Forum Replies Created
- Originally posted by dkram:
Dear IP Gurus,
I am totally new to IP and I am determined to be successful. I want help in initial steps. Here is my situation:
My gross income : $130K per year (i am an IT contractor).
My wifes : $50K (full time govt job).
Our home valued at $280K (mortgage : $140K)
Have 2 kids in primary school. Car loan repayment $500 per month.We are thinking of changing our home to go into a bigger home. I think we are prepared to spend about $450K.
Lenders say that they can lend us up to $800K.
These are a few things i want to do.
a) get new home – upto $450 (build or buy)
b) sell the existing one or keep it as IP
c) get an IP -cos I can borrow.What I cannot decide is how much should invest into IP. How to calculate that figure? Whether to keep the existing home as IP or not? Whether I should invest into IP first or should I get the new home first? The current home 3BR + study will go for sometime as kids will stay in primary school for sometime.
I would appreciate a lot if someone can help me make these decisions. I know there are people out there with heaps of knowlegde and experience who can guide me.
Thank you very much for your time!!!
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Dear Dkram,1. What are your own property investing goals?
2. How do you want to create wealth through property investing? Via IPs or PPOR route?
3. What are your own present thoughts at this point in time?
4. Looking forward to hearing from you further please.
5. Thank you.
regards,
Kenneth KOHDear Meilin08,
1.What are your investing goals?
2. What kind of work are you and your husband doing now? Are you now in Singapore?
3. I will love to meet up with both of you soonest before I fly out to Perth again this Wednesday on 7th Sep 2005. My Singapore mobile number is 90391898.
4. Thank you.
Cheers
Kenneth KOHOriginally posted by meilin08:We sort of “fell into†property investing but have been very lucky with our purchases.
Thanks, Mei[biggrin]
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Dear MeiLin08,1. Care to share with us how exactly do you go about doing your research and due diligence and how you and your husband go about deciding where and which property to invest, so as to be “so lucky with your purchases” to date?
2. Thank you.
regards,
Kenneth KOHOriginally posted by meilin08:When we bought our first PPOR in 2000 we did not use the FHOG so we will be using it when we get back to Perth to live.
Mei[biggrin]
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Dear MeiLin08,1. May I take this opportunity thank you for sharing with us your encouraging story. My congratulation to you and your husband on your successful property investing to date.
2.You may want to re-confirm with the Office of State Revenue regarding the FHOG.
3. My understanding is that you will no longer be eligible for it as you are presently holding other properties in WA. I stand to be corrected though.
4. May I ask who is your tax accountant and how do you find their services to date?
5. As for your Singapore investment, is there any particular reasons why your husband and you choose to invest in a S$1.5 million property instead?
6. Thank you.
regards,
Kenneth KOHOriginally posted by Dr.X:The whole idea of this post was not whether we should love money or not its that being an investor means that you constantly get attacked for wanting to make money.
By people WORKING for money in JOBS.
When I was working as a scientist, I used to be attacked constantly by “animal liberationsists” for using experimental animals. These people were very happy to sit in a restaurant after their little riots and eat STEAK!!!!
In the past, when people said anything about using animals, I used to ask one question, are you a vegeterian???? If the answer was no, then I used to respond with, you are a hypocrete and have no right to be lecturing me.
NOW as an investor, I say, do you work for free??? If the answer was no, then I used to respond with, you are a hypocrete and have no right to be lecturing me.
People love to put others down for something they also do themselves????
We buy properties in Adelaide. Immediate Cash Settlements, No Real Estate Agents, No Fees.
[email protected]
phone 0412 437 582****************************************
Dear Xenia,1. It seems that you sort of “enjoy” allowing yourself to be affected with what other people says and think about what you are doing/who you are.
2. I wonder what’s your real true motivation for allowing this?… As there will always be others who think/respond differently from each one of us to a certain extent.
3. To me, “who I really am”(Self Image and self Esteem) is separate and different from what I am doing (Actions and Behaviours) presently.
4. I will normally allow myself to decide “who I truly am” as a person as God has made and wanted me to be.
5. I will NOT allow others to bother me with their criticisms and feedback unncessarily especially if their comments do not help me to become a better person consequently.
