Forum Replies Created
Interesting question, I think developers have high risk and therefore have high profit margins.
I am sticking to developing my suburban backyards, so I know roughly my profits, risk and my choices are high in terms of keeping the backyard land and building, selling the land or keeping the backyard and selling the fronthouose or keeping the lot.We have 6 IP’s now and get a call by the manager re something or other at least fortnightly and repairs and waterbills +++.
We do a lot of maintenance and minor repair work ourselves to try and keep costs down.
You also have to be reasonably ok dealing with tenants.
It gets more difficult the more you have and sometimes you loose oversight a bit.
The r/managers pay a lot of the bills and the water now goes by direct debit.
Everything goes via my home equity account.
I have the Quickbooks software, which I have set up with all the loans, assetts, income and expenses.
I have found it excellent as a book-keeping means.
I do at least some book keeping every night.
If not I surf the web and look at sites such as this and also do a bit of index trading.
I am no longer working full-time and see as my second job doing all the accounts, book keeping and managing the investments.
I have tried a book keeper but worry too much that things arent done correctly.
I agree, you start to reach a stage were your limits and ability to handle such a large number of properties is affected.
Cash flow starts to be an issue, since a lot of the properties are cash flow neg, but by subdivision, hoping to get instant cash and capital gains (Well within a year or two anyway).
My accountant has everything categorised and then puts it all together, this is also starting to be a huge task and cost.
ReginaKeep investigating, you never know, please keep us informed it sounds quite fascinating.
It sometimes makes you wonder how people can just leave such an assett standing vacant/unfinished for so long.
Money out the window.
ReginaYes, we went to the seminar and brought his index trading package.
I changed my mind and asked for my money back several days later.
He refused, saying that I could only ask for my money back at the end of the seminar.
However, I now understand, that the promoter, breakfree events, does offer a money back 30 day guarantee, so I am still waiting for the refund.
My reasons for returning the product: I am trading actively already and do Index trading based on another software and using volatilty charts with my sister.The JC trading system did not offer me added benefits.
Trading only Two Indexes for my purposes is too restrictive.
The software would be appropriate for the novice trader as it seems to have a high degree of risk aversion and JC does offer a lot of prompt support via his web page to your questions.Nouveau Riche is an american company owned by a smiley, caring sharing touchy feely husband and wife team.
(who of course are so concerned for our well being, they want to help make us rich).
Now, I think, the gist of it is, you become a distributor for all of dolf De Rosses products, which are actually not too bad.
You sell the package to investors at a cost of only $3000 odd dollars and keep 60% of the profits.
You also try and get others to become involved and distribute.
Now, I believe our Nouv.Riche couple are at the top of the tree and are the distributors and passive collectors of a cut in all this, and Dolf I guess, gets some royalties.
Now of course, this is not a pyramid scheme, scam or anything amwayish!
It is a genuine attempt to help us all become rich!
What does remain puzzling to me, how one can be naive enough to sell a product for just on $3000, when his books, similar software and investment info can be obtained over the net, in bookshops, etc at a fraction of this cost.If you preceive Steve’s strategies, book, seminar etc to be a “scam”, why even bother commenting.
He is at least offering us all the opportunity to learn, inform ourselves and come to our own conclusion.
I do not believe he is in any way overpiced unethical or unrealistc in his seminars or education advice.
I strongly believe we stick to properties that suit most of the the population, eg. your average person’s affordability and location with good infra structure. This does exclude most inner suburban homes, high priced units and inner city apartments.
There still are some high growth areas around with good rental yield.
Its like anything else, learn by others, quality seminars, books and good and bad experiences shared in this forum.
If you learn a proefession or trade, its no different, you have to outlay money, patience and find good teachers and resources in order to learn.
I am not quite sure where the “scam” is, is it a case of “tall poppy syndrome”?
I have outlayed thousands of dollars to become investment wise and now have a very sound base to create wealth. I have come across definite “scams” as well, and downright dangerous (investment) information.
