hi mill in training
everything you say is correct

but your like those horses with blinkers on

narrow focus

“Look at Matin Ayles at 30. He started with verry little from what I understand.”

he’s a business……

so if its doing so well developing ,why is he doing the speakers curcuit……??????

simple……..it PAYS MORE!!!!

$700 per person is easier than competely with developers trying to do the same thing your doing……

i’ve seen people make $5,000 for a 10 minute presentation spot….

still blinkers are nice….at least you know which direction your going…

over and out

hb

sorry
last reply ….getting bored

redwig…if you read mitchy question carefully, you will see she has only 8K equity….

lets play the numbers games…….

what you can do with 100K loan…2 different scenarios

for this exercise lets ignore equity….lets keep it simple.

1. borrow 100k for a IP….say in Elizabeth Downs..an area mitchy knows
with a rental return of say $150/wk…..sound fair???
Interest only 7%…make it $7k repayments a year
rental $7.8k for year, but by the time you pay PM you break even…fair??
we won’t bring in Council & water rates, and any repairs…OK
so there…break even no problems…lets sell 5 years….
5 years down….she’s doubled 200K….wow…..(is this possible in elizabeth downs?????)
pay the bank back
made 100k profit…..pay the CGT…….lets say $25K
in hand after 5 years 75K CASH for do NOTHING
WOW
lets not put into this equation what 100k is worth 5 years later…

OK lets try that same money…something different….

2. buy some plant and equipment $100K
(because i can only use my business as a template…this is what would happen with 100k)
Yearly income generated $200K…(lots lots more but i’ll be lean for this exercise)
i employee someone to operate it….$50K (average salary), as you’ll see later i can pay more…but i’m a mean boss
the portion of the rent space for this new equipment is say $30k a year..excessively, but hey, its only money, and i own the building.
i have 5 years HP on equipment, repayment $24K a year
i claim back depreciation on plant and equipement 30%/yr equal 30K
so how much cash EACH YEAR do I have?????
200-50-20-24+30=136K a year

Now i know i have to pay tax……….
so lets be generous and pay the full 48.5%

makes a take home amount of $70K a year
or over the 5 years of $350K……TAX PAID IN HAND
and i haven’t even sold the business yet………..
But I HAVE TO WORK THERE…keep an eye on my employee

same amount borrowed
2 completely different outcomes

sure i used my business as a template…..but a lot business would not be different….you only have to drive around commercial estates and see the glitzie buildings and quality of cars in carpark to work our whos doing fine………when you local real estate agent shows up in a bmw.or the solicitor has the a merc in the drive, or the concretor shows up in a monaro v8, he’s obviously not being paid $20k a year

over and out

hb

Hi Aperry
“few are as successful as you obviously have been”
Really
Crazy John started with no contacts, no university degree and no experience. Fifteen years ago, he was selling electronics in suburban obscurity – now, worth in excess of $300 million.
Eddy Groves started his business career as a milkman at the age of 19. Today he owns the nation’s biggest childcare chain,with an estimated personal wealth of $150 million.
My bookkeepers daughter was lost for years after finishing uni, now at 26 she is opening her 3rd Fashion Shop, and just bought a penthouse for 500k, plus her audi sports car, all from $0
her sister seeing the potential has started her own fashion label, and has had great write up in national papers….all from $0
the list is endless
there’s opportunites everywhere
we all use the services of small businesses everyday
butcher, baker, newsagency, child care centre, hairdresser, etc etc….
1.2 million SMALL businesses in Australia

“I can’t see the problem with high levereage “

really
last year 20,600 non business people declared themselves bankrupt

#1 cause……..UNEMPLOYMENT…37%

#2 cause……EXCESS USE OF CREDIT….21%

WOW….and you don’t see any problems??????

if Mitchy had to sell everything today, because of a misfortune (and before she invested in an IP)
how much would be left after all the outgoings are paid….1k maybe 2K….maybe $0
How much after an IP????????

