Negotiate the extended settlement with an option to rent for 60-90 days.

The owners do you a favor, you do them a favor – a win-win scenario.

— Michael

Contact a qualified “lawyer and accountant”.

If you try saving a few bucks getting advise via a general web site forum, it will cost you ten-fold.

— Michael

“is there any books that give an indepth detail of doing this or articles”

The OTP strategy is covered as a topic in many books, but because every project is different, it is difficult to provide specific guidelines.

However, the approach is quite simple. Typically the OTP strategy is used when the developer wants to limit his/her risk and…[Read more]

“But how do you flip a property?”

The option to purchase [a contract] was simply assigned [sold] to another party.

“still can’t figure how someone would pay more than you did originaly.”

Supply and demand. Demand well exceeds supply in this market which was the basis of the decision to acquire the option – when there are more buyers [including…[Read more]

“you “can” make pots of money even in a crappy market.”

Absolutely agree – in fact I have touched on this several times in earlier posts.

However, in a bear market the strategy is different because it can be difficult to flip the property – as in the example used – if this is the intention when taking the land option.

This example is very much…[Read more]

“units don;t really have land value as such”

Land value is incorporated into the value of a townhouse/unit at time of purchase and sale.

“A townhouse is over two floors, a unit is “lowset” or on one level.”

A unit is not necessarily a single level dwelling. Townhouses are often designed as a duplex – where units generally define a…[Read more]

Secured an option within the past 3-4 months [no money down] on land in Queenstown, New Zealand subject to the vendor receiving re-zoning approval.

The offer was slightly higher than the asking price.

Approval was granted.

The land was flipped for more than twice the agreed price on the date the deposit was due – closing + 30 days.

Total time…[Read more]

“I don’t think the government wants property prices to fall”

Correct. You will find rising interest rates are more associated with managing inflation and other fiscal issues not necessarily related to property values or “affordable” housing.

If any government introduced fiscal policy to “reduce” property values, the impact on institutional…[Read more]

As a rule of thumb – and in my experience, the 2 bedroom option should generate higher capital growth and higher yields.

Although supply/demand and location are key factors when comparing, we have a policy not to invest in 1 bedroom apartments for the above reason.

— Michael

“due to personal reasons needs to pull out.”

“Apparently her friend can walk from the deal and be refunded due to the project taking so long or she can onsell it.”

— Which is the reason for on-selling the townhouse?

We conduct a number of developments with a pre-sales [OTP] component. A purchaser on-selling for personal reasons is not uncommon…[Read more]

More than often once the property owner has filed bankruptcy, the lender has already on-sold the property – commonly referred to as a “note” [the property loan/mortgage].

A term used to describe an investment associated with a forced sale – due to pending bankruptcy – is “pre-foreclosure”.

The transaction takes place before “foreclosure” and…[Read more]

$5 acre for prime land overlooking Crested Butte [ski resort] in Colorado.

The land is owned by the US Government who are in the process of selling a number of acres to a mining company.

The mining company found a legal statute which allows them to acquire the land for what it was valued at in the mid 1800’s.

— Michael

Unless there is a clear [and short-term] financial benefit to acquiring these units – which outweighs the apparent risk, this would not appear to be a good investment.

Aside from the liability issues, the absence of a body corporate committee/agreement can, and probably will, negatively impact the value of your investment.

A Body Corporate is…[Read more]

Jeff – I provide feedback which I hope assists so-called “novice investors” with expanding their outlook from an investment perspective.

If the more experienced investors on this forum communicate or provide feedback at a “novice level”, those who are prepared to learn, research and “think outside the box” are missing out on valuable…[Read more]

Jeff – my recommendation is based on a “simple” investment strategy which is the foundation for aquiring real estate and other assets, and building wealth.

The most confusing term used in this discussion is “draw down” – when you leverage equity you do not need to “draw down” anything – unless you are referring to a “home equity loan”.

The…[Read more]

Jeff – read again what I wrote. In a round about way it appears you agree with what I have said.

Do not use [or “draw down”] cash if there is equity available to offset a deposit, for example.

— Michael

What data and investment strategy was used to determine 20 percent “capital growth” – which I assume is annual growth?

How many properties have you acquired in Manchester? and how many have demonstrated an average CG of 20 percent per annum over the past 3 years?

A couple of points of interest re: UK residential market:

Nationally, the typical…[Read more]

The following statement may not reflect the best strategy when borrowing against equity.

“treat the 20% drawdown as a cash deposit when doing your calculations. You are limited to how much equity you can draw down from other properties”

— When borrowing against equity retained in another property, often the best strategy is to not “draw down”…[Read more]

I have experience in this type of structure.

“pretty safe bet”

Firstly, you should do your homework before acquiring property based on someones “guarantee” that the investment will generate XYZ income over a defined period. And employ a very good contract lawyer.

There is always a catch or clause to protect the seller/lessor.

“the resident…[Read more]

Hello Westan

RE: “What we have been seeing at the cheaper end of the market is it is rising at about the same rate as the middle of the market so if a home for 100k rises 20k we are seeing the cheaper end say 70k move 20k also. so as a % return it actually outperforms the higher priced property”

— I certainly agree, although I do not deal in…[Read more]