If what Steve is offering does not suit you, it does not automatically become a “scam”, we all have different approaches and opinions, at least we are hearing some options.Congratulations, for an accountant you are sensational and inspiring.
Just one thought, what you wrote towards the end should be at the top? Straight away you get a summary of what its about.
But, book publishers have editors and now doubt, they will do their bit.
ReginaHe certainly charges a hellof alot of money for his seminars.
I also found the constant references to rich dad/poor dad unsettling in my reading, a lot of repetition and thinking to myself, when is this man going to drop the “rich dad/poor dad” line and just get to the point.
Apart from that, if he has motivated people to get out there and do something, well great.
I do object to him not acknowledging education as valuable, research has shown that an education of the tertiary variety does indeed contribute to personal wealth creation.Check all outgoings and maintenance very carefully, they tend to be quite high, especially if a lot of common area and because ret.units always have to offer a lot and look good., how liquid is it if you want to at any stage resell?
Just sharing my experience from about 3 years ago, when we didn’t know better.
We brought a townhouse and 2 apartments of the plan, and didn’t fully realise that this builder would be charging us progress payments.
The upshot was, a lot of financial stress, meeting progress payments on our income with no rental income for quite a few months.
We ended up selling the townhouse, minimal profit and many months later, having had them rented first, the apartments at a good profit.
If you are now building two units, and struggling with the mortgage payments, you should consider selling at least one off the plan.
I certainly slept better, having reduced the financial burden.
We do wish to build another townhouse on our own dual occ. block but are getting some rent from the existing house and plan to sell another subdivided block of land outright, before building to improve cash flow.
I don’t think a cash flow positive property will necessarily make it any easier.
I don’t want to be in such a tight situation again. Ultimately, you want to be able to sleep at night.I had got archicentre involved (never again), similar issues, he didn’t pick up termite damaged floor boards and a few other things, cost $3000 to fix and extra time. I wrote numeroue letters etc about it and basically got told to P>o., they are not responsible for termite or pest inspections, I should have got pest control.
I did point out that this was old damage and been picked up by any one but blind freddy if he had looked properly under the house.
We now do our own inspections and you can do local TAFe courses to ckeck for this sort of thing.
I am not sure what you mean by sinking into the ground, is it weatherboard, it may be just stumps or is it on soft ground.
If the brickwork is cracked and windows moving, it means possible underpinning needed, big expense.
Maybe get another building inspection, if it is a serious fault, can you sue the first inspector?
I don’t know about the legal implications and pulling out of the contract, if the house has serious faults, this may end up the cheaper optionHi Matt,
We usually put in 20% of deposit and we have to act as garantors for the company.
The properties are cashflow negative/neutral and positive. Some we have brought for subdivision and build another house in the backyard(capital gain)
Some we brought because they pay for themselves and maybe one of the other properties.
The company manages each trust, most of the properties have their own trust. The trust is for assett protection and as I understand, no landtax liability that way.
4. Assett protection, very hard to get at more then one assett (if each in a separate trust), eg if the tenant sues you for tripping over the carpet. Advice by a good solicitor, who is very much an investor/multiple property owner himself.
Cost per trust $500, set up company approx. $1200. Once everything is in place, I keep the books on my quicken software, like any other property. My accountant will the work out the tax issues.
I hope this helps.
ReginaGood on you, and its happening more and more.
I keep excellent records via Quicken software, my accountant neatens it up and because its very simple, the audit doesn’t cost that much.
When we didn’t have good software, the compliance was a nightmare, I have learnt how to keep records now with everything and seing my accountant is no longer an ordeal.
What’s more, you are totally in control, if you stuff up, you are responsible, I have to acknowledge, I didn’t know what I was doing to start with.
I also have a problem with the fees charged by funds and advisers.I’ve been to two or three, they mostly flog their own products, you pay managed fund entry fees to them and a usually hidden trailing commission. If you want to invest into a managed fund, there is so much info on their performance now, you can select yourself.
