Forum Replies Created
I agree with Monopoly!
Although this woman was shown the proeprties on a Sunday, she could of always rang up an agent on Monday.
Saying that though, look at how small the profit contingent is:
“30 properties in the area for an average of $20,772 and sold them for an average of $48,433.”
That would of been ALOT of work for not alot of money! They probably should of rented them out instead!Rgds.
Lucifer_au“I did say “I believe!”.
-I believe the world is round, but I need to have facts to back it up otherwise it’s a irrelvant comment.Otherwise I stand by my comments.
Rgds.
Lucifer_auI have decided to do a similar thing to Felicity, and hopefully you can gain a some more understanding…
Also it makes me understand the process better (and we can’t let Felicity have all the fun!).“Is it ethical?”
-Are payday loan operators who charge up to 500% per yr ethical? Some would say yes, because the people might really need the money for medical emergancy… In really, it really depends on what you see as ethical…
Believe it or not we actually make less of a % mark up on interest than the banks (so we borrow at 7% and charge 8.5%, banks borrow at 5.2%).“If you wanted to help them wouldn’t you advance them a deposit or at least charge only a nominal amount above what the bank charges you in interest?”
-We ask for a much less deposit than they would have to pay (and most can’t even get a loan so any deposit would be useless). As I said before Banks traditional made a higher mark up on the interest rate than we have.
“Why do Wraps typically involve selling a home above market value and then charging an interest rate above market? If it is ethical why not charge either the inflated purchase price, or the inflated interest rate instead of both?”
-We are selling an appreciating asset – the new owners get to keep all the CG, we get none. If another business provided you finance on an appreciating asset, they would do the same.
“Why can’t ‘the battlers’ get a loan in the first place? with 100% financing and non conforming lenders it is pretty hard Not to get a loan in Australia these days. If they are at such a risk of default that the bank wouldn’t lend them money why would you take them on as a debtor?”
-Banks still have a restrictive lending policy, and many people who could easily qualify on income can’t because of the deposit (this is a common factor in Sydney). Also some people have not been in Australia ‘long enough’ (although they are full Aust. citizens), another reason is some people just hate banks and refuse to have anything to do with them..
Also most people can get 100% financing, only those who own other property…“How long do you expect the people to stay? Is there a contingency plan for when ‘battling families’ decide to move elsewhere?”
-We hold property up to 5yr before we basically tell them to refinance, of course they can (and do cash us out a long time before that).
“Do you really feel like you own an asset, when you generate cash but no capital growth?”
-If it puts money into my pocket it’s an asset! I think it is wrong thinking to base major decisions on CG, because what happens if those CGs don’t turn out to be a reality???..
“Would you live in ‘wrapped’ house?”
Yeah, I would. There is nothing like owning your own house and making it what you want (rather than a landlord, etc).
Rgds.
Lucifer_au“I still believe the majority are unethical.”
-Do you have any proof???? How many do you beleive are unethical? 20%, 40%…. How many???
And how are they unethical????“Even if they were regulated, I still think it is not the most ethical thing to make money off the poorer members of society by charging them inflated prices and higher interest rates.”
– I have recently wrapped a house to quite a wealthy (income wise) couple, they have the income, they just seem not to be able to save (esp. after a wedding), so just like Harvey Norman or Bing Lee, I offer finance. The only difference is I charge a higher price for the house, because unlike Bing Lee or Harvey Norman I actually sell assets that increase in value – if Harvbey Norman sold assets that increased with value on finace, do you think they would charge a higher price for the item??? Of course they would.
“I don’t see charging someone more for a non-deductible debt as doing them any favours. I would like to see wraps restricted to investment properties until such time as the buyer can afford to refinance the property into a normal loan if they want to live in it.”
– Ummm, all debt is non-deductible on a PPOR….
In regards to restricting weaps to investment properties…
So what your saying is that a person whom can’t afford to get a deposit together gets a wrap and rents it out – So in effect they are negative gearing the property and not only that they have to pay rent to live in a rental house… which they can be kicked out of (might take 3 months, but they can be kicked out).So lets run the figures…
Wrappe $60K income, $300 in rent, $100 in negative gearing per week… So they make lets say $700 and then they have to pay over $400 a week in repayments and negative gearing???
