Forum Replies Created
- Originally posted by UnknownSoldier:
hi ppl
just wondering peoples opinion of this suburb for IP’s ??
now this is far from bias but i have lived here since i was a little kid 16 years ago still with parents. This town when we moved here was very nice, then it turned into an absolute drug hole but that’s all been booted and now its trendying up. I think footscray is majorly undervalued, i mean depending where you are its not even 3-4k’s to the cbd, and we are 2k’s from the biggest booming area in melbourne the docklands. Our neighbouring suburbs kensington and yarravile have a median house price of over $400,000 each and footscray is positioned around 320!
The town has a large university, footscray park, a 5min drive to flemington racecourse, a few primary schools, public hospitals, and connects right onto geelong road/princess hwy which will take u to geelong and straight down great ocean road e.t.c
The only slight downfall is the town (and this isn’t a racial slur) is very vietnamese dominated with the shops and i dont think this does much to add value or appeal to a town but this doesnt seem to stop box hill or springvale which are like over 15ks from the city and have 400-500k median hosue prices!!
Anyway it looks good to me based on the above, just wondering what do ppl with more knowledge think of it??I think these are the suburbs to be looking for. No-one seems to want to touch them (like Dandy’thong’ of recent posts), but as you have observed; the infrastructure and potential due to location is all there.
With such widespread neg sentiment, it makes the competition much thinner and more bargains to be had. Go for it if you think it’s a winner. Be the 10% not the 90%.
As a kid I lived for a while in Oakleigh (s’eastern Melb suburb), and it was a hell-hole for ever, but you can’t get in there for under $500k now for anything remotely decent.
When you start to see ‘trendying up’ going on, it’s time to pull out the cheque book. Think Yarraville, Williamstown, Beacon Cove (Port Melbourne), Richmond, St.Kilda etc, etc.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
I don’t know anyone who actually retired at 30 and gave up work.
I know several people who were wealthy enough to do it, but they have businesses they love to run and keep working for the action, fun and making more money.
Look at Bill Gates – has a few bob under the mattress, but is busier than ever.
These sort of people are driven, usually workaholics, overachievers and need a new project or to be kept busy. They never seem to retire.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Originally posted by mytch:I’m 24 with 2 properties and a business than turns over 7 figures a year, so I’m close to my goal of retiring by 25. When you own a company you make 50 times what you’d make as an employee – dividends are what make a company owner wealthy.
What is the business? and where is it?
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Originally posted by daz61:HI Everyone,
Today I went to an auction in my street,there was not 1 bid but someone had put an offer in subject to finance 465k after the auction. The home is 8 yr’s old 34 sq dbl storey,dble garage on 2300 sq mtrs Narre WarrenNth. I beleive If I spent 20 – 25k I could resell at 530 – 550k. Does this sound ok or not, if so can I claim on Interest for tax benefit & how do I set this up ? I am itching to get started but know very little.Does any one want to partner this project.Cheers
Daz [strum]This may help you decide what to do:-
purchase price- $465,000
purchase costs- $ 27,900 (6% of p/p)
reno costs- $ 25,000
selling costs- $ 12,000 (2% agent commission and $1k
legals)
holding costs- $ 17,251 (6 months interest @7%)TOTAL- $547,151
selling price- $550,000
PROFIT- $3,000.
less capital gains tax? – $1,000 (total guess; but possible)
NETT PROFIT – $2,000
I have based theses figures on the lower purchase price, the highest selling price, 6 months from settlement to resell of house factoring renos and sale campaign period, cheaper interest rate than market standard.
These figures are assuming that everything goes your way, although I’ve allowed 6 months from buy to sell and I think you will be hard pressed to sell it sooner, but you may be lucky. You may be able to spend less on renos, but the selling costs are probably higher.
In a nut-shell – it is a lot of work for a total waste of time.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Yes, it is painfully slow in all changes of pages.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Why don’t you look for an I.P that has a purchase price that will keep you under the LMI threshold, thus no LMI to pay?
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Traditionally, as a rule of thumb, most banks won’t let you borrow more than 35% of your gross wage for home loan repayments. However, I have heard of people borrowing much more than this cut-off figure in recent years, and it amazes me that lenders allow them to do it.
This figure is seen as the cut-off point for your lifestyle before it starts to suffer from cashflow problems and potential financial hardship.
So if you earn $60k per year , you can service around $400 per week in accommodation payments as an upper level.
It could probably be applied to all of the options you listed in your post, with the exception of I.P’s as there is rental income factored into the equation as well.
