Westpac has raised 0.45 %………………..expect the other big three players in the cartel to follow suit and add premium to their bottom line also.

Depends upon the town plan.

Not all of NSW will have the same zoning requirements to allow sub-division, nor any state for that matter.

You may find that within Griffith iteslf there are different density requirements that council have depending on the location. Generally (altough not absolute) main/busy roads nearer to intersections and especially infrastrusture such as CBD, train, shops, etc, may give more scope to achieve denser development on a block and have looser height requirements

If that's your turf and you're keen on an IP there, I suggest you obtain zoning maps from Griffith council and learn their DCP (Development Control Plan) and LEP (Land and Environment Plan)

As you have done, always check with council prior to committing to a purchase especially if your intent is to subdivide.

Matt007,

conserve your breath mate. 

Ohh…….now the sceptic in me surfaces from it's slumber.

mattbombers…………….first post today (after joining the forum today)……………..are you a representative of said property optioneer.

Only 10 spots left…….better hurry or we'll miss the bus.  

Why not ask for a list of his developments up front so you may do your own diligence. That way you'll be prepared and have plenty of questions to ask on the scenic tour…………and make sure you get your thirty-five grand's worth.

If you are fair dinkum and not associated with this company……..please post back after you've done the course and illuminate us here on what type of things you learnt 

No. I don't think you would pay tax, however on the other side of the coin, your expense (interest capitalised for the draw) would obviously not be tax deductible.

IMO you would need to be careful that you have enough equity for your intents and purposes….so you you don't end up killing the golden goose/geese altogether with compounding debt.

Xenia,

surely you must be due for a sojourn to marvelous Melbourne………..and you can run an event here for us also.
 
I'm sure that other famous (aside of course  from your good self) South Australian would come and share his learnings.

Then again, I should get my act together and come and visit you guys………one of these days…………. 

Richard,

are you able to do 105 % LVR's with personal guarantees from the mummy?

This is probably not the full article, however some indication of its contents are provided.:

http://www.theaustralian.news.com.au/story/0,25197,25839599-601,00.html

If that's correct, my opportunity eyes are on already   and with very conservative current LVR's…..it may be time to go shopping again.

I have been sitting on my hands………….but not idly……have been researching my next foray and am waiting for cap rates to rise further before I venture out and commit..

If they are wrong I am still researching and will buy only a value add (with several twists) that is washing its own face and preferably is +ve CF.

“Mr. Market” is a fragmented, schizophrenic, multi-faced personality. Amongst the doom and gloom and, of late some yipee-kay-aying that we are bombarded with by the media, it is timely to reflect on where we're at and where we're heading with regards residential property.

Certainly, we are in interesting times and whilst not to trivialise the softening of the economy, I still focus on the full half of the glass. I'm not Pollyanna, however IMHO people who focus too much on the negative and trying to avoid what they don't want are by virtue of their attention on the imbedded command (avoiding loss/poverty/sickness/failure or whatever) likely to perpetuate (or at least add to) their unwanted situation. Don’t avoid what you don’t want, rather pursue what you do wish/want/desire.

My take on things moving forward from here, is that top shelf elite properties are likely to come off perhaps up to a further 5-10 % or track sideways from here having softened significantly over the last 12-15 months or so. This will depend on suburbs and how exposed the OO's (owner occupiers) still are to equities and business/commercial uncertainty. The middle shelf and this for simplicities sake would include suburbs where most properties are around the median price range (or slightly above) for the capital city in question, may see some gain or track sideways.

I feel the lower end may see some further rally due to affordability issues with FHOG although that may wane as the scale-back unfolds as one component but also due to reducing interest rates, making that sector more affordable to its intended purchasers. I feel investors may also push the bottom end up with falling interest rates. That lower end may, however fall off as job losses hit OO's who over-committed a couple of years ago and perhaps even locked in at nine's. This is the sector I find the most frustrating to prognosticate on. Perhaps some pull-back of the low shelf property rally due to unemployment (in family OO's) or no effect over the medium term.