6. Internally and within myself, I know very well that for who I am and what I am, I have been uniquely created of by God Himself, to be different from the other individuals despite sharing most of the same human characteristics and features, as other human beings.
7. Thus, I am always mindful that since it is God the Creator, who has made each one of us uniquely, the way we are now, why not learn to accept ourselves as “perfect” as God has deemed us to be in in the first place when He has declared us to be in His perfect image as our Ultimate Creator.
8. As for what I am presently doing, I try to consider the feedback given buy other people and from the immediate operative environment and see how I can further improve myself and be more effective and more efficient in what I am presently doing so that I can better value to serve them.
9. For your kind update and considerations,please.
10. Thank you.
regards,
Kenneth KOHOriginally posted by Dr.X:Not rocket science kp, all we do is buy property, value-add and re-sell. Just like all you other guys and gals out there. We use the old trick that in a hot market, if you don’t have a finance clause and offer a quick settlement, our offers get looked at more favourably (sometimes).
What do you do?[biggrin]
Cheers
Xenia
We buy properties in all conditions. Can offer Immediate Cash Settlements, No Real Estate Agents Required
[email protected]
phone 0412 437 582*********************************************
Dear Xenia,1. To me, you can either call yourself a Property Trader or a Property Renovator or a Company Director in a Property Renovation/trading Firm.
2. I’m also a full time property investor as well as a company director.
3. With fellow forum members, I will project myself as a full-time property investor.
4. When I got queried at your Immigration, I will tell them that I am a Company Director… of my own Australian Property Development Company, of course!
5. I agree with Wayne that it is better for us to be honest and straight about own status.
6. I do not think we need to be or feel apologetic about what we are doing as a full-time property investor.
7. For your kind considerations,please.
8. Thank you.
regards,
Kenneth KOHOriginally posted by pete r:Hi DrX,
I wonder why you shy away from the truth. Why allow other people to determine how you feel and what you say? That is giving them a tremendous amount of control over you and your feelings. Isn’t it really their problem? Why not let them deal with their problem rather than allowing it to become yours? I realise that it can be difficult, especially with friends and relatives, but I was always taught to retain control of the way I feel and not give others power over me.“A person convinced against their will is of the same opinion still”. No sense in trying to change people’s opinions and it is unproductive. I try to continue to be proactive and productive. Do you want to be rich or right?
Congratulations on what you have achieved and I can’t see why you should allow others to influence your dreams. They are yours and no-one elses. Good luck and best wishes.
pr
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Dear Xenia,1. I fully agree with Pete’s a/m comments.
2. For your kind considerations, please.
3. Thank you.regards,
Kenneth KOHDear Meilin08,
Thanks.
I am claiming mine back too.cheers,
Kenneth KOHOriginally posted by vernon:Just bought a report from one of those online property report websites last night and was wondering how accurate are they?
Although they might be able to provide sales data accurately, I found that the estimate valuation to be about $60K to $70K lower than what the vendor was asking for.
No doubt the property may be situated in a exclusive suburb with high growth potential, the propertyin question needs some TLC and is about 20 years old.
My thinking is that if I offer too high a price I would be the sucker. If I don’t I would probably lose it to another buyer. However, my thinking is also that if someone else wants to pay a premium for the said property when I am not prepared to, they’d probably deserve to buy it more than me!
Am I making sense? [blink]
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Dear Vernon,1. I will suggest you go for the figures. It is quite likely that the vendor is asking too high a price in today’s market condition.
2. Perhaps, you might want to further purchase the Post Code/Suburb sales data to see the reliability of the house price estimate given for this property by comparing it to the other similar properties sales done in this suburb/post codes. In this way, you are likely to know if the property’s present asking price is realistic or not , in today’s market condition.
3. If you want to invest successfully, you cannot afford to invest using emotions or fear of losing the property sale to the other potential buyers, as you seems to be suggesting in your present post.
4. You need to do your own in-depth research and due diligence objectively and look at its figures first before you decide to invest and decide how much a reasonable offer for the property would be.