Most banks will look at around 70% of the rental income as a supplement to your existing income when calculating you serviceability for a loan, probably keeping the 35% cut-off in mind I suspect.
Personally, I reckon you would want to keep closer to 30% to factor in cash needed for surprises that life throws at you.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
This is a standard practice for real estate agents.
They send a letter to every house in selected streets asking if the owners are considering selling. It is slightly different to you as a private buyer, but similar and it works.
The conversion rate is low, but you only need one or two for it to be worthwhile.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Another option for you to think about –
Keep your PPoR , move out into a rental (we have done it with our PPoR after acquiring I.P’s) . This is something that many people struggle to do mentally – too big an emotional attachment to the PPoR. But if you can get past that you can accelerate your wealth creation a lot.
If you are able, rent a place for less than you are getting back in rent from your PPoR. Instant improved cashflow! You may need to scale down on the quality of the house you rent to do this, but so be it for the sake of financial freedom.
Your PPoR becomes your first I.P; all the holding costs are tax deductible. Make sure you get a Depreciation Schedule prepared to maximise your tax deductions (speak to an accountant about this).
Use a good Mortgage Broker to restructure your loan on the PPoR so you can access the available equity to buy another I.P when your serviceability allows.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
I am from Melb and know Dande’thong’ very well.
It is like any other cheap and nasty suburb around Melb that has yet to be ‘discovered’.
It has to go up sooner or later as there are excellent amenities there, and people have to live somewhere, so if you can buy in a half decent part of Dandy where there is a huge rental pool then you will do well I believe.
For example; my sister-in-law bought a house in “The Pines’ (ex-housing commission) in Frankston about 3 years ago. It is a drug and welfare haven and crime central, but her house has doubled in value and the area is improving slowly but surely.
Some parts of Dandy are not bad – some are terrible, but as the rest of Melb keeps going up this area will also follow – maybe quicker than other more desirable spots. I remember not so long ago when houses in Dandy were $100k.
The thing to remember about those housing commission houses is they are on good plots of land and can be upgraded and/or subdivided sometime in the future. Someone will start to do it sooner or later.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Originally posted by lisapearson:Hi all, another newbie here. I’ve got a question for people that have bought in regional areas – did you go and inspect the property yourself and then decide to buy, or did you acheive confidence that it was a good buy some other way? I’ve seen all the discussions here and want to investigate the possibility some more, but working full time the likelihood of me being able to travel out regularly to regional areas within my own state (NSW) is slim, let alone interstate.
What do others do?
Thanks!I have bought properties ‘sight unseen’ and did a LOT of research via internet, phone, fax and email before hand to get to know my area.
If this is your first purchase I don’t recommend it though. Make the time and make the trip to the area and do the research by foot and car. You need to learn on the job first in my opinion, just so you can buy sight unseen at a later date with the right knowledge and experience.
Read the latest book by MARGARET LOMAS – her website is DESTINY FINANCE to order the book/s. In the latest book she lists 20 ‘must ask’ questions for this purpose. Excellent. read all her books before buying anything.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
If the presenter begins to tell you how to become a property investor for only $50 per week, and you can secure your future through property investment and negative gearing, then you know that they are there to try and sell you one of their properties that they are selling on behalf of a developer.
The big ‘property secret’ is that you don’t know this.
Most of these “seminars” are the same thing – just a sales pitch for properties.
The properties are overpriced, they usually offer a ‘rental guarantee’ which is built into the price and the presenters are on big commissions which are also built into the price of the property – you are paying for that.
If you go, DO NOT sign anything or leave any details.
If you want to have some fun, stand up half way through the presentation and ask if they don’t mind if you get INDEPENDENT legal advice, finance, and valuations on the properties.
This is bound to be achieve a frosty reaction, and if they baulk at this ask why not?
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Settle down boys and girls.
One thing I noticed from the first post which may or may not have been highlighted in a private email to justme28:-
She talks about her partner’s $20k credit card debt being rolled into the L.O.C.
I am assuming it is personal debt, so because of that, I would say that if you are going to roll it into the new L.O.C or whatever loan you set up, then before you do this you must not use the credit card again, and CUT IT UP.
Again, assuming personal debt, with a $20k c/c debt it is clear that he cannot manage money well enough to keep the card after rolling the debt into a new loan, he is likely to max it out all over again and therefore should either:-
a) go without c/c’s totally (hard to do in this day and age), or
b) get a new card with a very small limit say $1,000
c) reduce the limit on the existing one to the above limit.The sad reality is that most people who roll the c/c debt into a new loan and still keep the card usually max it out again in a short period of time, but now they have 2 c/c amounts to try and pay off – the one rolled into the loan and the one on the c/c. Financial destruction is looming.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Originally posted by Terryw:Not from what I am seeing with valuations etc. One of my properties has just dropped 12% comparing a Jan 2007 valuation with Jan 2006.
