Hi Guys,

I went to one of their seminars and also had a free consultation about 2 years ago. The ultimate aim from what I could assess was to get you to buy one of the properties that they either developed or represented the developer. The scenerio was basically buy a new or recently renovated unit / flat / apartment under a negative gearing finance arrangement. The key advantage was that they could do all the work for you – loans, refinance your existing home to get equity for deposits, find the house etc. However the key disadvantage in my assessment was that you would end up paying above market rates for the properties in order to fund the free seminars, consultations, overheads, sales people, etc etc.

I am a +ve CF investor, so the concept had little appeal to me, but it was interesting to learn of the angles these firms have to get you in.

Hope this helps.

Gus

Michael & Kaye,

I know many people have said this but I will add my message of appreciation – thanks for all your posts with the wealth of information, tips, insights, and experiences etc. It really is very helpful. Appreciate your willingness to pass on the education.

Thanks

Gus

Hi everyone,

I’m with Regina on her idea of an advanced level of content. I guess I was looking for more ‘how to’ information and less ‘hype / motivation’. For example my key area of interest was on wraps and having read the material on the PI.com web site and other sites, the WG book sent out and other material I felt I had a handle on the concept but lacked the tools. Given the unavailability of the wrap pack (which I would have bought on the spot) somehow feel that I don’t have all the tools / information I needed to progress a wrap deal in a legal and professional manner. I will obviously continue to progress my plan, but I feel it won’t be as quick as I would have liked given some unanswered questions.

Steve mentioned running a wrap boot camp and this I would hope would be a more sophisticated level of education. My feeling is that if I am to do this properly, I want to follow industry best practice and avoid any appearance of being a ‘dodgey backyarder’. The question is what is best practice? What are the key questions in an application that will tell me whether or not I have a good or bad wrapee? What does a wrap contract look like, what are the key elements and what areas are potentially contentious and how do we get around objections? The list is somewhat endless, but the answers will save an enormous amount of time and will ensure that we serve our clients in the most professional way.

I will be up for any additional wrap advanced education on offer. Good suggestion Regina.

Gus

Gordon,

There are enough really good books around to satisfy your thirst for knowledge on the real estate subject, however getting out there and buying your first property is the experience that will make your knowledge real. The more you buy and the various strategies you employ on your journey will further expand your expertise. As someone mentioned at the seminar over the weekend do you want to be an acedemic or a practicioner. Practicioners make the money, the others……????

Read and implement

Good luck

Gus.

Hi Gerard,

If memory serves me correctly this strategy is advocated by Henry Kaye and the National Investment Institute. You may want to do a search on this site to see what many have said about this company. The ASIC website also has some useful cautions about this type of investing. It is traditionally the domain of the sophisticated, well educated investor, who is comfortable with large risks. CHG is in someway connected with Henry Kaye, at least that is the company he refers his graduates too

Gus

Andrew,

Personally, I’d rent now and consider investment in PCF property. When renting, you save all the upfront costs of purchasing, the ongoing costs of ownership (eg rates, maintenance, insurance etc) and this will free you up to invest. Through wise investment you could potentially put your $30K to work and bring in a resonable second income (PCF Property) which would supplement your existing income and may enable you to buy in the not too distant future.

Gus

Hi Fernando,

Vacancy rates are not the only thing to look out for. Yield is essential. My understanding is that many appartments have been rented but at cut price rates in order to get ‘someone’ in there to help pay the mortgage. If you only get 2-4% rental yield then you have to find the other 2.5-4.5% yourself. I suspect that many investers who have bought into the Docklands are relying heavily on negative gearing benefits to make the sums work. The bulk of these benefits only last 5 years then your on your own. I also understand that the body corperate fees etc are quite high. This is what some friends have told me based on their current rental experience in the Docklands presinct. They like the area and the complex I must say.

I also agree with other contributors in the sence that it will only get more difficult when all the other stock comes on the market to get a tenant and the yield. Capital gain may also be difficult in an oversupplied market – particularly given the trend recently for investors to fuel demand and they will be seeking some depreciation benefits which may not exist on a 5 year old appartment V a brand new one. Also I’m not sure I entirely agree that banks are happy to lend if the security is a inner city appartment, particularly in the Docklands. A family member who is quite senior in one of the big 4 banks has indicated that the lending criteria ie the LVR the bank is prepared to lend to is lower – in other words you may need a bigger deposit because the bank feels it is a riskier venture.

Anyway some thoughts for what it’s worth

Gus

Hi,

I’ve just completed a renovation and the costs really depend on what you choose to do yourself and what you get someone else to do. In terms of your list I can offer the following guide:
Roof > $3,000 – $4,000 assuming you repoint, repaint etc. Best to get a professional group to do this.
Painting > $1,000 – $1,500 for paint, depending on the type (eg high gloss), brand, colour, how many coats and whatever you charge out for your time etc. I assume you have brushes / rollers / mixers etc, if not add another $100 – 150.
Curtains > it really depends on the material, the track type, window size and type but it could be anything from $250 to $600 per window.

Hope this helps

Gus

Hey Quasimodo,

Re: “Your brain will give you the answers….Ask a better question..”

Good to see that you are putting your “Tony Robbins” learnings to good use! Tony has some pretty cool insights that help everyday.

Appreciated your comments on some of the posts you’ve made too. I look forward to reading more.

Gus

Great article Steve. I didn’t come across it until today. Very informative and helped me create a few additional distinctions about -ve geared property. The whole notion of paper / unrealised gains is a big issue. Having reviewed my investment and lifestyle goals over the last 6 months I have come to the conclusion that I need to focus on accumulating the cash not just the equity. In fact I’d say that in prioty order I’d prefer the cash, while at the very least maintaining the equity position of the investment.

Cash is king in the sense that it can fund your lifestyle, help with debt capacity and serviceability, and allow you to increase your property holdings to…generate more cash. I guess in treating property investment more like a business in terms of outcomes needed to survive / stay in the game, one thing I would need to concentrate on is building my cash flow not just the equity base.

Thanks again. I love the learning

Gus