My advice?

Keep watching and waiting, it was a dead cat bounce if at all. The fundamentals are shot and there’s a long way down yet to come across the board.

I reckon end of the decade will be a good time to re-enter for long term CG, possibly earlier circa 2007/8. Mind you, if you’re in it for the bucks you can make +ve CF then who cares what the market does with the cost of the place once you’ve secured your “lucrative” stream of income.

IMHO,
Michael.

Cruiser,

Thanks for the post. I haven’t actually read Steve’s $1M in 1 year, but now I don’t think I will. I’m an aethiest through and through, and don’t understand why people need to invoke the name of their chosen supernatural beings in their business dealings. This is one of the main reasons I steer clear of a lot of the American real estate “preachers” out there, I really can’t stomach their style. Of course this is just a personal concern of mine.

I was getting pretty interested in John Burley and the Burley Bootcamp until I realised he dedicated a whole session of the course to some preacher guy to talk about correlations about personal abundance and spiritual abundance. What the??

Please, and I mean PLEASE, can I request all real estate gurus keep their religious orientation to themselves! I’m sure if I thanked Satan for all of my extensive personal success I would have a hell (no pun intended) of a lot of complaints thrown back at me. Not that I would, because I believe there is no correlation, but what difference is it then for someone to thank Jesus or Mohomad or Zeus or whatever…

Please don’t read this as a slight on any religion, I’m all in favour of freedom of religion. Its just a lot of us choose the no religion path and believe religion and business have absolutely nothing in common.

Cheers,
Michael.

HG,

First of all it sounds like you’re in great shape already so well done! As to your little windfall, well that’s a nice little dilemma to be in. I guess the trick to your question lies in the “current climate” caveat at the end, and that becomes a little bit of a crystal ball question.

FWIW, I would recommend you keep doing what you’ve done in the past. Use the $300K as deposits on more properties. If you can keep them neutral or better, then cash flow won’t be an issue and you’ll be leveraged to the tune of a few solid million in good property. There’s the trick though, make sure you buy quality at below value! So, its not juse a case of splurging it on the first few properties that cross your path, but of a lot of diligent research and steady buying. You’ve got a great opportunity now to really increase the size of your portfolio.

I’d suggest using strict criteria like Steve Navra’s rental reality to determine purchase prices. In the current overblown market its far too easy to buy above value.

If you’re scared you can always park it in some 5%-ish cash type investment for a while. But I think quality neutral geared will get you a lot more than a 5% leveraged return on your capital down.

Cheers,
Michael.

s2ss,

Peter Spann covers this issue well in his book $10M in 10 years. He calls it the perpetual deposit and achieves it by buying well and adding value up front. Then you revalue and use the difference between the valuation and the purchase cost to draw down the next deposit. ie. your created equity up front becomes your deposit on the next IP.

To do this you need to avoid cross-collaterizing, and Peter also explains how to go about doing this through the loan process so that the banks don’t get concerned with the number of properties you start building in your portfolio.

Recommend you get and read his book, $20 well spent.

Cheers,
Michael.

Aussierogue,

Now if only I knew how to ride a horse I’d be up for it!

I think that was probably a stab at me though and fair enough too. I am actually normally a modest guy and don’t consider myself wealthy by any stretch of the imagination. I rarely, if ever, tell anyone about my financial state. I just wanted to explain to Marc how being a social leftist doesn’t necessarily mean you’re self limiting. Its hard to do that without illustrating how non-self limiting you are.

If I came across as arrogant, I apologise.

Cheers,
Michael.

Marc,

A quick and simple answer for you… The guilt of the afluent arises as a result of social inequity. Those who value all human life equally are understandably distraught at the prospect of burgeoning global inequity. Even though some small positive by-product of purchasing the BMW might accrue to people in third world countries, this does not aleviate the obvious guilt associated with said purchase. Rationalising the purchase, you inevitably ask “What right do I have to live in such luxury, when there are others on God’s earth who are more concerned with where their next meal will come from?”