Also what happens if the renter move out, now they have to pay $500?-$600??…Are XXX X XXXXX???? These people want to live in the house. If they wanted to run a rental business, they would of rented out a house already… But they dont – they want to live in there own house and not pay dead rental money…
Also what happens when the wrappes don’t pay – we kick out the tennants? But they have a contract, so it comes down to who has the deepest pockets in court…. So in the end we win at massive cost to the wrappe, renter and in the end we will charge a higher price (interest rate and backend)….
Thankgod you don’t make the rules….Rgds.
Lucifer_auI’ve booked – it should be very interesting!
And TerryW is right! – With 20 people there will probably be zero profit at all (with the free book and all). Also we have the option of going out for a meal afterwards too, so I’ll be going to that too (i’s pay your own way).
See you there Terryw & anyone else whos going…
Also I’m not organising it or anything like that – just going. Cheers.
Rgds.
Lucifer_auAs MA said, it shouldn’t be too much trouble at all.
Go here for more info:
http://moneymanager.smh.com.au/tools/calculators/borrowingpower.htmlRgds.
Lucifer_au“Have a credit card from the offset account there for those trinkets you need here from time to time.”
The ATO is targeting this type of setup (on about 150 individuals)…. Just letting you know….
Rgds.
Lucifer_auAhhh’… My complete apologies… It’s just too easy to press reply and not double check!…. A 107 thousand apologies!! (I have tripled checked this reply!).
Rgds.
Lcifer_auI don’t know the details of how Melbear got a large loss, but here are a few thoughts…
1) Deprication amounting to many $$$; esp. if the place is new;
2) Neg. Gearing to a degree;
3) Give a large % of income away is loans (pls note you need an excellent tax advisor for this, and I have diliberitly left this point vague).
4) He has massive legally deductable expenses and uses loans on his IP/PPOR to pay for this.Am I getting warm Melbear???
Rgds.
Lucifer_auPM sent – Also I suggest you keep the details of this property hidden… You never know!!!
Rgds.
Lucifer_auRight now Duboo has 38 RE agents, and the most expensive house I saw on my last trip was $500K on an almost normal block of land!
Have a look, but let the market run it’s course (as it will either fall or move sideways) a bit before you buy.
But do as Kay suggsts check it out for yourself.
Rgds.
Lucifer_auKay Henery – for you:
http://www.stats.govt.nz/domino/external/web/prod_serv.nsf/092edeb76ed5aa6bcc256afe0081d84e/489b72160cc0c3dbcc256b2500098a3d?OpenDocumentThats a long link!! Google.co.nz is your friend.
Anyway I’m glad Neil Jenmman provided some sort of wake up call and that it’s not peaches and cream (CGT and Aust. citizens for example. I kind of worried me thouh when I saw that RE agent giving out advice!).
Rgds.
Lucifer_auhttps://www.propertyinvesting.com/forum/topic/8278.html?SearchTerms=ALP
Been done, but good time for renewal with an election soonish!Anyway heres my post on this matter:
===
Labour governments tend to have big social agendas that require large expenditure, which in turn means increase in taxes. An because the unions want to be seen doing something for their members this means this tax burden tends to be shifted on to entrepreneurs, business owners and investors (the people who create the jobs in the first place… but anyway along with the real debate – what will this mean to us!).I think I could confidentially say that a Labour Gov wouldn’t change current structures fundamentally. Saying that things like taxation would probably change, perhaps trusts wouldn’t get the 50% CGT discount, certain trust loopholes would be changed/closed (when Latham promises no CGT changes, he means for the everyday worker not us investors – it’s called politicians speak), perhaps larger payroll taxes.
He won’t have a lot of room to move however as many dollar commitments the Howard Gov have made is through contracts and these can’t be torn up (thanks to the courts!).
