Forum Replies Created
I think Spann’s book is a good one, the only problem I have with it is he is to a degree pushing high growth. The problem wih high growth strategies is that they don’t tend to work when there is no growth… And right now I’m guessing there isn’t going to be that much growth…
Rgds.
Lucifer_auI think alot of investors are becomming don’t wanter landlords. They’ve got all excited and bought “CF+” (probably more like CF- after expenses) without having a real idea on what there doing… Now they see only $15p/w hardly as anything (and most are too lazy to create any extra value) so they are selling… to buy things like 4WDs. And to give their money to people who charge them $$$ for ‘managing’ it.
Rgds.
Lucifer_au“I was thinking of was buying a 3 or 4 bedroom home and extending it to approx 10-12 rooms.”
This will require a bit more effort than just adding an extra room – you will probably have to DA approval from the council for construction, also with the number of people you are hoping to get you probably have to ensure that you follow council regulations in regards to accom. and also insurance will be expensive. Also yu might have on-going issues with neighbours/residents (if you have that many people staying there) -this equals complaints with council, which equals council inspections increasing.
Do your figures on this, but even better advice would be to start of alot smaller.
Rgds.
Lucifer_auI agree with FW – You must have a minimum of 3-4 deals before even thinking about using investors… Of course that just my opinon.
Rgds.
Lucifer_auYou can have a corporate truste (so basically a company runs the trust) and their are so interesting things you can do (for example having Intellectual property held by the trust and your other business can pay a fee for the use of it (so it transfers $$$ to the trust). Also you can have your business (other comapny) as a beneficary so the trust can distribute profits to your company.
You probably will have to find a good accountant to help you out (one who is fimilar with RE and trusts – not that many accountants are (although they think they are!).
Rgds.
Lucifer_auIt gets better with 4 stars… (or so I have been told…).
Rgds.
Lucifer_auMmmm… Interesting plan….
I think it will be one that favours major developers over us.
Also considering half the residents will be in public housing I question wether there will be massive growth prospects…
Rgds.
Lucifer_auJust quickly I think it might be worth your time having a look at this forum: http://www.mastermindforum.com/phorum/list.php?f=9
I think you might find some good info esp. on positing sizing / money management. In fact you can create a system with a negative expectancy (so you lose on most of your trades) and still make alot of money…
Rgds.
Lucifer_auRaceplays – interesting you are training up others and taking a % of their winings. I know one trainer, Dr Van Tharp (who is interviewed in the book ‘Market Wizards), who ran a year long course call the ‘super trader’ course. Price was a upfront US$100,000, and you had to already be in the market. After completing the course he would arrange for you to start trading an initial account of US$1Million.
Dr Van Tharp dosen’t trade, he simple trains people up and gives them his money (in fact he does trades his retirement account, which has a long term growth profile of around 30% ROI, but he only works on it once every 60 days though. so it’s hardly an active portfolio).
This means that he has created a passive income stream without having to work (even at trading… except the 6 days a year to rejig his retirment acct.). Interesting stuff!
Rgds.
jackw_auBecause you have positive cashflow, it won’t make that much of a difference, however if you were negatively gearing it wouldn’t be good (as you are pretty much reliant on Capital Gains to make money).
Rgds.
Lucifer_auYou can use Student loans as a deposit (in fact that is how Dolf De Roos started [http://www.dolfderoos.com]).
Rgds.
Lucifer_auAnd also it will be about how people who are negativley gearing are having to sell all their properties and still go bankrupt because ‘interest rates raise a few more points’ and they can’t afford it.
Rgds.
Lucifer_auWell with one property I would be losing alot per week when it was vacant and tennated.
To me I dislike losing moeny (as I don’t need a job, the benefits of negative gearing aren’t that great for me). I really invest for the cashflow not the Cap. Gains though.
So I would buy the 4 netural properties and make them positively geared investments (through either improvements/renos or through another twist).
Rgds.
Lucifer_auUsually country properties are cheper and if they are in area that is reasonably stable usually reductions are going to be a lot less in % wise than more expensive property (who wants to buy a multi-million dollar house in a recession? Not that many people…).
Rgds.
Lucifer_auI often see this. Raising funds is not easy. Sure you might be able to give a high return, but beginners usually have little experience in real estate, I really do question what would happen to beginner investors if something really bad happens especially when they don’t have the number of proeprties to keep paying the investor the return they expect).
I would suggest you get a least 4 deals under your belt before you even think about getting investor funds.
Rgds.
Lucifer_auAll of them are actually quite good. I would say the most recent one.
Rgds.
Lucifer_au“some are lucky through good timing”
But somehow I’m guessing they had done absolutely nothing (like buying property/shares/etc) except getting luky through good timing. Usually someone has to do something to “get luky”.
Rgds.
Lucifer_auSince you’ve got no idea what to do with I would suggest you put the money in the bank. Many times I have seen business people who have made millions blow it all by trying to become investors. I suggest you spend money on educating yourself, because as Warren Buffet says “the best way to make money is to avoid losing it”.
Rgds.
Lucifer_auThe real protection comes from the trust. It’s just easier to replace (fire) a corporate truste rather than an indvidual.
(manily because a company has limited liability where as an indvidual has unlimited liability). But as I said before the real protection comes from the trust.Rgds.
Lucifer_auAs DD said be very careful. I do have a friend who has invested their, but I wouldn’t. It almost nigh impossible to get a tradesmen there (they come and stay over night, so you have to pay for that), and valuations can take absolute weeks to arrive (and because of the condition of the properties are usually undervalued from the contract price).
DD is right – No RE agents ever visit properties on the West Coast and no one provides property management services at all.
In terms of prices IMHO it’s already had it’s run – remmember these houses were worth $20K once (and have only grown in the last yr (for many years cap growth has gone backwards)… And with $20K houses as you can imagine the standards aren’t usually that high…
The east coast is very beautiful and I think much higer cap. gains are to be found over on that side (I have a few IPs on the east – much higher C.G). I find the east coast much easier to do business with (in terms of having RE agents, valuers are easier to get, etc).
My appoligies to anyone on the West Coast [smile] but IMHO the east coast is much better (more tourist go down that side rather than the West side for a reason!).
As DD said buyer beware down there!
Rgds.
Lucifer_au