Terryw
Discover Home Loans
[email protected]
Send an email to get my newsletter.How often do you have your properties revalued Terry, and what sort of cost is it?
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
“Also marc, are u doing acting in LA? just curious!”
No, WorldChanger – just acting the fool!
Actually, we are here for my wife to follow her dream of traveling as a nurse. She is doing a 2.5 year travel nurse contract, we have been in L.A for the first 18 months; one year to go! We are heading to the East Coast in June for the last 10 or so months of the contract. Florida probably.
I am semi-retired these days (I am a professional golf teacher by trade) and while we are here in the USA I am basically retired and being a house -dad for our 5 year old son. Life’s tough.
However, I haven’t been totally slack; I have written a golf instruction book (shameless plug!) which should be on the shelves around the middle of the year.
It is called “WHY DO I SLICE?” and is very different to any other instructional book on the market – it is in the form of a novel and has 2 main characters. It’s a lot of fun to read.
Maybe I can start up a golf tips thread on the forum for the golfers amongst us? Not strictly property, but I’m happy to do it if the MODS don’t mind.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Originally posted by Mal111:We are looking at buying a place in Melbourne and were wondering if the vendor has access to the deposit paid by the purchaser, or whether it must pass a certain threshold first?
If it must be above a certain threshold, who has access to the account and interest?Hi Mal,
I am from Melb and have experienced this, but not for a while.
Anyway, from memory the way it works is the agent usually approaches the Purchaser and asks if he/she would mind releasing the deposit earlier than settlement. The primary reason for this I would guess is so the agent can get his/her commission before settlement, or if the deposit is sizeable, the Vendor may need/want the funds for another purpose in a hurry.It can only be released if the Contract of Sale is unconditional, and if the Purchaser agrees. Then what happens is the agent provides the Purchaser and Vendor with a form called a Section 27 to fill out and sign.
The form is returned to the agent and after about a week the agent is allowed to withdraw the deposit from their agency trust account, and distribute the money to the Vendor and the agent.
Other than this, the deposit must stay in the agent’s trust account until settlement has occurred.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Originally posted by JaazOptm:Hi Marc
I’m a newby so if what I say is incorrect or doesn’t make sense I hope u wouldn’t mind.
I’ve read Steve’s books very recently, and from what i gathered, his definition of positive cash flow properties sounds a lot like ur positively geared property definition, and what you call positive cash flow property sounds more like a negatively geared property by Steve’s definition.
Doesn’t a positive cash flow property need to make money from day one instead of through tax refund?
confused…….
I am pretty sure the explanation for Steve’s term for Positive Cashflow is the same as Positive gearing.
You are right about my definition of the term Positive Cashflow – it is neg geared at first, but becomes positive cashflow after tax refund. Either way, the property doesn’t cost you any money from your pocket.
The critical difference between Steve’s explanation and mine is:-
– with Steve’s pos cashflow you have to pay tax as you have made a gross (before tax) profit.
– with my explanation you have a tax refund as the property is initially making a loss, but after you receive your tax refund the property is making a nett (after tax refund) profit.The other thing with my definition is that you can actually arrange with the A.T.O (your accountant will organise it) to receive your tax refund every week instead of at the end of the financial year, so you get your positive cashflow as you go – tax free!
Many people shouldn’t do this though as they would be tempted to spend that pos cashflow on ‘doodads’.
What should be done of course is invest the tax refund back into the I.P or into more I.P’s.Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Pifalls:-
too many kiwis.
(just joking)Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Hi Bug,
I am living here at present – have been in L.A for 18 months, but have not done any investing while I’ve been here.As a result, my knowledge of the finer aspects of the systems here is bugger-all, but I can tell you, as has Nigel, Derek and Chad, that there are many areas with pos cashflow, but you need to research your areas very, very carefully. For example; Buffalo – good returns and cheap properties, but little c.g, dwindling population, rising unemployment and crime and at present is clogged in snow.
There are sooo many micro markets in this country that you can’t simply look at the r/e market with a blanket approach.
The biggest hidden cost that I can see is the property tax – absolute joke. But the way it is done here is that normal home-owners get a tax concession on their PPoR mortgage, then pay prop tax, whereas in Aus we get no tax concession on our PPoR mortgage, but then don’t pay prop tax either – swings and roundabouts.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
