You might need an equity partner? 50% of something is better than 100% of nothing

Cheers
Jeff

The positive cash flow properties will be right under your nose as Dazzling has pointed out.

Are you restricting yourself by placing certain parameters on you buying eg price.?

Are you looking at alternatives to add to the cashflow?

If the deal is good, no matter what price and whether you can afford it or not, it will be worth something to…[Read more]

pr

You could try http://www.quotable.co.nz
This site gives a free national demographic profile but you have to pay a few dollars for a localised one.

The other site is http://www.stats.govt.nz the last census was 2001, the next is 2006

Cheers
Jeff

Originally posted by grego:
Why convert to industrial asap? Is there better resale value for land that size when sold as a business compared to as a residential house? I will pay what the vendor is asking once i figure out how this zoning issue may affect it…

I just prefer dealing directly with businesses that have a vested interest in keeping…[Read more]

Yes Grego I would. An important factor to me would be the land content because I would be looking to convert the property to industrial when I could.

Leaving it as residential may cause some problems depending on the type of industry close by (noise, odours).

You would have to assess the pros and cons of the particular property and have a plan…[Read more]

Commercial property in smaller regional towns can be extremely lucrative. The yields tend to be better than in the major cities so positive cash flow is more easily achievable however, capital gains may not be as good.

Location is still important and high street or highway locations will generally perform better than the properties one block…[Read more]

You might get it cheaper, I don’t think those towers in the background are there anymore.

Jeff

Michael,

My reference was only to this comment and the fact that money can be made by positive cash flow alone, hence my example.

Cash flow is only really of concern when you’re looking at servicability. You won’t make your millions out of five bucks a week on $20K down. Its the CG where you make your bucks, and the WHOLE market is headed for a…[Read more]

As I said Michael, it was a raw example. But if the price dropped to $80k would that not be a capital loss of $20k no matter which strategy you used.

Why is it that we apply one scenario for one strategy and a reverse scenario for the other strategy.

For $2m you could buy a service station leased to an oil company or a motel on a 20 year lease.…[Read more]

My point is that a 2% net yield on money employed will not cover your cost of capital. That isn’t even keeping up with inflation, so in real terms you’re going backwards.

Let me explain my raw example:

Purch Price $100k
Deposit 20k
Loan 80k @ 7%
Interest 5600
Net Rental 9000
Net Surplus…[Read more]

Originally posted by Michael Whyte:

Cash flow is only really of concern when you’re looking at servicability.

Sorry Michael, I can’t agree with you here. Buying on a 9% yield and borrowing 80% at 7% gives you 2% on everything you borrow. It’s this variance which provides us with excessive returns on capital employed.

Sure, you have to factor…[Read more]

Auckland’s population is more than 25% of the total population of NZ. It also has a large immigrant base probably because it’s the first port of call.

Both rents and house prices tend to fluctuate there more than most other parts of NZ. In Monday’s NZ Herald there was a report of rents falling sharply in many parts of Auckland eg Takapuna/Milford…[Read more]

There’s a book by Martin Roth and Chris LAng titled “How Investing in Commercial Property Really Works”. It is well worth a read.

I have found that the majority of serious property investors are involved in Commercial Property, residential is usually only a stepping stone.

With commercial you need to be able to resolve problems and cater for the…[Read more]

Pick up a book titled “The E Myth” by Michael Gerber. After reading the first couple of chapters you’ll decide whether or not to sell your business.

Cheers
Jeff

Hi JPD,
I personally know nothing about horses other than my annual bet on the Melbourne Cup however, my sister in law and her husband have done exactly what you are proposing on a 13 acre block just north of Auckland NZ.

In their plan they built an arena, and 6 stables to complement the grazing. For stabled horses they get more per week and of…[Read more]

Just sold a property in Putaruru (near Tok) for $10k more than the asking price – an unconditional offer from an “A.W.” as Mini describes them.

Watch out Muppet the Jafa’s are coming

Cheers
Jeff

Hi all,

Just a quick update on the project. We are still going through the regulatory process before any works can actually start.

In NZ there is this undesirable piece of legislation called the Resource Management Act (RMA) which has to be satisfied, together with building compliance, fire, health and disability requirements. Our designer is…[Read more]

It is common for sums of money to be held in a solicitors trust account subject to completion of works etc.

I personally would want the monies held in “my” solicitors trust account and not the vendors solicitor.

The amount should be inflated to cover the maximum amount required to complete any necessary works. This provides an incentive for the…[Read more]

What about building to provide additional cashflow?

Have you explored the different types of dwellings you can put on this property, the costs of building to completion and what sort of cash flows can be generated?

It’s worth doing some more homework.

Cheers
Jeff

You don’t know if you’ve got a good one until you have to claim.

You can use a broker however, some companies such as AMI do not use brokers and tend to be a little cheaper. They also have limited cover for loss of rents and maliscious damage by tenants.

There only seems to be about 4 major insurance companies underwriting the cover in NZ these…[Read more]