Forum Replies Created
Chan$, do you want to come and do my paperwork? I haven’t yet done last year’s tax return[
]Cheers
MelWorks for me.
Cheers
MelOK. Found my post
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=7689
Hey RedwingI’m still learning stuff from HK, as I’ve got all my notes, and a set of DVDs of all the seminars he has run – about 8 sets all up I think.
Basically, I guess you could say the main thing we learned was that we shouldn’t listen to a bank manager who will maybe tell us that we could probably, if we were lucky, scrape through and buy another property sometime in the next 2 years.
We learnt how to structure our finances, how to do our research on properties, and how to sell each ‘deal’ to our bank manager, so that it was ‘deal’ based finance rather than completely on our ‘borrowing power’ as defined by their computer.
It also gave me more confidence in buying off the plan (we did it quite successfully even with a couple of major hiccups), and in actually buying more than one property at a time. We bought 7 in one hit, and 3 in another. Funnily enough, the 3 have outperformed the 7 by about 100%!!
I’ve also teamed up with a group of people who are looking at deals that return a minimum of 20% per annum on our cash, and the latest deal we have been offered works out to be a 70% return in 18 months, interest and profit share. There’s no way I would have even known that these deals existed, much less how to get in on them without doing Henry’s courses.
We also learnt how to secure long term tenants, at higher than market rates, and how to improve current rentals – esp in comparison to almost identical apartments.
Quite a few other things, but this post is long enough.
Part of an answer in same thread to Wrappack’s question
Secondly, yes, we did buy several properties off the plan, but we used cash deposits rather than deposit bonds. Some of this cash we borrowed off friends and family (and paid them a 50% return on their cash). We did also exchange on 5% or less. HK also teaches how to maximise the value of your current properties – sometimes by renovation, how to maximise the rentals etc., so I guess you could say we have made the money ‘on paper’ only. He also teaches how to get the best valuation – which is what a lot of the guys on this site have also been saying. Do your own research, provide it to the valuer, and 8 times out of 10 they will accept what you have provided – in the right format etc. of course.Structuring our finances basically means how we are set up (with loans etc.) and how it’s maximised. How you present you portfolio to the bank certainly can take a lot of the computer out of the equation. ie. To present a new property you are wanting to get a loan for, you present the proposal with a picture, a description, put in the amenities etc. etc. You put in comparable sales, comparable rentals, population of place (if not city), employment, rental vacancy rate. Then you put in your financials – perhaps with a PIA 40 year projection etc. BAsically a big folder with sooo much info that you will really come across as having done your homework. You also need to get to a person in the bank who can make decisions – not just a lackey who uses the computer.
The proposal is for any bank – but again, you need the decision maker.
Cheers
MelCheers
MelI did a long post on a lot of things I got out of it in response to a question from Redwing. I’ll see if I can find it.
Cheers
MelOriginally posted by Ozboy:
As for the seminars, well yes there was alot to be gained. I will be using this information in future, as I am determined to make money out of property.
However, there were a couple of glaring lies, in my opinion. Henry kept pushing the fact that making money out of property is a ‘pushover’ or he at least IMPLIED this. Totally wrong; you need to be spend hours & hours of your own time & this is very difficult with a full-time job.
Secondly, it was never explained that the renovation of apartments/units & on-selling them at settlement, is one of the most complicated features of the course. This was even admitted to me later by one NII’s employees on the phone. I never found a builder willing to hold off paying his subbies during the 30 day settlement period, while a place was being renovated. Related to this, I felt that Richmond in Melbourne had the most potential for apartment renovation, as its property prices are on average significantly lower than other suburbs in the same vicinity to the CBD. Henry stated during the course that you should avoid buying at auction & wait a couple of months for when the vendor wants to sell at a reduced price. WELL WHAT’S THE POINT IF THE AUCTION CLEARANCE RATE IN RICHMOND IS OVER 95% (as of February/March last year)!!
This renovation ‘scheme’ would only work in a depressed market, not a bubbling market, in my opinion, as vendors & builders would take what they could get. THIS WAS NEVER STATED IN THE SEMINARS.Ozboy, I’m gathering that you are bitter? Only by the fact that you quoted my earlier question?
I feel for you with your PCG purchase, and I wonder if they are still operating. I have not had a call from them for a month, and never bought anyway, so I wouldn’t know. I never actually believed that PCG could provide me with a better deal than I could find myself, and I didn’t like the way they presented.
I’m interested that you say there were lies though. Then you say that ‘it was implied’, and ‘this was never stated’ etc.
The main thing I got out of the particular ‘strategies’ that you mention is that it could be possible. I don’t think he ever said it was easy, but the way Henry presented, everything was a piece of cake. I think that’s what got so many people into trouble, cos it sounded easy!!
