Broken Hill has been in contraction since the GFC albeit slowly, however, that may well accelerate as the commodities boom comes to an end. The investment opportunity in Broken Hill was a decade or more ago. When a towns major employers are the health sector and retail you have to ask yourself ‘do you feel lucky?’
Hi there, i have just seen an old post for investing at Broken Hill, as I was also looking at BH for my next investment. I am from WA so it is my 1st time looking interstate.
Can I get your thoughts people, on the following.
i am considering and comparing investing here to perhaps that of a wa mining town – Karratha and surrounds? Any thoughts? It would also be a buy without viewing if it is BH.
i need low risk and money in my pocket each week. I can’t afford for potentially high vacancy rates, due to cf.
Also, I have approximately 90,000 in Super, and wanted to consider smsf? I believe it is costly to set up, but can someone advise on how it works. Ie as it is a Superfund doing the investing, would I still have access to the +ve CF? or would i need to let it build up again and use as a deposit for another IP?
I also have my ppor valued at say 490,000 and one IP valued at say 400,ooo, with loans of 635,000. Equity therefore of 255,000. Is it better therefore to use my equity here or go the smsf?
We have a household income of around 100,000 PA so would hope serviceability isn’t an issue…
Thanks heaps for the insightful advice. I decided to hold off on making an offer on this one (numbers didn’t quite stack up) though I’ll certainly be using some of the tips above for future offers:)
cheers
Wayne
Make offers anyway but with a price that makes the numbers work. It’s how you learn to negotiate. You get to see how and what agents and sellers react to. Every offer regardless of how far below asking or how it turns out will teach you something.
And if an agent tries to tell you the seller won’t accept an offer just tell them to present it anyway.
I was having a chat to a guy just the other day who happened to have purchased a property where I knew the previous owner quite well but hadn’t seen for years. He made an offer to the agents who put him off. He eventually went direct to the owner and had a full and frank discussion offering substantially below asking. The owner had to insist the agents present the offer (he was a gambler holic and in deep %$#@ with the bank who were threatening foreclosure) so he could accept it (agents had the contract to sell so he couldn’t cut them out). We believe but couldn’t prove the agents were setting him up for a significantly discounted price but the purchaser would be one of the agents or an associate.
Lowballing is an art and some buyers specialise in it but you need to learn the drill.
Some members are being pretty rude on this thread.
That’s why this thread is here for: To point out issues members are having and not complaining like high school children.
LOL …Pot Kettle Black
We’re in an experiment. We have amatuer IT enthusiasts trying to figure out how to make an open source platform with third party plug-ins work while trying to maintain a functioning forum.
What you and McNight fail to realise is that the members of a forum, regardless of who provides it and their motivations, invest considerable social capital, time etc in its identity, atmosphere and ultimately its usefulness.
McNight thinks we owe him something because he’s provided a platform for social interaction. He has no respect for this audience or any other. He’s a My way or the High way, like it or lump it kinda guy. He wants civility and understanding shown here but by his actions ignores those very attributes. He disappears when challenged and tries to silence those who criticise him by arbitrarily deleting accounts.
McNight would be better off learning to apply the more appropriate leadership style for this particular task. We might actually end up with a functioning forum platform for once.
The Authoritative Style:
Authoritarian leaders are also known as autocratic leaders. They provide their expectations very clearly as in what needs to be done and how. But researches show a lack in creativity in an authoritarian leadership, as the authoritarian leader makes decisions independently with little or no inputs from the group. The detrimental aspects of this leadership style viewed are being bossy, dictatorial and controlling to the core. This leadership style can be used at its best in situations when there is very little time for group decision making or when the leader is the only knowledgeable member of the group.
Traits of an authoritarian leader:
-Rarely lets the members of the group to make decisions, because he believes that his expertise and experience makes him the most qualified
-Regards his views and thoughts to be the most accurate
-Found to be very critical when taking decisions and opinions that are different from his own
-Not certain about the abilities and potentials of others
-Seldom gives an encouragement or recognition for work done well
-Takes the ideas of others only if he agrees or accepts with them
-Benefits from others often
-Highly competitive and action oriented
The Consultative Style:
Consultative leadership is basically task oriented and always focuses on the end result by using the skills of others in formulating plans and taking decisions. But then the final decision making power is always retained with the leader. But still, that final decision is not arrived at without looking for inputs from the members who will be affected by the decision. The consultative leadership stands out through its attempt to involve people who have problems in seeking ideas for the solution. This way, it helps those to develop leadership and decision making ability in them. Team building is a prime target in Consultative leadership.
