Forum Replies Created
Hang on for a minute. The cosmetic industry makes billions and billions of dollars every year from selling products that don't work. Should ASIC shut down all the cosmetic companies too? What about the weight loss industry? What about Lotto – should that be legislated against too? After all, the television adds suggest that if you buy a ticket in Lotto you could win it yet the chances of winning lotto are far smaller than the likelihood of making money from attending and applying the principles taught in several property investment seminars.
Property investors attend seminars of their own free will. The majority of us are not silly enough to believe that you can really control $50M in property with no money down. If people get "sucked in" to believing the hype then they have to take some responsibility. Most people who buy properties from seminars and lose money on the deal do so because they don't do their own due diligence. And there is no excuse for that.
I agree that when "spruikers" deliberately steal money from people there should be some ramification but for the large part, if people to choose to spend their money on a product that suggests an unrealistic outcome then they really stop trying to blame everyone except themselves.
I spent 5 years at Uni and several thousands of dollars getting a law degree. Yet when I finished I was working with a bunch of miserable people. I was the ONLY person working as a lawyer that I knew who didn't hate it. Should some regulatory body step in and ensure that the Unis offer some money back guarantee if you hate your profession at the end? After all, they are advertising their courses with young beautiful happy faces. I can tell you, I didn't see very many young beautiful happy faces at any of the law firms I worked at! I saw pasty, chunky, unfit 20 – 40 something year olds who worked 16 hours a day.
Do we really want to live in a world of Big Brother where everything we do is watched over by someone to make sure that no-one will lose money over a deal? The whole advertising industry would shut down.
I remember hearing a saying a long time ago that was something to this effect. "If all the money in the world was divided equally amongst every person in the world, within a few seconds some people would be broke and other people would be millionaires".
Cheers
K
Hi Eli
They are in Ballarat in Victoria. Thanks anyway though.
Cheers
K
While there are forclosures (known as mortgagee sales) in SA, there are no real bargains to be had. Once upon a time banks would sell properties for whatever they could get for them but now they are obliged to get at least 2 – 3 independent valuations and take the median price as reserve. This means that there is a reserve for all mortgagee sales in SA at least.
It is useful to look at the websites with Public Trustee and Mortgagee Sales on them but, as I said, there are no real bargains out there (unless you can find an unintentionally undervalued property out there). In my opinion, a property with 2 – 3 valuations is more likely to be accurately priced than a property listed with a RE Agent who doesn't know the market very well.
Do your research on the area you like and you will soon find out what houses are going for and will be able to spot a bargain if it comes along. I would bet that it won't be through a mortgagee sale though.
Cheers
K
"Seriously, you're not equating professional courses and university education with real estate investing seminars? By volume, the latter are largely comprised of mediocre content, ra-ra performers and are closer to Amway presentations than to lectures."
Let's see … I spent five years at uni getting a law degree and my lectures were, by large, filled with mediocre content and ra-ra performers. I learned how to tell the lecturers what they wanted to hear and how to cram just enough information into my head to vomit it all out in an exam and promptly forget it.
I now make far more money in real estate than I ever did as a lawyer. I believe that education is a large part of any profession. I spent 5 years at uni, costing me well over $5000 per year. I see no problem at all in spending money on seminars to boost my investing strategies. If I spend a couple of grand at a seminar and decide that a particular strategy is useless to me, then it is money well spent.
Hey Badgers, tell us about how successful your investing has been from reading books and not going to seminars. I can tell you of at least 10 people I know who have become successful property investors from the application of strategies taught at seminars.
K
Depends what you want. Do you want cheap or do you want good?
K
And that, Nucopia, is exactly the reason I suggested that Zebulan hold on to his properties if he can. He/she may just end up in a similar situation to you.
Cheers
K
Hi again Zebulun
I think you need to decide what helps you sleep at night. If you are an agressive investor (and I am the first to admit that I am one) then by all means increase your LOC to cover the shortfall. Ten-burner is right – your entire property portfolio only needs to increase by $90,000 over the next three years and you will have covered your debt.
If, however, you are risk adverse and don't like high debt levels then it may be worthwhile offloading a few of the poorer performing properties to free up some cash.
Do what makes you sleep at night.
Cheers
K
Let them start legal action. I think they are just bluffing. If yours is ahead of their with IP then you should get the trademark.
The initial statement of claim from them will set out why they think they should have the name. Once you have read the statement of claim, decide whether you want to contest it and, if so, go and see a lawyer.
Cheers
K
Where is the property?
Hi Ozboy
I HAVE grasped what you are saying. What I was saying was that it is quite possible that a credit check would disclose a desposit bond (whereas putting up the deposit yourself would ensure that it wouldn't come up on a credit check).
Make sure that the state you want to buy in doesn't have double stamp duty. In VIC and NT at least, you do have to pay stamp duty even if you flip.
Cheers
K
Hi Zebulun
Welcome to the forum.
Can you afford the $30,000 pa outgoings? If you can, my advice would be to hold on to the properties. (In fact, if you can't afford the outgoings, get a LOC to fund any shortfall). I think that this is a great market to be holding an investment property. There is a desperate shortage of rental properties just about everywhere, and, provided they are quality properties in a decent area, there will no doubt be an increasing demand (and subsequent rental price) for your properties.
The rising interest rates are slowing down the demand for new housing (I know, because I build houses and the demand just isn't there). The obvious implication of this is that the first home buyers, who would normally be looking to buy are instead renting and holding out until interest rates come down. Petrol prices are going up and low to medium level income earners just can't afford to buy properties. So they rent. And demand for rental properties increases. And hopefully they rent your properties. Actually hopefully they rent my properties, but when mine are all tenanted, hopefully they rent yours!