5. For your kind update,please.
6. Thank you.
regards,
Kenneth KOHOriginally posted by vernon:Hi guys,
I’m referring to services like RP Data, propertyvalue.com.au, Home Price Guide etc.
As for the actual valuation of the property, how does one go about arranging for it (sorry I am a newbie so need to ask fundamental questions).
Thanks
Vernon
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Dear Vernon,1. I’ve used these kind of reports before myself and find their house price estimate to be quite accurate and reliable.
2. So if you doing a general research into a specific suburb or/and property, I find them to be sufficient even if there is no live site inspection of the house being valued.
3. However, if you are preparing to buy an actual property, I will strongly recommend that you engage a professional valuer to do the valuation to suit your own pre-purchase requirements as well as a good building inspector if you are investing into a second-house resale house, as an beginning property investors.
4. For your own kind update and due considerations,please.
5. Thank you.
regards,
Kenneth KOHDear Mei Lin and EECCHHoo,
1. Depending on your budget and desired house quality finishes and required value for monies, Dale Alcock Homes Pty Ltd, Celebrations Homes Pty Ltd and Homebuyer Centre actually belonged the same boss but catering to the different market segment.
2. Please contact me at [email protected]. My Australian mobile is 0418758123 and my Singapore mobile is 65-90391898.
3. I will be more than happy to speak with you face to face this week if you are in Singapore.
4. Alternatively, if you are in Perth, we can also arrange to meet there as I will be flying out to Perth from 8th Sep 2005 onwards.
5. I’ve built with 3 different builders in WA, namely, Don Russell Homes Pty Ltd, Dale Alcock Homes Pty Ltd and In-Vogue Living Pty Ltd/MetroStyle and can probably share with you my own experiences working with each of them.
6. Looking forward to seeing you soon.
regards,
Kenneth KOH[cap]Dear Nigel,
1. I have read most of Olly Newman’s books and even attended one of those courses run by empower Education where he was one of main speakers. You may want to read about his investing background in his book, ” the Lost Property”.
2. If I were you, I will not simply and lightly discard what Olly has to say, given his rich investing experiences and life insights.
3. Honestly speaking, I have better regards for what Olly is saying than what you have posted here, though I may not fully agree with him.
regards,
Kenneth KOHDear Robert,
1. I am a full-time property investor from Singapore. I see myself as “living off equity” although I have still not truly achieved my financially free status, as yet. Thus, my full-time job is that of travelling around and doing property investing.
2. I have attended Michael Yardney’s Real World Real Estate Course last year in June 2004. Some of my co-participants were surprised to learn then that I was living off the equity then although I was only having 2 Australian properties then.
3. One year later in 2005, I managed to have 4 properties, excluding the fifth one which I pay A$45,000 for the off-the-plan unit apartment purchase in the Goldcoast which will settle in 2006.
4.When I started with developing 2 properties in April 2003, the total value of the property portfolio amounted to only A$416,759. Upon these 2 house completion some 9 months later in early 2004, the total value for the same 2 property portfolio have grown to be A$595,000. I was also able to achieve more than 100% return a my cash-to-cash basis, within a 9 months period, against my 20% cash deposit upfront.
5. Such is the beauty of development profits and immediate capital gains by the newly developed properties, that Michael Yardney is talking about.
6. I then increased my borrowings from A$333,408 to A$440,000 with St.George Bank, and transferred out a total of a nett A$100,000 in cash into my bank Account to fund my own living expenses and to further invest in more properties.
7. As the equity and bank borrowings is not treated as income, I pay no tax. Thus, I was able to fully use the A$100,000 cash to fund my living expenses and for my further property investment for 2004.
8. With this, I further acquired 2 more pieces of vacant land at the same Anchorage Estate in Rockingham WA 6168 at a total cost of A$231,000, without the need for any further cash deposit upfront, on my part. This is because I was able to use the A$100,000 additional loan from St.George Bank, to pay for the 20% cash deposit for the 2 new vacant land purchases. The remaining 80% loan for the land purchase came from La Trobe Bank. Both the land purchases were successfully settled in July 2004.