-The leader takes up the role of a mentor / player and becomes the facilitator of the team
-Usually [not always] accepts ideas and thoughts from the team even when it contradicts with his own
-Pays more attention in stimulating creativity and innovation
This reply was modified 10 years, 7 months ago by Long John.
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In summary I now believe Massland is a company who creates revenue from selling courses & dreams of wealth to suckers.
You just described ‘everyone’ selling books CD’s DVD’s seminars, courses, rare qualifications etc that has anything to do with the finance, RE, shares etc to basically the whole ‘lets get rich and be millionaire’ clique.
The problem is you can’t stop people from being stupid. How many diet books and programs are sold each year to wanna-be-thin fat people who’ll never succeed in achieving a diet plan’s goals in 10 lifetimes, or the wanna-be-10 body numpty’s who buy gym memberships only to quit after week 2 or the “I’ll-do-it-at-home crowd who buy gym equipment to store under their beds but never use.
There’s a good living even a fortune or two to be made from all the wanna-be’s out there. Moral?? Ethical?? I gave that type of usury away many years ago. My conscience wouldn’t let me flog stuff that was arguably beneficial to some poor schmuck and his family but who could neither afford it nor would ever have the smarts to employ it effectively when they had at that time more pressing issues that needed attending to.
There are some in this game who would take your last $1 and not bat an eye. All under the guise of ‘helping‘ you.
Fredo to get an opena nd shut answer you first need to ask a question!
The question is implied. You’ll have to do a refresher in mind reading, anticipating questions and reading between the lines. I thought you legal types were good at that sort of stuff ;-)
As I’ve alluded to many times China’s boom is over and it’s now in the bust phase. How that will shake out and what form it will take is difficult to define but one thing is for sure Chinese property ‘will‘ be a leading cause of their decline.
Mr Mao said China’s house production per 1,000 head of population reached 35 in 2011. The figure is below 12 in most developed economies “even when the housing market is hot; no country has a figure of greater than 14”.
“By 2011, housing production per 1000 people reached 30 in Tier 2 cities, excluding the construction of affordable houses. A persistently high figure such as this should cause alarm,” he said.
This reply was modified 10 years, 7 months ago by Long John.
This reply was modified 10 years, 7 months ago by Long John.
This reply was modified 10 years, 7 months ago by Long John.
This reply was modified 10 years, 7 months ago by Long John.
This reply was modified 10 years, 7 months ago by Long John.
This reply was modified 10 years, 7 months ago by Long John.
This reply was modified 10 years, 7 months ago by Long John.
This reply was modified 10 years, 7 months ago by Long John.
Yes that is how I do (or did it) Jamie. I want to come on and see what posts have been made since my last visit – like a ‘active topics’ button. It takes too long to look through each different forum to find them now.
Goodluck with that. Site is actually getting worse. Under the ‘Last Post’ column the title of the thread and who posted is mismatched now.
The text view option in the text box has disappeared so we’re stuck with BB code options only. Not that the text actually worked properly anyway. When you cut and paste into it it brings html formating code with it from wherever one copied from.
This iteration would make a good case study in how to kill a forum with poor design and worse implementation.
A property crash is bad for people who have to sell their properties or can no longer afford their debt payments.
For everyone else it is an opportunity to pick up bargains.
My rules are:
Don’t borrow more than you can afford to pay the interest on your loans for 2 years using your savings while having no income coming in; and
Buy properties that will always be in demand. No matter what happens to the economy or the property market, people will need to live somewhere and pay rent if they can’t afford to buy. e.g. no luxury properties but properties that are affordable by most.
Good advice.
The problem for many though is that ‘serious‘ investors tend to have long acquisition phases in portfolio development. That invariably requires high leverage rates as PI’s try to build as fast as they can. In a high growth market that makes sense as one tries to capitilise on growth spurts before they fall back or collapse. The risk is in being highly leveraged if a correction occurs that can expose you to unsustainable market forces.
