Forum Replies Created
Yessss
Here is the link to the post.
Bit long winded but as I recall it details the Gtn purchases:http://www.somersoft.com/forums/showthread.php?t=21333
kp
Originally posted by Dr.X:Just wondering why the people in the mentoring program don’t want the help of others?
Supposedly, they are doing the program becuase they need help with investing!
I didn’t do the program because, I am at a level where I “think” I know what I am doing!
Wouldn’t it be more advantages for them if they allowed the contribution by the more seasoned investors on this forum?
Sticking to their own group is almost like the blind leading the blind!!!!!
Are you serious Xenia ??
They’re getting all the help they need!!
Well, thats what they paid for….innit ??kp
Has she had experience organising finance for Hybrid Disc. Trusts, as well as lo doc and no doc finance as well ?
I need a really experienced and clever broker in Perth or else I will have to resort to one of the better guys over east.
kp
I cut and pasted the following from another post ( in case it does not make sense)
Gee I hate to butt in as I know nothing about NZ, but how does 7.5% equate to a good return.??
I mean, what are the interest rates currently ??For what its worth, I am still buying in Oz where I can get a rental yield of 12% on residential, with an investor achieving around 8.5% yield on their investment.
On top of this it is possible to get an instant cap gain of $70k to $100k per property.
Of course this takes a bit of creating and thinking outside the square, but its nothing special.
We are building houses on vacant land and packaging them up for investors to do the same, or to buy the finished product.I can’t understand the attraction of going over the NZ or the US to chase pos cashflow property, when you can do the same in your own backyard.
Yes, I have visited the US, yes its a nice place to visit,no I would not want to live there, and no I wouldn’t want to buy over there..I don’t see the point.kp
So basically, obviously this is a mining town, the market of which I have been observing and investing in, for the last 4.5 yrs.
Prognosis is that there is another 5 yrs of growth based on curent demand ( I am out in 12 to 18 months anyway)So Jon,its a bit out of the way, but I would include Karratha and Port Hedland on your list.
kp
I would suggest that you are about two yrs too late.
Check out the post on Somersoft by Karina who has been buying for some time in Gtn. by remote control from Sydney ( I don’t think she has ever been to Gtn.)
I’ll see if I can find a link.There were heaps of eastern states buyers in the Gtn. market a couple of years ago, and they have enjoyed very healthy cap growth.
A workmate bought a quad site last year, and even though he has had delays in getting the construction under way, the block has doubled in value in the meantime.I pass through Gtn about 3 times a year on my way up North, and there is no denying that the State Govt is spending up big on infrastructure,which will enhance the town.
As well as new mining ventures going ahead inland that will use Gtn as the port for export.There is no reason that there will not be further growth in the market, but I would still suggest that its had its best growth in the last two years.
I’ll go find that post now…
kp
Gee I hate to butt in as I know nothing about NZ, but how does 7.5% equate to a good return.??
I mean, what are the interest rates currently ??For what its worth, I am still buying in Oz where I can get a rental yield of 12% on residential, with an investor achieving around 8.5% yield on their investment.
On top of this it is possible to get an instant cap gain of $70k to $100k per property.
Of course this takes a bit of creating and thinking outside the square, but its nothing special.
We are building houses on vacant land and packaging them up for investors to do the same, or to buy the finished product.I can’t understand the attraction of going over the NZ or the US to chase pos cashflow property, when you can do the same in your own backyard.
Yes, I have visited the US, yes its a nice place to visit,no I would not want to live there, and no I wouldn’t want to buy over there..I don’t see the point.kp
At first I was thinking “Great…start a quarry, theres dollars in limestone blocks….’
I have built a few in Perth with spec builders.
The worse one I had was where the builder did the siteworks and laid the slab, then discovered that the sewer line was to the front of the block and that it was uphill!
They suggested I needed to install a pump, etc to make the sewer system work….
Bottom line is that they redid the siteworks ( filled the block )and redid the slab…at their expense.
I wonder how many places have a double slab ( extra one as a foundation?)As the builder is responsible for site works, I would agree with you that they should have advised if the placement of the house was inappropriate for the block.
In terms of action, I would handball it back to them….get them to fix it at their expense.
Sounds like it could get messy though….
kp
You don’t always have to buy off the plan as a non resident.
You can buy vacant land and build.
You can buy commercial, industrial, and farm land.It is possible to buy in the name of an Aus registered company, but if you are buying established residential, and the company is investigated, they may prosecute on the basis of attempting to bypass FIRB regulations.
kp
Is the proposal for him to buy one as a passive investor, or is he trying to sell it to you?
If you wanted an opinion from someone who prefers to build and therefore capitalise on the difference between cost and market price, I would say, do your own.
On the other hand, if you are a passive investor who does not want the hassles and headaches in going through the building process with the attached delays, it may be a reasonable deal.
I would question the rent return at $250pw, when that is apparently what a new 4×2 will get in the surrouding suburbs, and be wary of having a strata in such a relatively large complex, but thats just me.
kp
In fact it goes beyond that.
You also have to commence construction within 48 months, and cannot resell the vacant block.
Also the planned dwelling has to be vetted by the developer before it is submitted to the council for approval.So the conditions are pretty onerous, to ensure that the blocks are not held as vacant land for too long, and the standard of construction has to be up to a certain spec. before it is approved.
kp
I have been away for the last 10 days so have only just seen all the replies…thanks Qld007 for the good suggestion.