9. Upon the land purchase settlement, the land values have further increased. Thus, La Trobe was able to further lend us another A$284,000 for the 2 house construction.
10. To facilitate my cashflow management, I deliberately staggered out the commencement of 2 house construction by some 4 months intervals.
11. In January 2005, the 1st 2 properties were revalued for A$650,000 and I was able to get another A$32,000 loan to fund my living expenses and for property investment/debt servicing purposes, in addition to my rental income from the first 2 properties.
12. The house construction for my third property has now reached the Lock-up Stage and due for Practical Completion before the end of June 2005. Upon its completion, I expect the bank valuation for this newly completed house to come to no less than A$365,000, about A$100,000 more as compared to its basic investment costs of A$264,349… I will then draw out the newly found house equity to finance the completion for my 4 fourth property in October 2005.
13. Likewise, when I completed my 4th house in October 2005, I will repeat the same process, increase my borrowings again to fund my living expenses and new property investment again… Get the general drift and process?
14. What are key critical elements in this strategy? Personally, I have identified them to be as followd:
a. Buy vacant lands to develop in a fast-growing suburb. Beside the usual 20% developers’ profit margin and immediate equity growth upon each house completion, I also enjoy fast land appreciation values, thereby enjoying extraordinary capital growth for my property investments.
b. the capital growth from my properties must far exceed the interest rate which I am paying on the housing mortgage. Thus, the average 5 year annual for the targetted suburb should not be less than 10%p.a.. As in the case for the presentlly chosen Rockingham suburb, it averaged around 15.6% p.a.
c. I must generate sufficient income for the banks to continuing lending more monies to me to support my increasing property portfolio size/value.Alternatively, I can slow down on expanding my property protfolio and allow sufficient time for my existing properties to accumulate more than 20% equity before further re-investing. If neccessary and as a further althernative, I can also sell off one of the existing properties, though I will prefer to sell it during the property peak period.
d. I must however, continue to further re-invest the bulk of newly found house equity and the bank borrowings into more property investments/house developments, rather than to fund my own lifestyle choices, at this early stage of the game.(At a much later stage when I grow to be as big a size as Michael, I guess I will be able to afford this life option subsequently.)
e. I must also have sufficient bank facilities on standby to cushion/finance against any unforseen expenses/cashflow problems. As a good guide, a minimum of 10%-20% of the property portfolio total value can be set aside as a standby reserve fund for such contingency purposes.
15. I am now learning to walk my talk/belief and bring it into a successful reality in the near future. I am personally confident that both my wife and I should be able to achieve our financial freedom by 2016, if God be willing
16. If I am able to succeed in this manner, then I an certainly sure that Micheal Yardney’s strategy will definitely succeed too, as the same basic investing principles/process are being used.
17. As I am presently living off the equity, with a much smaller property portfolio as compared to Micheal Yardney, my risks are thus higher, as compared to his, using the same investing strategy, to live off our house equity.
18. I have also known of some real people in Perth, living off comfortably on their yearly property developments profits, year and year for the last 20 years. Today, he is a still quiet and non-assuming multi-millionaire, quietly acquiring vacant land plots to build their houses from time to time.
regards,
Kenneth KOHDear HotRod,
1. Personally, it’s part of investing in myself and keeping myself updated on my own property investment educuation. I am also there to meet/interact and network with like-minded people and to learn from one and another through our respective real life experiences in property investing.
2. At the end of the seminar, I come to this conclusion: believe in myself, my own research work and my own working strategy which are producing good quality results. I now have 5 properties in Australia, 2 in Singapore and 1 in Malaysia, totalling to more than A$2.75 million portfolio.
3. Each one of us will have to develop our own niche for success and our own unique investing strategies, given our own unique personality anbd specific differing circumstances and resources available for property investing.
4. Both the Capital Growth and Positive Cashflow Approaches towards property investing have their own advocates respectively and who are more comfortable with their own investing approaches. The key is the investing success and what really works for each one of us and replicate it over and over again.
