Get a reputable white collar tenant signed up for 10 years or so and sit back. You then have 18 years to pay back the loan (prop would contribute from free cashflow about 262 of this).***
*** With a 4% escalation clause in the lease the 81 K p.a. nett rent would escalate to 115 K p.a. in the tenth year.
This way, you and your husband can enjoy the horses without going mad looking after 50 houses – couldn’t think of anything worse.
Cheers,
Dazzling
“Go hard or go home”
Cheers Jenny,
I’m sorry I can’t afford an opinion on finance brokers as I have only used one once in my life, over ten years ago now, and didn’t have a very good experience.
Vowed never to use one again and since then things have looked on the up and up.
I’ve discovered through a good relationship with my banker that the rates now offered to me are better than what any broker anywhere in the country can deliver…
Now I’ve really thrown down the gauntlet to the MB’s on the forum…watch for the replies !!!
Good luck – it seems you are on the right track with your investments anyway. You must have a good sister to help you clean your IP’s, or is she partners in it with you ??
Cheers,
Dazzling
“Go hard or go home”
TurboB,
As mentioned in a previous but similar thread, I wouldn’t touch boarding houses and / or student accomodation with a barge pole.
Far greater opportunities out there.
Hope everything goes well for you if you do proceed however.
Padma…how much value do you place on your and your husbands time ?? I factored a lowly $ 20 / hour into my calculations…this quickly brought my fairy tale “Student Landlord” days to an end.
Cheers,
Dazzling
“Go hard or go home”
Jenny1,
A commercial laundry just sold near me for $200K, only difference was it was renting at $ 400 per week and the tenant paid all the outgoings.
My advice would of been to dump what you were looking at and chase the far better deals on offer…I was going to suggest the broker did you a favour by stalling your application…but…
Good luck with your buy..
Cheers,
Dazzling
“Go hard or go home”