The media also feeds the emotional roller coaster that determines the “sentiment of the herd” when it comes to buying, as real estate institute spokesperson’s are heard to report higher clearance rates to perpetuate a positive bull-style frenzy that the herd interpret as “I better hurry and buy or I’ll miss out.” Some investors also follow a similar credo. A higher clearance rate right now is due to shortage of stock. Anecdotally, I am noticing fewer for sale, in Melbourne at least, so what gets listed and has reasonable vendors, will sell.

We haven't bottomed as a market collectively, although there are sub-markets such as fringe FHB suburbs. The large development houses (Delfin Lend Lease, Devine, Stockland, etc) are laughing with the enhanced FHOG, encouraging young ones who haven't lived thru any economic slowdown or contraction to go full bore on instant gratification by buying an (affordable) brand new box on land in places with no (or little) amenity. Some have barely saved for the closing costs. I expect some future pain is likely to be delivered to them. These people fund the whole purchase with FHOG as deposit and whilst DSR may be OK for now, wait till they lose a job or take a pay cut from the culling of hours or, as will be inevitable, interest rates rise again……and they will.

Night follows day, contraction follows expansion, a slump follows a boom which follows a slump. A “market” will always correct to its median or average/mean trend line of sentiment. For me, some more pain to come IMO………these are opportune times to be cashed up with folding stuff, offsets, LOC or equity (with skinny LVR's) and pounce when the deal is good. It is always darkest before the dawn…….I expect a little more nightfall and then the cycle will again begin with daylight. Let the games begin. I also liken the cycle to the digestion process. We have fed our faces (by eating too much during the last boom) and the slowdown has been necessary to digest the food. Now we are in the elimination phase where the excesses are dealt with as waste leading to recession. As the catharsis continues, this prepares the appetite for more feeding frenzy to resume.

Personally right now, I'm sitting on my hands and am looking for commercial opportunities (that tick all my boxes) or  multi-door resi that is +ve CF or at least washing its own face; but not just anywhere. It must have amenity and infrastruture and be of the "small fish in the big pond" type, so the massess can afford to rent and the masses can afford to buy if I need to liquidate.

Credit supply may IMHO become tighter as there is another tranche of mortgage re-sets to come out of the US in 2010 and 2011…….according to some, we are in the eye of the storm so to speak. Whilst these are not all sub-prime, I see the problem with these re-sets  as people having "upside down" equity due to the housing collapse (generically) across much of the US. If their contract also nominate a clause of re-evaluating LVR's at that time, the folk with sweetheart rates may need to cash/equity inject or be foreclosed……….

Whilst fundamentally the supply/demand issues comparing Aus with the US hedges us somewhat here, it is the supply of credit and the cost to our banks that will affect our market IMO.

Aren't our mortgage insurers here US companies? …….we may still feel the squeeze here as money dries up and values start going sideways. There may be OO demand and investor demand, however if funds are tight, transaction volumes will fall and values might stagnate for a while……..may then bring more pent up demand akin to winding up a spring………and when it's let go, values will rise sharply as a mini-boom begins, before some equilibrium is established.

I am certainly no economist, however that's my take in a generic sense. There will of course be out-performers and under-performers as not all markets are in sync. It is indeed a confusing, yet in some respects, opportune time we are in.

What's your take on all this D?

I am no accounting expert, however I was under the impression that such type of lease back would not be a "going concern". This is a grey area. Such a short lease may not be viewed upon by the ATO as a going concern.

Agree however that the implications of the lease you are inhereting with the building need to be understood.  If you are purchasing vacant, you need some idea of cap rates in the location and what you could lease it for in this market (realistic rental) bearing in mind vacancy rates as well. That will influence your max purchase price.

Personally, if it were office building, I'm with Scott, feeder road location would be preferrable. If you are looking for industrial, main road; the busier the better and preferably a corner for me.

Don't get too hung up about GST. If you need to pay on purchase, then claim it back at the first BAS. It means having ongoing GST and BAS work to do, however that would have been the case with a CIP with income over 75 K anyway. The other drawback is having to find (borrow)  the GST to pay it whilst waiting to be reimbursed after the first BAS.

In addition to the books above:

Commercial Real Estate Investing by Dolf De Roos is also a worthy book and this excellent thread:

https://www.propertyinvesting.com/forums/property-investing/commercial-property/4325441

Also search thru the Comm Property section of this forum for more info.