Forum Replies Created
I have seen dreadful CPAs and CAs. And I have seen brilliant CPAs and CAs. In reality it’s not the training that CPAs or CAs have, rather it’s the quest for continual knowledge (and not just those who do the ‘X’ amount of hrs to get a qualification). Those that continue to learn are the best ones, where as those who stop will just become another ‘bloody accountant’, no matter what their qualification.
I don’t believe one is ‘better’ than the other.
Rgds.
Lucifer_auLoL Hobart!
Too bloody true!!! Us syd/Mel investors have prob. reduced yields by about 3-4%.
But when stocks take off again see the yields rise again… Has happened before… will happen again.
Rgds.
Lucifer_auOkay how the figures work:
$100K property, 20% deposit which is provided by the seller, 80% through the bank.
A contract is formed thats between you and and the seller in which you promises to pay them $XXX amount per month. This is just like a loan, usually you include an interest rate and a time period.
To protect their interest the seller might place a cavet or a 2nd mortgage over the property to protect their interests.
To the bank it looks like you have got the funds to pay the 20% deposit, so of course they lend you the 80% required (but instead of it being provided you it has been provided by the seller). The bank takes first mortgage over the property
As for how to do, you need a flexible seller who wants to sell, and a good lawyer (who focuses on investors) and a good mortgage broker (again one that focuses on investors).
This is roughly how a no money deal works. Of course other examples of a no moey deal might be buying a property (say for $100K) ordering a valuation ($120K) and then after you have bought the property go for an increase based on the valuation (so if yo had put in $13K, you would get your moeny back, hence a “no-money” deal). Of course you still need funds to complete.
Rgds.
Lucifer_auYes it is betterbiz, though many smaller newsagents don’t tend to stock it.
Rgds.
Lucifer_auUsually it’s the mortgage insurers who restrict the loan size.
Use http://www.pmigroup.com.au/LocationWizard.asp to find out how high you can borrow and how much they will lend.Rgds.
Lucifer_auJust check out the deprication rates. Sometimes these agents use the tax savings to make it positive CF, which is not a bad thing, but just realise this.
Check out http://www.jaffasoft.com to work out the figures.
Rgds.
lucifer_au“The tenants are not very regular with there rent and aren’t very clean.”
So they don’t tend to pay you on time and they don’t really keep the house clean?
“They also refused to pay the $10 pw rent increase which was supposed to start when there contract ended in Oct 04. They said they didn’t have enough notice and so wouldn’t pay the increase”
So they decided not to pay you any $$$ even though a $10 increase dosen’t sound that bad or taxing…
Look these people aren’t helping you at all, so why help them? Treat others how you would be expected to be treated. It sounds like they are using a sob story to stay in the house, not pay the extra $10 and probably keep paying irregularly, while they don’t have to bother with the cleaning.
Eviction notice. These people have decided to act in this way!
Rgds.
Lucifer_auDo banks or financiers lend to trusts with an individual as a guarantor?
->Yes they will, though you may find that a more commercial approach is taken (for example you will probably have to open up a business bank account, which has slightly higher account fees, thats about it though… nothing too hard at all).
Also, can anybody recommend specialists in the set up of a trust?
->Gatherum-Goss @http://www.gatherumgoss.com/ in Victoria.
Rgds.
Lucifer_auIn terms of which is better… I would keep them seperate, otherwise you could ‘taint’ the proeprty trust with the share trading. Also if someone slips up in your property they can’t get your shares!
Rgds.
Lucifer_auIf you are buying +CF properties a trust. (15% discount on CGT, plus adds extra layer of protection from lawsuits)
If you are buying neg geared prop. a hybrid trust.(see above + can still offset tax losses to other personal income).If you will be buying allot of CF+ or neg. geared properties use a corporate trustee (a non-trading company runs the trust, you own shares in the company). This will add a further layer of asset protection.
If you are doing a wrap you cam use either a company or a trust (as the tax situation is the same for both entities (i.e. no CGT due to “emerging profits + trading stock”, rather all profits are seen as income) .
Rgds.
Lucifer_auNat R – all the info you needed was contained in one post…
But since you want extra SPAM, I’ll be happy to add it.SPAM.
O’h if it turns out that there is a product, I guess you will be the one who dosen’t know what they are talking about….
Rgds.
Lucifer_auIn some states you might need a licence, but thats about it…
And no it’s not illegal. And anyone who tells you it is has never been to Harvey Norman before (where they buy very low and sell very high).Rgds.
Lucifer_auDHA housing is usually more expensive, mainly because it is seen as a more secure investment than say a vacant rental property.
The problem DHA is that when you sign you have to keep the lease running for the period that they have specified, so if you want to sell you probably won’t be able to sell to owner occupiers, which is a lerge % of the market.
Also DHA controls the rent, so if you believe your DHA house is below market rents by $20- all you can do is appeal to the DHA, they may agree with you or they may not (in which case you cannot increase the rent).