5. Thank you.
regards,
Kenneth KOHQuote:Originally posted by Pegasus:I also attended the master class in Perth, and would also like to extend my thanks to Steve and the team. The day was time well spent and interesting, but I was disappointed that the focus had moved from positive cashflow properties as such. It is my understanding that these are still hard to find and that Steve and co. have moved away from this focus, although he dodged a little every time this was asked! What were other people interpretations of this please?
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Dear Pegasus,1. Have you wonder why Steve is “dodging” the “Positive Cashflow Properties” focus as you have claimed?
2. To me, a Positive Cashflow property can easily become negative gearing once there is an increase in the house price and its rental yield fail to catch as such.
3…Will you not welcome a price increase for your house as such? Then, ask yourself again, what’s wrong when the same initially Cashflow Positive property becomes negative gearing as a result of the house price increase and correspondingly suffers a percentage fall in its rental yield rate, all other things being equal?
4. If you are presently pay taxes for your employment income, why would you not welcome some tax rebates from ATO as a result of your property investing activity and the new negative gearing position, especially if the tax offsets/”loss” is largely due to paper loss as a result of the building and fittings depreciation, rather than a real negative cashflow position?
5. For your considerations and further comments,please.
6. Thank you.
regards,
Kenneth KOHDear All,
1. I have also attended the Perth Masterclass yesterday.
2. Beside this forum at PropertyInvesting.com, I will like to invite our members and fellow participants to consider visiting similar property investing forum at http://www.somersoft.com.au/forums, whereby both the positive cashflow and the capital growth approach of property investing are being discussed in order to have a balanced views towards property investing in general.
3. Both the approaches have its own place among the various members. What is important is for each one of us to learn to develop that unique “niche” for our success in property investing, given our own unique talents, personality and investing circumstances and constraints.
4. Cheers
regards,
Kenneth KOHOriginally posted by solomon:My wife & I have looked at well over 100 properties in the past 3 months, have put out over 10 offers & 4 written offers and they have been realistic offers not even 15% below market value. Anyway, the thing is not one has bitten, the market is getting even hotter. I’m seeing properties sell before the first home open just like it was 18 months ago.
Properties that need over 30K spent on them are going for the price that they would if already renovated.
Do we sit tight and pray for the market turn-around or jump in for the last 12-24 months ride?
Perth investors with experience, what would you do?**********************************************
Dear Solomon,Do your due diligence and get investing soon. There is still more growth for the Perth property market to come over the next 3-5 years, very much unlike the property markets in the Eastern States.
regards,
Kenneth KOH.Originally posted by wayne b:[blink]For those who mentioned Hamilton Hill, Spearwood, Coolbelup & Hilton, I did survive my childhood there. Good luck [biggrin]
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Dear Wayne,What’s wrong with these suburbs, may I ask?
Please tell us more.
Thank you.regards,
Kenneth KOHOriginally posted by Rigby:After spending the last three weekends studying the Perth Real Estate Market and driving from Manurah to Clarkson attending Home Opens in frustration trying to find a +CF property I am convunced that the only suburb in Perth that comes close to goving a +CF return is Armadale.
A $140,000 house in Armadale generally will return a $160 p/w rent. The vacany rate in Armadale is less than 1% and the State Government is investing in Armadale by building new infrastructure such as new train station, Tonkin Hwy extension, cinemas etc, etc. Although the rental return of $160 for $140,000 is not fantastic it was the best I could find! I also believe that Armadale will grow in Capital due to the new infrastructure. What are your thoughts?
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Dear Rigby,
Have you checked the past growth rate for Armadale? I was told that one can easily go backwards investing in this suburb, despite its present +CF. Your present +CF rental yield can quickly turn neutral or -CF if the house prices will be gone up soon, as one can expect given all the expected development work there.regards,
Kenneth KOHOriginally posted by Rigby:Medina near Kwinana has 3 x 1 houses for 130k. The new rail line will have a station near Medina and its between Freo and Rockingham. Any thoughts?
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Dear Rigby,Despite its past good growth in 2003/2004, Medina is a low-cost, affordable housing area.
Cheers,
Kenneth KOH