I wouldn’t let my daughter (21) go down that path…….
but then, there’s wiser people than me on this forum

good luck

hb

hi young people

how often have you told your kids not to do something, only to find 3 minutes their in tears and your reply is “well i told you that would happen”
whether their 2 or 20, they know best….well until disaster happens.
The great thing about being older……..is you’ve DONE it
all the debts, the bills, the kids, the bank, recessions, boom times, credit squeeze, 18% INTEREST ,etc etc
and some come out the other side relatively intact…….and a few dollars behind you.
But not everybody did.
some lost everything….including their homes.
try getting a loan then, especially if your a bankrupt.

life is timing……and cash

for example, a large property was bought for a 1.2m on almost 100% loan….within 12 months before they could develop it, the market turn, and it was sold at morgagee auction for 360k (only 2 people at auction)……they lost their home…….today that property is worth 1.5m
great CG if you bought at 360k
pretty ordinary gain if you paid 1.2m after 12 years (wouldn’t have even cover the interest payments)

patient ,timing and CASH are every thing

i started with nothing….$0
at 26 formed my first company worked 24/7 none stop within a couple of years we where turnover 1m a year….high profits and high cashflow. money to buy PPOR cash, money to buy 2 IP’s cash.

the point of these forums is to learn and get advice from people who have been thru it.
everybody has a story, this is but one.

if my daughter ran your ideas past me, i would redirect her down a different path.
other on this forum might direct you to more IP investments.
some strategies will be more successful than others
unfortunately there’s no green arrow to show you which way to go, but a lot of sharks along the way trying to make a quid out of you.

older people do have a knowledge base
why start at the bottom….tap in, and jump a few rungs on the ladder

good luck

hb

hi micheal

your right,

“He would now have 10 apartments in a prime area.
Lesson: you earn cash trading and pay tax. You can get filthy rich as a property dveloper holding onto your projects.”

but i reckon….he could have been really FILTHY FILTHY RICH….not just filthy rich.

show you what i mean

lets go back 12 years

Medium house price melbourne was $145,000 (1993)
today its $360,000 (2005)

now going on your theory, if he had 10 houses today they’d be worth $3,600,000…..right

well….look
if he was really really clever and invested in Blue Chip Commonwealth Bank (safe as houses)….right
his $145,000 would be worth $779,375 today….and if you multiply by 10 ……close to $8 million dollars

your right ……he’d be filthy filthy rich…..but better as a SHARE developer

isn’t hindsight a wonderful thing

but the real question you forgot to ask him was …..

“did you have fun?”

hb

wow troynbec

welcome to world of buy , reno, sell

everyone’s doing…….and i mean everyone
even an accountant i know, has throw anyway his pencil and picked up a nail bag.

you should start a society, or maybe even you own webpage…….
http://www.therenogang.com.au……..
hire an ad agency to sell the properties…30 sec tv ads

you could even end up on channel 7’s “hot properties”

BUT i hope you do better than the reno sisters who did a small buy, reno, sell up north of melbourne

they spent……..

2 years renovating, and after all costs,
made a whooping $20,000

$20,000 profit
2 years
4 people working on it
that’s $5,000 each for 2 years
that’s $2,500 each a year
thats $48 a week
thats $1.02 an hour……………

hey…….
so many people renovating……..
so much profit to make……

tell ya what……..i’ll shout the beers…(got a pencil job)

hb

Ohh mitchy
“i need a deposit of around 16k.
are there any ways of getting around this?”

can i have it now….can i have it now…
so young and wanting everthing straight away……just like my daughter.

can i give an alternative view…..being old and everything

WORK…..SAVE……WORK……SAVE

thats how we use to do it in the old days……..

but what the heck….look at all that money their throwing at you………

no deposit…..no equity………..

NO LIFE…..and then become just another statistic in life

“A RECORD number of New South Wales families lost their homes last year as growing numbers struggled to meet mortgage commitments”

won’t happen to me

and anyway what would old people know………..

hb

Hi ASM
love that bottom line………………
” keep out of trouble with the ATO”
But not sure about……………
“leave well enough alone”

Reading between the lines sounds to me like the fund could be walking a fine line.
Even though your accountant might not have picked it up,
the Independent Auditor should have.

You do have an independent auditor????