In my honest opinon if you find a good property manager your investment is just as good as DHA property (since they take care of nearly all issues).
Rgds.
Lucifer_auFrom the normal channels of finance (banks, etc) – Impossible;
For ‘short term finance’, possible but then your paying up to 3-4% per month, and usually they don’t go below 80% LVR anyway.Rgds.
Lucifer_au” I have read the same article and I am having trouble understanding how she is achieving positive cash flow if the average gross yield across her whole portfolio is 6.9%”
I think she is using the tax benefits to create positive cashflow.
Rgds.
Lucifer_au“I certainly don’t depend on people who call themselves “bird dogs” unless they hold a qualification to do what they do.â€
“If I want a property, I go to real estate agents. I certainly don’t depend on people who call themselves “bird dogs” unless they hold a qualification to do what they do.”
>Some of my best deals have come from people who were “unqualified” like a deal that returns 155% CoCR/ 13%Gross. I’ve got another two going through someone who is totally and utterly unqualified and my return on those will be $300 per week positive cashflow, for perhaps under $12K down.
” I consult professionals such as solicitors and accountants and financial planners”
>And when investing in property when do you go to get advice from a financial planner? They know nothing about property… Actually they do know one thing, they know they don’t get a commission for any advice (because they haven’t sold you anything).
“Following the sheep will only lead you to the slaughter house. Most unsophisticated investors are followers!”
>In most other investments there are allot more sheep. The salesmen (aka financial planners) learn it at the training and then regurgitate to consumers who blindly follow their advice.
>And really what do most lawyers, accountants and building inspectors know about property investing? Most know nothing because they don’t own any property and those that do usually own one or two (or perhaps even three) properties.
>Being qualified doesn’t mean your good, or you have a better ‘understanding’, all it means is you’ve taken a course and done enough to qualifiy.
Rgds.
Lucifer_auIn my view it’s way too simplistic to say stocks vs. shares, because the investor themeselves determines wether they will get a high return.
As an example US bonds are currently paying 1-3%, yet I know an investor who makes round about 2% per month, so over a year he might make 24% while other investors are only reciving 1-3% per yr.
The asset class (property or shares) dosen’t make it a good or bad investment (both can provide fantastic returns), but rather the investor themeselves will determine if good or bad investment in my opinon.
Rgds.
Lucifer_auLonewolf, you will only be able to get a maximum of 80% loans, and probably less than that (low doc, but you would prob. need a no doc which have a LVR of 65%), which means you will have to proivide 20% (or 35%) deposits.
You might be able to buy one house (up to 100K), and if thats all you want great, if you want more however I don’t think your plan will work. Buyy the properties while you have a job and the banks will lend you perhaps up to 95% LVR so you only need to put up a 5% deposit.
Rgds.
Lucifer_auIn the latest API mag (http://www.apimagazine.com.au/) there was an article on a family who invested on the West Coast, a year latter they sold the property because they couldn’t find a property manager. It wasn’t a total diaster because it did go up by $10K, but after all expenses (costs in buying, costs in selling and they was slightly neg. geared because she couldn’t rent it out, even though the local RE agent said they would rent it out to the husband) was it worth it? For perhaps $4K or even less????
Way too little money for the effort expended and the risks.
It’s funny about the mines because I was on AussieStock forum and they were discussing a mining company called Pasminco, apparently it’s a basket case, and no one is touching it…
So if you invest on the west coast make sure you buy some shares in the company, as they are the major employer!!![baaa] (hay thats the first time I think I’ve ever used that type of smiley in almost 600(?) posts!).Although I might seem down on the West Coast, I just see it as an area to be cautious with. Usually if any mines move in they take all the skilled tradespeople first (well that has happened with two towns I invested in) and it almost becomes nigh impossible just to get a tradey, and as SJA said “A lot of those buildings seem quite ancient too.” Lucky my two purchases were of buildings that were pretty new, so hardly any maintenance issues… but when a light wasn’t working – that bill stung badly… And the PM even had him on a retainer!
So becareful and beware. As I’ve said personally I like the East Coast – PMs managing it for you (it is almost impossible to self manage a prop. when you have to jump on an airplane), tradies who you can get hold off, and are quite reasonable, and finally usually the areas have one or more industries, the West Coast in reality has only one – mining, when it’s good it can be excellent, but when it’s bad… well lets just say I am lucky that my two properties were CF+ by $10 p/w because I had zero cap gains. Thankfully the boom came!
Rgds.
Lucifer_auSo with the procedes you are going to spend probably a large % on a holiday (hay air fares and hotel rooms ain’t that cheap – I know!).
Nearly everyone I have ever spoken to about investing and have been succesful (usually very succesful) there has been a period of delayed gratification. I know it’s been the same for me.
Cut the holiday and you’ve got a higher chance of not running out of money for at least 3-4 houses. I know what I would do.
Rgds.
Lucifer_au