Over the past 20 years the risk in this type of fast growth strategy was fairly low but still real. If one had chosen well you could expect to see leverage drop within just a few years before pushing into the next cycle of buying. Today is much different in that credit availability, affordability, wage growth, national and state economics (and to a larger extent international economic conditions) up the risk profile substantially.
All markets correct at some point because abnormal rates of growth throw up distortions which eventually collapse that growth spurt. Distortionary forces are much larger and more powerful than they’ve ever been historically. To that extent one should be prepared for significantly bigger corrections back to norms than in the past.
As Seth Klarman from Baupost Capital recently stated:
“Can we say when it will end? No.
Can we say that it will end? Yes.
And when it ends and the trend reverses, here is what we can say for sure.
Few will be ready. Few will be prepared.“
This reply was modified 10 years, 7 months ago by Long John.
….and now here comes the crackdown on the use of iron ore to finance failing and frankly insolvent bankrupt steel mills. This will continue to push the price of ore down. It will be felt indirectly through loss of State and fed govt revenues which will translate into increasing pressure on budgets that will invariably need to be cut. Interest rates wil come under pressure if rating agencies mark down the state and national economy.
The major problem, of course, is any restriction or tightening is necessarily lowering the price of the iron ore… thus reducing the value of collateral and thus worsening credit conditions in a vicious circle as firms can borrow less and less actual Yuan against their inventory at a time when cash flows are becoming increasingly negative from demand collapse.
Which means that far from merely crushing exporters who suddenly are dealing with Chinese importers who have torn apart contracts, obviously with no recourse, suddenly China’s entire “hot money” laundering infrastructure which as explained over the weekend, has gold performing an even greater role than copper is about to collapse.
And when the counterparties of China’s hundreds of billions in CCFDs decide to also get out of Dodge and unwind these deals (amounting to hundreds of billions in notional), only to find the underlying commodity has not only been re-re-rehypotecated countless times but has been sold, then there is truly no way of saying what happens next.
This reply was modified 10 years, 8 months ago by Long John.
This reply was modified 10 years, 8 months ago by Long John.
I know some people like these sorts of jobs but having done many different things in my life time commission sales absolutely sucked. Stressful, extremely poor cashflow (and often low incomes), long hours, high expectations from employers but above all the attrition rate is one of the highest in any industry.
If you’re looking to make a dollar this is the last place I would recommend.
What he’s asking is will the bank allow him to change the status of his security from cash to land and what would the conditions/restrictions/complications be in doing that.
Hi LJ, Wow, sounds like you are having two bob each way !!! I thought you were saying it was me doing that. :p
The US and Australian markets are as different as chalk and cheese. To make comparisons and try to cross link causal affects is to not understand either market or its fundamental dynamics.
Isn’t all of your talk about a “property crash in australia” arrived at by comparing to the US crash?
Nope.
And then, there was this
National Consumer Law Center (NCLC), at least 10 states can be generally classified as non-recourse for residential mortgages: Alaska, Arizona, California, Hawaii, Minnesota, Montana, North Dakota, Oklahoma, Oregon, Washington
(The bolding was mine !!) So, if “at least” 10 states are non-recourse, that is way different to “at most” – in fact, it could mean that double that number, or more, are actually non-recourse, couldn’t it? A quick read of the “Overseas Forum” sees some members discussing Altanta and Florida having non-recourse loans – these two didn’t make your list. Could it really be “at least 20″ States after all?