I go some way to aleviating this guilt by donating regularly to humanitarian causes so that my dollars can directly address some of the problems of global inequality. This is a much more effective way of addressing the imbalances than relying on corporations filtering profits down to third world employees. That simply doesn’t happen, as corporations serve their shareholders interests foremost and not those of their third world workforce.

IMHO,
Michael.

WayneL,

Well it seems you’re right that Marc isn’t over there on the left. He just took to them with the sledgehammer with his last post painting them with all the typical negative stereotypes they are perceived by. Got my back up a bit, but I won’t take the bait.

I’m probably centre left. I’m a capitalist who’s an executive in a multi-national wood products company who is studying his MBA and is into REI. I guess that’s enough to rule me out of the tree hugging kind of far left minority. I am however concerned about the short-termism of right and far right governments such as those in power in the US and Australia today.

I differentiate between the left and right in terms of long term / short term. The right seems concerned about maximising economic returns today (short term) at the expense of future generations (long term) who will figure it out for themselves. George dubya when asked “How do you think history will judge you?” replied “Who cares, I’ll be dead by then!” – typical myopic short-termism. The left basically argue all decisions and actions should work within the confines of the closed system we live in and consider the long-term impacts. Before adopting a FTA with the US you should ask what impact the Intellectual Property protection will have on future generations. Before marginalising Kyoto you should ask what impact on one or two generations time of global warming.

Anyway, I feel more at home espoucing the views of the all-inclusive, forward looking left than the divisive, intollerant, short term looking right.

Thankfully both views serve a purpose and typically balance each other out with governments walking the centre road for fear of alienating either camp. Unfortunately, they’re a bit centre right at the moment so hang on to your hats as we’re in for a bumpy ride.

Cheers,
Michael.

PS Marc, gay marriage? Are you seriously suggesting that this is a bad thing???… That’s the sort of non-inclusive viewpoints that scare me about the right. I thought religion was all about one people under god and universal love. I guess I was wrong, and that’s why I bought out of the whole thing a long time ago…

Guys,

I think its called “slurping” and the search engines do it quite regularly to build their hyperlink database.

I doubt they were real users per se.

Cheers,
Michael.

Hi All,

Ours was really simple yet no compromise and absolutely perfect. We had the wedding on the beach, and our reception at home for around 50 friends and family.

Our house is split level and we could easily put 8 tables in our entertaining room and then deck it out to the gills. We had it professionally catered 6 courses with Moet enough for everyone. The whole wedding was about $5K all up I think?, and it was perfect. You should have seen the room with silk ribbons and candelabra and myriads of fresh flowers and pressed white linen etc etc. Kay was resplendent in off-white silk and I was rather dapper in a three piece tuxedo number. Of course we saved a motza by doing most of it ourselves. Wedding planners didn’t have the same flare that Kay has and she is far more capable than any of them appeared to be (my wife is amazing, and I mean AMAZING)…

Its nice to reminisce as today is our 1st Wedding Anniversary. I’ve splurged a bit and bought kay a pair of matching diamond earings (I know the 1st is supposed to be paper but what the heck), and booked dinner in a seafood restaurant at Manly.

Gee is that the time!! Better run, the bookings in about two hours time and I’ve got to get home and get ready then drive to Manly.

Love to you all, (I’ve got a lot of it to give around right now). [biggrin]

Cheers,
Michael.

OSienna,

Nice link, thanks! And common sense really. That’s what quite a few of us on here have been saying for a while, but its hard to be a bear in a bull REI forum.

There’s still profit to be made in a declining market, its just you need to employ different strategies such as wraps and flips, and it takes a lot more work. The old buy-and-hold as a -ve gear for CG just won’t cut it at the moment. And it might be 5-10 years before it will again. At that point I’ll be jumping in head first and buying up big on a lot of quality Sydney properties. But in the meantime, my money is staying on the fence.

Cheers,
Michael.