Deputy Commissioner Mark Jackson recently commented,
“It’s worth noting however, that an area of contention which is often raised with us is the need for auditor independence. Under SIS the auditor plays a crucial role and is in fact a key to compliance.

The auditor needs to report breaches of rules and regulations so that the trustee can know where errors are made and what needs to be rectified.

If the auditor is not independent – for example if they are involved

In running or advising the fund – then that fund is at greater risk of breaching the rules, as there is a risk that less scrutiny might be applied to decisions or activities he or she may have recommended.

In other words where, for instance, an accountant recommended that a fund follow a particular course of action which was contrary to the rules, that infraction is quite likely to go unreported if the same accountant subsequently conducts the audit of the fund.”

And reason why an Independent Auditor is needed is………….

Deputy Commissioner Mark Jackson..
“One of those supporting rules to which I would draw your attention is the requirement that any business or other financial dealings between a self managed fund and its members or related parties of the members must be conducted at arms-length.

In other words the conditions attaching to those dealings should demonstrably be no more favourable than those which would apply to non-related parties. They must be at prevailing commercial or market rates.

That being said, it’s clear some trustees do not appreciate the level to which the sole purpose provision underpins the regulatory regime applying to SMSFs.

I say that because the benchmarking showed one of the most basic elements of a complying self managed fund, which indicates compliance with this “sole purpose” was often missing
The area where we found most non compliance was the failure of the fund to maintain its assets separately from those of a business in which one or more of the trustees was involved.

Trustees must keep money and other assets of their fund separate from their own money, while fund assets must also be kept separate from those belonging to a business run by one or more of the trustees.

Trustees are also prohibited from using money belonging to the fund for personal or business purposes or as a form of credit when faced with such a need.”

So there you go…..
that 15% tax on SMSF does come with strings attached

Just a quick question???????????
“Alpine property has very different rules to other investments”

Really………

can you show me a link to the ATO website where i can learn more

i love investments with “different rules” to the norm.

hope this helps

hb

HI grossrealisation

what an interesting thought
“organise a company and a trust,clean company from day one the company organises the property, lend the deposit to the company you as an employee of the company gets a low or no doc loan ( make sure you can cover the loan repayments”

so your concept here is that the company buys the property….right
then rent’s it to hiphopsupamix for market rent (the company has to get income from something and he needs to live somewhere?)…..right
Now if it wasn’t market value then the company would have to pay FBT…and we don’t won’t to go down that path do we.
So the company collecting rent from hiphopsupamix, and eventually in time it becomes positive, so has to pay 30% tax on profits….right
now it doesn’t have to distribute the remaining profits to hiphopsupamix , but if it did he pay the what tax is due……right
Finally, when it comes to selling, the company pays the CGT on the sale, then distribute the profit’s to hiphopsupamix, so that he can then pay tax on remaining amount…..right

wow

thats creative

but maybe,…..now i know this is simple…….but if he’d kept it in his own name, he might actually make more.
after all it’s his AFTER TAX money thats funding all this concept.

Think about it
NO company to form….save $1,000
NO ASIC fee to pay $200/ ayr
NO tax accountants to audit company $1,000 plus a yr
NO tax on company profit
NO CGT to pay on sale of property

i know its simple
but i think it will win in the end.

its probably why a lot of people sitting on million dollar mansions don’t have them in company names.
That way they just bounce around their mansions.
It seems to work for them

HB

hi Giulio

what are you talking about

of course you can make money

just recently the reno sisters on channel 7’s “hot properties”, spent 2 years renovating, and after all costs,
made a whooping $20,000

$20,000 profit
2 years
4 people working on it
that’s $5,000 each for 2 years
that’s $2,500 each a year
thats $48 a week
thats $1.02 an hour……………

i know what your saying Giulio
MAC’s is paying more that that

but not a much fun hey…….
up to your knees in plaster dust

those guys don’t know what their missing….in those neat, clean little uniforms with the big M on it……..

renovating….their’s money to be made…..and its fun….every weekend……

sorry…been sniffing to much plaster dust, anyone got some turps to wash it down…………

hb