It is virtually impossible to get a big picture idea and how to link everything together, tax structures ,protection etc. A planner doesn’t know or if they do they will charge, I was quoted 7500 in my case. I’ve worked it out myself now, talking to a solicitor, accountant and doing my research and reading. It has taken me years and many mistakes to reach this point, but slowly its coming together. Unfortunately we never had a mentor, nor the plethora of info that’s available now.You definitely cannot borrow in your super fund, that is one reason they are so slow to grow, no leverage.
I have brought 2 carparks in StKilda, paid cash and because they are on a commercial lease, no outgoings payable, I get a net monthly return of 7% wich increases by 3% annually. No problems at all, I don’t have to monitor it like shares or worry about repairs, my income appears in the account every month.
The other option I am now looking at, is listed property trusts invested in blue chip properties, again this should be hassle free and can be done with small sums.
I have formed an investment company, this is allowed to gear, each property has its own trust.
It is separate from super.
Super has a lot of conditions attached you have to be aware of what can and can’t be done in super. The management fees are another issue and the surcharge I am liable for.
I do not see my super as being anywhere near enough to fund my retirement.
I have been putting into super for many years now.interesting reading, because I think the big guys always win. If they are already extremely wealthy by their books, seminars,investments why try and get us, to invest with them. What is their agenda?
We just attended a breafree event, trying to convince us to start a “business” via an american company “noueavou riche”, to flog tapes, books etc at $3500 per package and earn a huge commission out of it etc etc. It sounded to us very “ammway” like. I am also left wondering why Dolf De Roos would bother endorsing this, given that he has already produced great books etc.
In addition, his books, investment materials and software can be brought virtually anywhere at the fraction of the above cost.
I was left wondering also about the legal implications in all this. Needless to say, the nouv.riche owners(I think the name says it all), are a smiley couple, she of course,blonde and attractive, already very successful and wealthy.
Of course we were reassured, that they have the interest of us ordinary investors (or as they say in Australia mums and dads) at heart, and would really like to contribute to our financial wellbeing. It was just so altruistic, it was incredible. Unfortunately our sceptical mind decided otherwise and we walked out.
I think this forum, a few books, much cheaper and ethical seminars remain the best form of education.
Finally don’t expect to get rich overnight and as mentioned, due diligence all the way.The issue really to all this is, that the vast majority of properties ARE NOT cash flow positive, unless you have a considerable amount of your money sitting in the assett.
The above are just that: salespeople, they have only one selling point and that’s the tax savings.
I would, at this stage not even bother with any form of interaction, total waste of time and since I am getting older, my time is becoming more and more precious.
These people are trained to sell something, doesn’t matter what, hence they cannot give you any answers, other then that for which they are trained. Ignore the cold callers of any sort and any of the glossy brochures or emails that flutter into you home.
ReginaLittle things can and will go wrong, eg hot water systems, locks.
when we have brought, we have usually done a thorough check, repair, major clean up and gardening, pruning, rubbish removal, mulching,curtains etc. We paint every thing.
Depending on the house, it has cost us anything from $3000 to $25,000(a renov.job).
The house then is very presentable and usually rents fairly quickly.
We know everything is done and should be fine for a long time. Minor repairs can come up, this can happen with any property.
ReginaAgree with all the comments. A tenant who pays their rent on time and keeps your assett in good order is a blessing.
I’ve just had to evict non-paying untidy tenants and it is a relief to see them gone.
The relationship works both ways. We happen to take a lot og pride in our property assetts and try to present them neatly, very clean and well maintained.
Although we have not yet got around to providing little gifts or cards, we are willing to allow pets, provide any extra above the usual maintenance issues and do some garden maintenance.
There are many, many people in society who will never be able to afford their own home, they will often be your best tenants and I think they do deserve some respect and reasonable accommodation, if they do the right thing by you.
They will also be there for the long term.
One of my tenants, from whom I collect the rent on a monthly basis, usually rings me when the rent is due.I agree, all these seminars sound fantastic, been there done that.
Have left a bit of money behind.
I am now seminar “weary”, I try not to spend my hard earned money that way anymore. I think I know enough to move on,there is only so much you can learn about property.
Regina