As for your point about auctions, some like them – Peter Spann for instance, and he can teach you his strategies which work quite often, but not always – and some don’t. I’m not a fan, but if I identify an area that I want to buy in, I would have to adapt to the way things are done. Henry didn’t say you had to buy in Richmond, that was your research, and so you have to adapt to the fact that it looks like auctions work down there.
Ozboy, I’m glad you did get some positives, and I hope things work out with your PCG property. I hope it wasn’t a $600-$700K property.
Cheers
MelLord of the Rings
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MelGuru why do you fly so much?
And I don’t see how you can be retired, you’ve done about 200 postings in the last few days – almost as many as Chan$ and SIS.
Cheers
MelHey Westan, if you delete the thread, or your post, you don’t actually lose the number.
So you could post lots of answers to one thread, and then just go and delete them all. Voila – many more posts, but no evidence…..
Cheers
MelChan$, one of the playing pieces in Monopoly is a little car. You push your car around the board as you throw the dice. As the aim is to buy up the ‘properties’ on the board, if you get all of one colour, you can then ‘build’ houses on them, and the rent goes up. So this guy obviously doesn’t have much money left, and when he lands on the square, finds that he cannot pay the bill, even if he sells everything he has got. So he is bankrupt, and out of the game.
Cheers
MelLisa, is your accountant taking into account that you would have already paid tax on your earnt income?
For example, if you earn $20K, you pay tax of $2380 (roughly).
If you then add $12K in rent, less interest of $8K, and other expenses of $3K, your ‘profit’ is $1K. Add this to you taxable income, and you would only pay tax of $300, leaving you with $700 free and clear.
Of course, if you get a quantity surveyor in, you can also claim some non cash deductions, so could end up with ‘expenses’ equalling income, but still pocketing that whole $1000.
Cheers
MelHi madankumars
Yes, it’s a bummer that you didn’t do something while you were out here. I guess the first thing you need to do is to check out the FIRB website (but I don’t know what it is, sorry).
Then if all things are go, contact a Mortgage Broker who should be able to tell you whether or not/how much money you could borrow.
Cheers
MelMark, I think you need to be struggling to pay for mandatory living expenses to access the super!!
Is your IP Interest Only? If not, look at that option. If you’ve paid any extra off your PPOR, see if you can redraw it. perhaps talk to the bank, and see if you can pay Interest Only for a few months on your PPOR as well.
If you have equity in either/both properties, you may be able to access that – a very short term fix, but perhaps enought til you get a new job.
Contact a mortgage broker to see what you can do.
Cheers
MelIn your loan app you need to put the contact details of the agent. The bank valuer will contact them and go out and have a look. You don’t necessarily get told when they are doing it.
Cheers
MelBenedict, in the trust structure it doesn’t matter.
However, the trustee would best be the person who is less ‘at risk’ which sounds like it would be your partner. Trustee as an individual, or as a sole director of a company (preferred by most).
Cheers
MelBlackJack is right – it is monopoly.
Sorry to disappoint your Henry Kaye theory SIS[
]Cheers
MelPurchase Price = $460K
Deposit (cash deposit) = $92K + $20K costs
Loan = $368K @ 7%Repayments = $495 per week.
Rent = $300 per week.$200 input before any other costs!! That is huuuuugely negatively geared. Big income and tax breaks required to happily fund this one.
Cheers
MelAnd in fact, Bob Carr was unhappy that the Federal Government are ‘redistributing’ the GST, so NSW will get less. I thought they were supposed to get back what they raised, but it’s not to be.
Costello, or somebody in the Feds told him to increase stamp duty to make up the difference!! So much for it disappearing! Ha.
Cheers
MelI forgot to add, $200 pw is considered ‘cheap’ in Canberra, and my lowest is $180 (it’s a friend, and I haven’t yet worked out how to raise the rent[
]), next is $240, then it goes up to $400+.In today’s market, these rents are definitely a lot cheaper than it would cost to buy the same house.
Cheers
MelYou must live in the house first – although maybe not (would need to research though).
When you move out I would definitely get a valuation done, for your recors, and as you may need it down the track when you do sell.
You then have 6 years to either move back in, or to lose the exemption from the CGT. If you buy another house which you live in, you need to make the decision as to which will be your PPOR for CGT purposes. You do not have to make this declaration until you actually sell one of the properties. Remember, you can’t have two at once (except for the 6 months Simon mentioned, but that is only on changeover of houses), so when you choose, that will mean the other will be liable for CGT.
Cheers
MelFearless and Chan$, for unrelated parties buying together the only trust I would use would be a unit trust. This keeps all entitlements in line with unit ownership. Any form of discretionary trust with unrelated parties is just asking for trouble.
Fearless, contact a mortgage broker regarding how to set it up. I’d say there are a couple of ways. One is to borrow the money individually, and buy units in the trust. This would probably leave the house unencumbered.
Another way is for the trustees (either individudals or company) to borrow/guarantee the loan with the house as security. This method is the one I am doing at the moment.
Cheers
Mel
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]), next is $240, then it goes up to $400+.