While I was away, I did attempt to get an opinion from someone who I thought would be an expert ( solicitor) but to no avail.
There are two parties to the deal.
The local buyer who has first right of refusal to buy a block, which will have a stipulation that they will have to build within 24 months.
(It is still not clear how the developer will enforce this requirement and screen offers to ensure they are ‘local’ buyers.)The other party is the investor, who wants to secure the property, and finance it, and build to either keep and rent out or resell upon completion.
So the problem is one of transfer of ownership to minimise costs such as double stamp duty, etc. and also to find a way for the investor to be able to finance the purchase, when it is not ( initially) in the investors name.
The local buyer can’t/won’t be able to finance the purchase.The company arrangement sound reasonable, albeit at a setup cost of approx $1200 per shelf company, and the potential complication of triggering cgt when the shares are transferred…
Now sounds like I need to speak with an accountant regarding the Pty Ltd arrangement..
In WA you are still able to make an offer on a contract ‘John Doe’ and/or nominee, so it is possible to slot the Pty Ltd in as the nominee purchaser.
This may well work…..Thanks all for the input..
kp
Geeze, I’ve been away for the last 10 days and missed all the excitement over this post.
Good to see so many ppl got in.
I took some pics too, but all I got was a big sandpit, with dozers and water trucks going round and around.
Ausprop, how did you manage to stand on your block ( and how could you identify it ??)Maybe I was looking at the wrong sandpit…….
kp
Heck, you didn’t expect it to come for free did you ??
Look on the bank as your friend that allows you to leverage into property/ies.
They need something in return for this favour.Maybe look at the bigger picture ( and therefore the smaller figure)
Thre rent and tax savings will offset the repayment / interest and other property expenses.
Look at this number instead ( and hopefully it is less than the $650 you are currently focusing on !!)
kpGeeze Wayne,
Have you driven through Carnarvon lately?
For the life of me, I can’t see what the attraction of the place is….canal blocks or no canal blocks.
They don’t even have a Maccas…..
Last time we drove through, it was just on dark, and the place appeared to be deserted.Wonder where all them townsfolk were hiding ?? probably in the banana plantations I guess.
kp
Hmmmmmm….
Now you’re stretching the friendship.Why not just issue a receipt out of a ‘receipt book’ bought from the local newsagent or stationery shop?
Otherwise, type up a doc on word to this effect:
Heading: ‘Security Bond Receipt’
Received from < John Doe > the sum of $xxx.xx being for security bond for the property at < address > rented out for the period of < commencement date > to < completion date >Sign it and pass onto the tenant.
Its better if you open a seperate account specifically for the bond ( thats been my experience anyway…)
kp
How dare they !!!
What do they think…they have rights???Seriously, the tenant is entitled to a receipt for the bond, as well as for the rent they pay.
In WA it is possible to open a ‘bond’ account at a bank and lodge the security bond there.
If this is possible, then provide the tenant with a copy of the credit statement for that account.
Usually the account is opened in the landlord’s name ‘as trustee for’ the tenant.
kp
I guess its best described as a strategy to buy a property with the intent to immediately resell it for a profit.
In the case of a vacant block of land in a new subdivision, there is quite often a delay from when the land is released, to when the title is clear and available, for you to settle on the block.
Quite often the price of the block has increased, sometimes considerably, and by ‘flipping’ or reselling it, you take that profit at settlement.
Usually, the settlement to the next purchaser occurs concurrently when you are due to settle on your purchase, thus you do not have to fund your purchase, instead you collect a cheque for the difference.
If you bought with the intent of flipping at settlement, you are in fact speculating.
Its easy to get burnt if you buy too many with the low initial deposit ( sometimes $500 or $1000 with the balance due at settlement)on the hope ( and prayer) that you can onsell for a profit before settlement.
If you are not able to find a buyer, or sell for a profit, you will then be faced with the prospect of having to finance and settle on all those purchases.
kp
Originally posted by redwing:Hi KP, Marisa etc..
How ARE you affording all these blocks???
Are you “flipping” a lot of them, how about costs incurred etc??
REDWING
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Hi Red,
I can’t speak on behalf of the others, but I haven’t flipped a single block yet, and its not my plan to do so.
I am buying with the intent of building on these blocks, and the apparent cg on the vacant blocks in the meantime, is just a bonus imo.There has to be some ‘luck’ in all this as well as some of the blocks purchased in the last year have gone from $85k to $155k.
It is easy to find a lender who is willing to lend to 80% lvr of the ‘market’ value with a sworn valuation in place.
This has allowed me to refinance those blocks and recover my deposits, to use for other blocks.This is easier with delayed settlements where there is a good chance of the blocks appreciating in value before titles are issued.
As far as construction funds are concerned, once again lending to 100% of construction cost, based on the total lend being within 80% lvr of the final market value of the property.
Cashflow crisis ????
I have to admit, although I do not flip blocks, I do sell property upon completion, and this has resulted in a ‘buffer’ account which is used to cashflow the holding and borrowing costs.Its not a strategy which is sustainable forever, but suits atm to make hay while the sun shines.
kp
If you want to vary the percentage ownership, you purchase as ‘tenants in common’ and stipulate the percentage each party is entitled to on the contract.
Also allows for that percentage entitlement to be willed to another party other than the other tenants in common on the contract.You are also correct in that ‘joint tenants’ allows for automatic transfer to the other party upon the death of one tenant, and usually assumes 50/50% ownership, although I think this percentage ownership can be varied, but must be noted on the contract.
kp
