Forum Replies Created
Hi nseller,
we recently encountered Investor Finance in Adelaide and approached them for finance and i have nothing but good things to say about them…….only reason i say this is we had approached maybe 20-30 brokers/banks in the last 2 months seeking a ‘solution’ to our finance situation and although we’ve received many options, they were mostly the more ‘expensive’ options such as going through private lenders or 70% lends instead of 80% etc.
Then we approached investor finance almost as a last resort and wa lah…..they told us that basically what we wanted was possible and they had several lenders who was able to do it for us. You have no idea how much of a relief and how frustrating is has been to have so many people tell us there’s no way that it can be done and then find someone who says yes pretty much straight away.
One of the brokers is a forum member…..Joshua Flack…..worth talking to….again this is only our personal experience with them in the last few weeks….
although that workshop you mentioned sounds familiar, my husband went to an information night in Adelaide a few weeks ago and it was more about the franchise than about finance options etc.
hope this helps.
Cheers,
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Hey Sargeant
There’s no profit if you buy each block for $140-$150K….you’ll need to buy 1 large allotment for that price and then subdivide and build 2 homes on it to make a healthy profit. Thats if i’ve read your post correctly and you’re buying each block for $140K and building 1 house on each.
Assume 12-18 months holding costs for the council approval, subdivision processes as well as construction and time to sell. And factor in possible interest rate rises and strategies in place in case you can’t sell. I know in Adelaide one of the biggest and most reasonably priced building companies have a 12 month waiting period so need to consider this as this could significantly increase your holding costs etc.
What profit margin is satisfactory is really up to you……we evaluate each deal on a case by case basis but don’t forget that in the free audio that Steve McKnight has on this website with Martin Ayles talking about a couple of his projects, he even did one development where the return was only $30K and that was acceptable for him but may not be for the next person so it depends on what you’re comfortable with. Probably if you’re starting out, i’d aim for a margin double that at the very least to allow for being new to it all. Hope this helps.
Cheers,
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
We personally avoid auctions…….for us its worked well not buying through auctions…….. Sure there are probably great opportunities at auctions but what we’ve found is that we may do a whole heap of research and due dilligence like we do for every property we’re serious about and then go to auction and not even get a bid in.
We find that there are just as many opportunites with normal sales
hope this helps
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Hi TMR,
Just wondering what a third party lease is? If you can elaborate that would be much appreciated.
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Hey Redwing,
Information about Martin’s ‘bus tour’ in Adelaide was sent through an email to forum members about a month ago…i don’t think its advertised on this website…i only remember seeing it through one of steve’s emails asking for expressions of interest.
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
We used to ask the very same question a few months ago but hubby took the plunge and resigned in May 06 because he was very unhappy at work and we have not looked back since. For the past 2ish years, we have been members of this forum and have attended countless seminars and read 100’s books/articles on property….we still had doubts in ourselves up until a few months ago when we attended a property seminar and took away the best learning we could have….and it wasn’t the content of the seminar that impressed us it was the fact that during the entire weekend, now we’re talking over 20hrs worth of info, hubby and i walked away only learning 1 new thing and that was that we knew it all! Over 20 hours worth of great property info and we already knew it all. That was the best lesson of all because that was like a lightbulb moment where we realised that it is seriously time we stopped focusing on learning all the time and looking for deals all the time but to actually take that next step forward.
Over the past 2 years we’d hardly secured any deals and we realised why, we’d spend from 8:30am – 5:30pm in our day jobs, then come home and look for deals from 6:30pm – 12:30am but the deals weren’t coming to us? When hubby quit, we secured all the deals we wanted because of 1 difference, we actually put in an offer! Since hubby quit work in May we put in an average of 35 offers a month and as a result, have achieved more in 5 months than we ever have in 2 years.
We had the same dilemma as most in that while we still both had our day jobs, we found it difficult to balance a life with property but we did and it wasn’t easy but if you’re dedicated and have an end goal in mind, you’ll find that you’ll put in the hard yards. As mentioned, we’d spend 5 nights a week looking for deals from 6:30pm – 12:30am and then saturdays and sundays going to opens. We did this for almost 2 years.
One huge tip i’d give which had been a bit of a problem for us is if you haven’t already registered your ABN, do it NOW! We’ve had our ABN for 1.5years and its proven to be a huge hurdle for us in terms of getting finance on a low doc. If you’ll be quitting your day job and don’t have financials etc to back up the fact that you can service the loan and will need to go low doc….register your ABN asap…the sooner you do it the better….even if you haven’t quit yet.