As for his $5 billion in government waste that would be used to fund some of its spending commitments, I think that is very much up in the air, and I know it won’t be used to reduce public service numbers, etc
He states that taxes won’t rise more than GDP, but that is assuming that there is still high growth rates… what if there isn’t????
All politicians lie, it’s kind of like a get out of jail card…. Saying that I would prefer a Howard Gov because I know nothing much is going to change for the entrepreneurs, business owners and investors. In fact I feel there is a higher chance our interests will be protected. With the Labour I don’t see any words to suggest Latham will protect us. Better to go with the Devil you know.
Anything Labour puts up we will get around, but it will increase costs and hassels along the way (and in the end they will just put up hidden taxes which cna be either passed on to the rent or worker, somehow).
As for Negative gearing being outlawed – I don’t think it will happen for quite a while, mainly because the state Gov’s are now relying on stamp duty more and more. Either the Federal Gov will have to increase there contriutions to the States or raise GST (which will mean increases to the States), I don’t beleive either will happen. When negative gearing does disappear – I will be prepared to jump on some fantastic deals!!!
===Everything seems not to of changed… Theres a massve surprise.
L0L @ Sizzle: “Crean’s the treasurer right? I think that answers everything.”
Rgds.
Lucifer_auMr McKnight what is your ‘multiplication by division’ strategy??
Oh and as a warning I’m not great with numbers, so go easy on me! (at least property dosen’t have any massivly difficult formulas like trading does!).
O’h and I’ll be trying to buy 1 per month, which while not a huge amount, isn’t too shaby. I’m already up to 6 for this year.
Rgds.
Lucifer_auAArrghhh!!
Rgds.
Lucifer_auYeah – I saw the new holden ute as well (and the other car), and they still lived in a nice house (which the bank did not take away from them).
This was my favourite line:
“It’s like oh yeah just get a home equity loan, just borrow against the house, oh wow we can get $50,000 let’s go buy a new car, get a new TV,” Lee said.
>Wow, and of cours the bank gave you the money for free! WoW!“Our main goal was to have one or two properties for each of the kids and then one or two for us to try and get ourselves financially secured so when we did hit retirement we’re not living on the property line.”
Without the savings to fund another property, the temptation of a home equity loan was too hard to resist and Daniel and Lee say too easy to obtain.
“They’ve got to take a lot of responsibility out of the equation, obviously it was our decision to go ahead but there was no interview required,” Daniel said.”
>Grow up! O’h the bank didn’t make it really, really hard for them to borrow. Hell I would of made them walk on hot coals to see how commited they really were!!! (I’m thinking of buying a bank and renaming it to dogberts bank, and have like wild monkeys at the branches to try and steal my customers money (except people now can’t complain about the fees!!!).So the bank didn’t get them to go for a loan interview! Wow I’ve never had a loan interview either! And yet all my properties actually make money. There right it’s all the banks fault.
Rgds.
Lucifer_au“Surely common sense prevails.”
You want to bet?? There are a million things that could happen.
The broker and solicitor could pay each other kickbacks and just use ‘renting’ as way of doing it… Of course thats going all the way over to the other (illegal) side, but hey, the broker would get a tax deduction for it.But also, if something goes wrong – I want to know! I don’t want a contract changed (and resubmited) or something like that, I need to know what is happening in my busines.
Rgds.
Lucifer_auIt’s something that was invented that we never wsihed we had (like chemical and biological and nuclear weapons, etc).
Heres a link:
http://www.mulletsgalore.com/God help there souls…
Rgds.
Lucifer_auI thought I knew but then again I obviouly know nothing!
My guess someone who has posted lots… and made interesting discussion points.Anyway Congrats Derek!
Rgds.
Lucifer_auYour wrapping, so I’m guessing that your meeting prospective buyers/tennants/wrappes. Smrt but casual, where something that doesn’t make you seem a power person (you want the prospective buyers to be relaxed and you don’t want toi look like a RE agent), just neat but not way to dressed down (so no to stubbies… or mullets, hay it looks really bad on men, I would hate to see a womon with that kind of style *shudder*).
With investors, business, collared shirts. Think power dressing.
Well thats what I do.
Rgds.
Lucifer_au