Yes, I am aware the GFC trigger was more about the “AAA rated” junk notes (so-called “backed by Real Estate”) that were peddled all around the world (some Local Councils in Australia lost money over them). Add to those though the “every man in the US should be able to buy a house” message, where banks were encouraged to lend to anyone/everyone at a low honeymoon rate a few years earlier. The kicker came when the rates were due to revert from (say) a 2% loan into a 3.5% loan. That 1.5% increase was really a 75% increase, wasn’t it? With no-one chasing them over a mortgage (non-recourse) many just handed the keys back to the bank, leaving them with truckloads of houses that they didn’t want, and this MUST have had an effect on their RE market, wouldn’t you say? Probably additive to the whole GFC thing, even if not the CAUSE. In Australia, I am not aware of anyone who has a non-recourse loan – thus, if you walk away from a house, and the bank can’t get their mortgage back, the Mortgage Insurers will settle with the banks, then chase YOU down for the rest. A way different scenario. Therefore, the same laissez faire approach to a mortgage doesn’t exist here as does in many areas of the US. In summary then, I still believe the differences in the way US handles RE as a whole is so far removed from the system used here, that such a violent crash is unlikely to occur in our market. But yes, there will be ups and downs over time. Benny
Forget recourse vs non recourse. It wasn’t the cause or reason for the severity. Like I said default rates where only slightly above trend. There where warnings for years prior that the US property market was maxed out that economic conditions could trigger a collapse. That subsequently came true when the GFC hit and liquidity froze overnight. That literally took buyers out of the market overnight. That triggered a collapse that was compounded by economic conditions and still does to this day.
If you don’t think a serious correction can happen in AU your not watching the ball. Will it? Everything I see says yes. When? Can’t tell but I think its much closer than many think. How bad will it be? How long’s a piece of string? What makes me so sure? Human nature. We never learn from the past.
Long John… I have always had problems with this site… spell check would not work.. What specifically are you alluding to if you don’t mind sharing. ( I know see that spell check is auto and is working that should make me look better) this was a very vigorous site and very active a few years Ago
From a technical point of view this site has never been that great. Like you said the previous version had a lot of functionality problems that never got fixed even after many requests. This new version isn’t any better and may actually be worse. Implementation has been a disaster in anyone’s book. If McKnight ran his empire the way he runs this site he’d be broke inside 12 months. There’s a limit to peoples tolerance with these things. McKnight’s attitude doesn’t help either. If you’re not telling him what a great guy he is and kissing his hand he soon gets the pip and if you criticise him he tends to spit the dummy and chuck you out. He forgets that people come here to commune with others in the game not pay homage to his efforts. Given that this is his primary hunting ground for his product marketing you’d think he would put a bit more money and effort into providing a quality experience. He might be getting a bit too comfortable in his old age.
I was just assuming that the AU investor has turned off from the US market and I think that for a few reasons. 1. your dollar dropping. 2. Hedge funds in US buying up hundreds of thousands of homes and targeting 5 to 7% returns… thereby taking inventory from US wholesalers 3. those that still are in the Turnkey game in the US the yields have gone down substantially.. Although yields from most marketing companies and providers are best case scenarios and rarely take all expenses into account. 4. And or as Nigel so eloquently eluded to many got snookered into buying low end Ghetto houses with promises of 30% returns and not only did those returns not materialize they lost money. Then they tell friends and the next thing you know sales go way down which is what I have seen. There are still deals out there and there will always be deals in every market condition.
I tend to think the US market has run its course for the time being. The general flow of things is you get the risk takers come early adopter types who have a go first. They are followed by the herd as the first wave solve most of the initial problems then you drop into a steady flow for a while until you have maximum interest. After that you see a steady waning as market fundamentals swing against the foreign investor.
You are left with 2 types of investor after that. The early adopters who got their feet on the ground and are making a buck and the rest who got it wrong and either lost a dollar or two or who are trapped with non or poor performing properties and can’t extricate themselves without a bit of pain.
There’s also an awareness I think that the punters are becoming very hedgy now as they watch the elite pro players leave the field (such as yourself). Guys like Nigel and Engelo may actually do alright through this next phase as punters realise that employing expertise will pay dividends in an increasingly difficult market.
Can we have an option to search “just titles” too, please !! :)
This platform uses a search plugin that is both problematic to install and very simplistic in functionality. If you want to do more sophisticated searches you don’t need this sites search function. Google can do it all for you if you know how to use it.
This page helps format a search more easily for the less experienced. Note in the second block it has ‘Site or Domain’. You enter this sites domain name there to restrict the search to this site only. The other option is you become familiar with search syntax which you can enter directly into a Google search window eg;
If you do a search for Google advanced search videos on YouTube there are plenty of tutorials that will help you get your head around searching fairly quickly.