Good luck and happy investing [biggrin]
p.s sorry for babbling on a bit there[blush2]
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
We’re in Adelaide and we think Adelaide’s a fantastic place to invest……….trying not to be biased or anything but its funny, we’ve had a couple of ‘well known’ developers come down to Adelaide to talk about property and they’re views are that you pretty well can’t make money in real estate in Adelaide at the moment and the best place to invest at the moment and in future is QLD, partly due to population growth etc. The funny thing is, we are making good money in real estate here, our friends who use a wide range of strategies be it lease options, developing, renovations etc are also making good money!
So we all have our personal views on different things but i’d probably take advice from people who are currently making the good profits from real estate in Adelaide not just rely purely on rumours and personal opinion….just a small tip [exhappy].
At the end of the day, everyone has to do their own due dillegence and be comfortable with their decisions.
What strategy were you looking to use in the Adelaide market? If you’re actually from Adelaide you should come along to our real estate group meetings which is a fabulous place to network.
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
I completely agree with you V8ghia….i don’t know why or how the 2 year ABN rule came about but its a real shame because we really do think we’re doing well for ourselves but the 2 year rule is making things 100 times harder than it needs to be.
Our development timeframes are only 12months and thats from the point of signing the contract to the houses either being sold or ready to be placed on the market as a finished home/development site so to refinance in 2 years is not possible for us.
Low Doc 70 would be our last resort but we were just hoping someone would give us a break and bend the rules for us [blush2]
What makes the whole process harder is hearing different bits of info from different banks/mortgage brokers……we go to 2 different branches of the same bank and they’ll tell us 2 different stories and requirements….same with brokers, some say one things almost impossible to do and others say they might be able to work something out for us. Because finance isnt our strong point, it just makes the whole thing a little bit confusing for us but you know what, hubby and i have taken a huge learning out of this and we wouldn’t have learnt what we have had we not been in this kinda desperate position….so we’re grateful in a way and we know that the money will be there at the end of the day even if it means that we may have to go down the path of a less than desirable loan but thats ok. Sorry for babbling on…i’ll stop now!
have a great weekend everyone [exhappy]
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Hi Richard ,
Yes you are correct…….Westpac don’t typically check the ABN status.
I will enquire about the DEF should we need to go down that path because they can certainly dimish the profit very quickly…i know RAMS DEF/early exit penalites are astranomical!
Thanks for the reminder Richard
Cheers
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Thanks for the replies everyone.
I’ve had some forum brokers provide some really good info but i’m still kinda stuck.
We ended up buying the property in my husbands name because the profit was going to be distributed to him anyway so didn’t work out too bad in the end.
But we’re still stuck in the same position where every broker we’ve spoken to has indicated that without holding an ABN for 2 years, we’re not able to get a LowDoc 80 from one of the conforming lenders. There must be someone out there…i mean, 9.5 people out of 10 that we’ve spoken to have told us that noone will lend LowDoc 80 to us with our ABN not being 2 years but we managed to get it although we had to give a little by buying in our personal name but thats ok for that small development…………..so i’m hoping the same goes for this hurdle we’re experiencing. We want a conforming lender who will lend 80%LVR LowDoc to our Company (ATF for our Trust) at a reasonable interest rate.
A couple of brokers that i’ve been in contact with through the forum said that 1 option is to settle on the land with a non conforming lender and pay that higher rate for hopefully only 3-4 months until we get council approval, then refinance on the new improved value with another bank which is an option for us but i’d like to have exhausted all other possibilites before we go down that track.
Anyone out there who has a solution by any chance????? [confused2]
Any advice would be MUCH appreciated as always [blush2]
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Yep its Westpac.
We spoke to our accountant and because we were going to distribute most of the profit from this particular deal to my husband anyway, it doesn’t work out to be too bad to buy the house in his name only apart from the fact that we won’t have the same benefits in relation to asset protection etc.
We do have others which we need to sort out now that we know Westpac can’t do it in our company/trust name without going business loan…….given the profit margin for these other developments, there’s no way we can buy them in our own names [blush2]
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Hey Geoff,
I just had the same problem but finally managed to get a hold of someone who would this morning.
CGU were able to offer us Public Liability Insurance with no probs. To give you an idea of what they quoted us, our block is approx 780m2 and for $10M premium was $610.50 and for $5M premium was $457.88.
I’m ringing around to get a couple more quotes just to compare.
Hope this helps.
Cheers,
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
If we were going to keep the house and not demolish it, we would normally put it subject to a pest and building inspection to our satisfaction. If you include something along the lines of “to purchasers satisfaction” then that should allow you to back out of a deal regardless of whether the pest/building inspection comes up ok…..we use this because often a building inspection may come up ok and what is deemed as ok by most parties however, it could be something else that pops up in the report which will cost you more money than you’ve budgeted for.