Speak to a good mortgage broker about getting a LOC to cover any shortfall.
Cheers
K
Hi Ozboy
I'm not sure whether a deposit bond will come up on a credit check but if you were able to come up with the deposit yourself, you could absolutely do what you want to do.
As to whether it is clever or not, I would caution against it UNLESS you are a very experienced investor and intimately know the market where you want to buy the new property. How do you know it will go up before settlement? Is the property substantially undervalued now? What if prices don't go up and you have to sell the property at a loss? Could you afford to do this or would you have to sell the established property to offset the loss.
In this market I would urge you not to speculate unless you really know what you are doing. There is no guarantee that prices will go up. You will also have to take into account stamp duty ($25,000 approx depending on what state you are in). That means that the price will have to go up by at least $30,000 for you to break even.
I am a relative newbie to investing, although I have done an incredible amount in the last 4 years. Being new means that I have only ever seen the up side of the market where properties increase. I was talking to my mentor the other day who has been investing for 40 years. He was talking about the times where the market doesn't go up or worse, it goes down. I haven't seen that market yet and I am positive it will come sooner or later.
I think you really need to ask yourself whether you can afford to lose money on the deal. If not, then don't speculate.
Good luck
K
Hi poordeveloper
Given that the house is in a premium location, I would be wanting to get the best tenants I could and that would mean adequate heating and cooling. If I was renting in inner suburbs I would expect that at a minimum.
Reverse cycle splits should to the job though.
Cheers
K
A company signing a property contract when it has insufficient funds to complete is considered insolvent trading and an application can be made to ASIC to place the company under administration.
A company signing a contract to buy property when it has no intention to do so could arguably be considered deceptive conduct but it would be difficult to prove that it did not intend to buy the property at the time it entered into the contract.
My advice (as a lawyer) is to get your conveyancer to send the purchaser a "notice to complete" which means that the purchaser has to proceed to settlement within x number of days. If the purchaser can't settle, keep the deposit that they paid and move on. Pursuing any legal action will be very expensive and unlikely to get you anywhere and in the meantime your property will be off the market until the legal action is resolved.
You could try to force the purchaser to proceed with the purchase and try to bluff them into thinking that you will start legal action but I think the best thing for you to do is to terminate the contract, pocket the deposit and put the property back on the market.
Bummer for you though. I hate it when that happens.
Good luck
K
Hi Troy
I haven't read the article but I have read all the outcry over it! The article is just an opinion, albeit the opinion of a very experienced and well respected property researcher. I agree with what the newspapers have said about what Ryder has said about Mt Isa, northern suburbs of Darwin and Katherine NT. I did own property in all those places but sold them all in the last two years because they all have artifically inflated prices and low returns for the risk that they are.
I don't know the reasons why he has said not to buy in Lyndhurst but if you have not committed to anything yet, it might be a good time to step back, read why Ryder says to avoid Lyndhurst and think about whether that applies to your potential property.
If you have committed and you agree with Ryder then you have a couple of choices; get out as soon as you can (even if it is at a loss) or make your property stand out so that it is a desirable property in an undesirable area and people will want to rent it out.
One thing I can assure you of though is that Ryder's reports do affect the market. He is very influential and his reports are widely referenced. This report too will no doubt affect the market but I don't know which way. Either people with properties in those areas will sell out and prices will drop in those areas or investors will think that prices will drop so will all flood in to buy there hoping for further artificial inflation of prices. Either way, I'm sure that if you look at the property prices in the named towns in 12 months there will be an above average change in prices.
From what I gather, in some areas Ryder talked about crime, social problems and pollution being main reasons not to buy there. To me, that would influence my decision as to whether I wanted to live there, but you have to remember that people will need to live there because that is where they work, so they may well still be good investments because there will be tenants (who may read the report and decide not to buy there but just rent, thereby pushing up demand for rental properties, increasing rental returns).
I think I may have given a very convoluted response but I have an 18 month old sleeping and squirming on my lap while I type!
I guess what I am saying is
1. read the report (not just the newspapers comments).
2. take it all on board because Ryder is a very experienced researcher
3. decide whether you agree or not.
4. Go to Lyndhurst (if you don't live there already) and look around for yourself and ask questions of the locals
4. If you don't agree with Ryder just continue on with what you are doing and feel confident with your decision to invest there
5. if you do agree, then try to make your property a point of difference that tenants will want to rent.Good luck
K
Hi there
PM me the details. I may be interested.
Cheers
K
Hi Rhys
No you don't. Great, isn't it?
K
Why do you want to do this? What is your line of reasoning?
K
Hey Amber
I use Susan Banks from Specialised Business Solutions on 07 3221 1100. She is excellent. She is in the Brisbane CBD.
Cheers
K
Hi Manana
Once your new house is built you can choose which will be your PPOR. The property that you think will have the most capital growth should be your PPOR. In most circumstances this will be the new house.
Speak to your accountant before you make the election.
Just a note to the posters in this topic about making a PPOR an IP and then switching back, yes you do have to live in it from the time you purchase it for it to be claimed your PPOR. If you rent it out for a year and then move in the Capital Growth during that year will have CGT consequences for you when you sell it. As to declaring deductions on interest and expenses, these deductions can only be claimed for the period that it is being rented out. You cannot have a property as your PPOR for 5 years, then rent it out for 12 months and claim all the interest and repairs for the whole 6 years as a deduction.
And you don't have to move back into the PPOR to claim the CGT exemption. As long as it has been your PPOR from the time you bought it and you haven't used it as an IP for more than 6 years (or 5, it's late and my brain is not working so well) you are entitled to the CGT exemption. If you haven't bought another PPOR in the meantime then the original house is deemed to be your PPOR for the whole time.
CHeers
K