Hope this helps
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Hi Mark,
We’ve had this very question put to the Adelaide investors group many times as newbies feel more comfortable with someone guiding them to start off with but we’ve never once had a volunteer, and i don’t think its because noone wants to but moreso because mentoring is a very time consuming task to take on. If you’re after a mentor that will teach you the “how to’s” in order to do specific deals this also makes it harder because your investing goal and the mentors goal may be different hence the strategy used may not necessarily suit you best (i.e. reno, developments, lease options/wraps etc)
Having said that, the newbies that come along to the investors meetings benefit greatly from hearing other investors speak and share their stories. Also the networking that comes along with these sorts of groups is priceless!
Grossrealisation mentioned an investors group in perth, i would highly recommend going along to one of those meetings and see how you go.
Good luck and congrats on taking the first step [exhappy]
Cheers,
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Hi Rexilla99,
We sometimes use the agent’s letter of offer if they have sufficient space for what we want to put on there but more often than not if we’re putting offers on homes we haven’t yet personally inspected, we just fax off something from home.
We just include things like address, agent’s details, offer price, settlement terms, finance terms, expiry date and contact details.
We always put expiry date on our letter of offers because if you don’t, we find that agents will tend not to consult with vendors as a matter of priority in hope they will receive better offers later in the week. Thats just how we do it, not saying its the right way but it works for us because we always hear back from the agents within that time frame. Hope this helps you out.
Cheers,
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Hi SueTimeMatters,
My hubby and i flew up for the Melbourne workshop and were a little disappointed. I think it depends on how much experience you have in property to start off with. If you’re just starting out then its a workshop i would highly recommend as there were plenty of live testimonials of former students who have done extremely well for themselves with renovations. The reno kings are great presenters, with high energy and some great stories to share.
I guess the biggest thing we learnt was that we knew more than what we thought we did……this was just our personal experience of the workshop.
We don’t regret it at all, i think even for us walking away with the confirmation that we knew more than what we thought we did was well worth the trip.
Cheers,
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Hi Alwast,
Just a few things for you to consider………. make sure that you check that its been approved by the local Council (planning issues involved) because if its not yet already been approved then it may be very difficult to do so as the zoning may not allow for such an operation to occur in that specific zoning. When i worked for a local Council as a health inspector we used to have to inspect boarding houses (kitchen facilities etc) so beware that you may be subject to inspections…..in SA, most of our local Councils charge for inspections (between $80-$200 per inspection depending on the number of full time employees) now so not sure if this is the case for other states and territories.
Also, make sure you have factored in the appropriate boarding house insurance which is significantly higher than normal home insurance (talking somewhere between $5K – $10K).
They’re the main issues but if you’re only buying because its positive cashflow, then do your numbers carefully after taking into account the management (if you intend on paying someone to manage it for you), cleaning, internet fees , laundromat facilities and the costs associated with this, payphone rental fees etc.
Just a few things for you to consider.
Hope this helps.
Cheers
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Thanks for the reply Duckster
Actually funny you mentioned that coz my husband recently resigned and has no salary/income as such so we were thinking about putting the house in his name as opposed to our trust. We also know other people who also have a company/trust structure in place for their investing but choose to do alot of the deals in their personal name because of the generous tax bracket these days….
anyone have any thoughts/experiences on this?
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Thanks for the tip Tony. Much appreciated [exhappy]
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
Hi Jes,
I think one lesson in the real estate business is to never take a real estate agent’s word for it. One example is hubby and i recently heard a well known Australian investor say to a group of Adelaide Investors that Adelaide’s market wasn’t so good and that its not a great state to make money. Well i know for a fact that this investor was talking to a group of at least 20 or so Adelaide investors in the room who have and still are making great profits in Adelaide be it renos, subdivisions, construction etc. There’s money to be made most definitely so i guess my advice to you would be not to be scared by what agents or anyone else says. Treat everything as opinion until proven to be fact!
There are houses still around for Low 200s (10-15kms)not too far from CBD depending on how far you consider to be far. So bargains still to be snapped up here.
Onto your question re tradesman, tradesman are hard to get to rock up on time at a reasonable rate here because they’re in such high demand however, i know a couple of tradesman that might be able to do some work for you. They typically charge $200-$220/day. You can PM me if you want more info.
Regards,
Kim
Kim Anand
[email protected]“Money Can’t Buy you Happiness but it Does Bring you a More Pleasant Form of Misery”
