Forum Replies Created
- Originally posted by The Mortgage Adviser:
The information you have learned over the years came from your own research and enquiry correct? Surely that was free and just cost you some time.
Do you ‘guarantee’ that people are going to succeed copying your teachings? (This would be a first!) Do you provide ongoing support or is that additional to the $3,500 fee for the seminar?
Regarding the CD, I appreciate the offer but I think earning a nice house ($350,000) from each seminar of 100 people tells me enough. The attendees are crazy!
Robert Bou-Hamdan
Mortgage AdviserRobert
You are welcome to your opinion.It is interesting that over the years I found the main differences between the rich and the poor are.
1. Their mindset.
2. The way the invest
3. The rich have great advisors and are happy to pay for them.You are welcome to stay in your your paradigm.
If I could make you $150,000 why would you not pay me a fee. That’s the way my main business (www.metropoleprojects.com.au) works.
I’m suprised at your attitude if you are in business.
Don’t you think you add value to your clients? Isn’t your time and knowledge worth something? Don’t you expect to get paid for it?
Or don’t you think you deserve it?
I have not learned my knowledge for free. My time is worth heaps and I have spent a fortune on eductaion including post graduate education. My business partner is an architect and has an MBA in property law and finance.Is his time and efforts at the workshop worthless?
I have paid a lot in time money and stress learning from my mistakes. That must also be worth something.
There are lots of ways to pay for one’s education. Obviously some people are prpared to spend money and time improving and educating themselves and others are not.
I would suggest that a larger proportion of the first group are likley to well, but I accept that not everyone will.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by markpatrick:Michael I have to say this advise and strategy of drawing on equity is dubious to say the least, and is just another form of highly leveraging property which is another strategy I don`t go along with.
Do you draw this equity AFTER youve made the 10%/$200,000, this would be a more reasonable plan, but then again if they DON`T go up at all and in fact go down, you better have a high paying day job no matter how many properties you own.
You say you hope your properties will go up 10% but at least they would have gone up $200,000????, this sounds to me like something a novice would say and to spend money before you earn it is breaking what I believe to be a golden rule in R/E.It may sound like what a novice would say, but I’m far from that. I am 52 old and have been involved in property for over 30 years.
I am regularly quoted in many magazines including A.P.I., The Bulletin and Personal Investor as an authority on property. I regularly asked to speak at property conferences aorund Australia and SE Asia. In fact I have presented at 35 seminars in the last 12 months
In the last 12 months I have added over $3 million of properties to my portfolio using this strategy which I have been using for 10 years now.
But I understand that it is NOT for most people, and those stuck in the cashflow phase of their investing (as outlined in my post above) will not “get it”
That’s OK -most of Australia is stuck at this cashflow phase.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by The Mortgage Adviser:Michael, I just read that you give away 2 free spots and 2 half price. How many people actually attend the $3,500 per head workshop or were you referring to the $55 seminar with 1,200 people? Surely you could run a totally FREE workshop one weekend a year for young investors.
I agree with your comment about learning something at every seminar, course, discussion attended but I have stopped going to seminars as it seems to be the same old stuff recycled in different ways. $3,500 is a bit steep in my opinion for information that is available for free.
My comments are not intended to offend as I read parts of your Newsletter and consider it very informative and a good ‘summary’. I have yet to read a new concept or strategy in it though.
Robert Bou-Hamdan
Mortgage AdviserRobert
The free places are for my $3,500 workshop.
It is my way of giving something back to the community that has made me successful.I have not finalised the selection yet, but I am pretty sure that one will go to a lady from Queensland with a retarded 23 year old child and who’s husbnad had a stroke 4 years ago, leaving her as the bread winner.
She’s had a hard life and I would love to help her.
You are correct that there is very few new concepts in my newsletter. Remember its free ánd of course it is a form of marketing.
If I gave what took me 30 years to learn for free, why would people pay for my services.
The workshop is limited to 100 people and I reinterate the comment made to markpatrick. I have comments form EVERY attendee on tape (OK…CD) from the last 2 workshops and each and everyone of them got much, much more than their money’s worth.
And remember these are almost all experineced investors owning multiple properties. They have sort of self selected themselves by being prepared to pay this amount of money.
Again I am not saying all this to advertise my services, I don’t need to, we have very few spots left. I am just responding to your question.
I agree that most seminars are the same. I have been to most. That’s why I know mine is different.
If you like, send me a private message with your contact details and I would be happy to send you a copy of last years CD of comments.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by Michael Whyte:Michael,
I subscribe to your newsletter and I think you actually have quite a lot of good information to share and do so willingly and with little vested interest……
One quick question around the draw equity to live approach that you described if I may:If I’m drawing out my equity growth to live on, then in effect my net equity is not increasing. i.e. As my net worth increases, I draw it out and live off it. Now, if I’m neutral or slightly -ve, then I don’t have any passive income on these assets and my equity is being “consumed”.
How then do you build your net worth? IMO, its your net worth that allows you to retire from the 9-5 grind and live off the passive income. Either that or cash in the equity and buy an annuity stream or some such.
Just can’t get my head around how drawing and living off your equity growth on a neutral or negative structure gets you ahead. Unless of course you’ve got so much equity that you only draw a small portion of it and the rest still gets you ahead.
If this is the case, then the approach is really only of any use once your equity growth exceeds your cost of living by a decent degree. If it doesn’t, then there’s nothing left to re-invest for compounded growth.
Thanks,
Michael.Michael
I can understand where you are coming from, because I left out one critical point.
That is – this process only works when you have large amounts of equity and it should probably not have been discussed in this context without lots of explanation. That’s why I have said in previous posts that we spend over an hour explaining this at our workshop.
Anyway lets have a try….
There tend to be 3 stages of investors.
Income Stage – We work for our money
*Here we finance investment with our personal contribution.
*We are concerned with the efficiency of our physical body (we need it to earn income)
* We are concerned about cashflowSome investors progress to the next stage (most never do) …
Capital Stage – Money works for us
*We finance investment without our personal contribution because we use our equity to finance new aquisitions
*We are more concerned with the efficiency of our capital rather than with our physical excertionVery, very few invetsors move to the last stage…
Active Stage – Everything works for us
*We finance our investment the way we choose to
*We are more concerned with the efficiency of everything that we can influence
(Do you think Kerry Packer worries about his cashflow or even his equity. He sees the banks money or the money market’s money as his money. He does deals without putting in money or equity or cashflow)OK so back to living off equity….
You’can’t do this until you reach stage 2 – the capital stage of your investment career.
Imagine you have $3million dollars in properties and $2million in loans.
That leaves you with $1million in net equity.
You borrow $100,000 against this equity to live off. You allocate $7,000 of this to pay interest, leaving you $93,000 to live off. (better than paying 50% tax on earned income).
At the end of the year you have eaten up your money and have to go and borrow more.
But on average your properties have gone up $300,000 over that year (10% per annum)
Lets say it was a bad year. They only went up $200K. At the end of the year you are still $100,000 ahead – in other words $100,000 more equity than you started the year with to invets again or do whatever you want.
So Michael, this strategy is definately not for beginning investors. You need at least $1 million nett equity or more for it to work.
But hang in there. You will achieve this.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by markpatrick:……I don`t stand in judgement out of spite, if I have a question I simply ask it, no offence meant.
A true money back guarantee is credability in one hit.Thank you for explaining that markpatrick. I’m sorry if I was a bit sensitive.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by markpatrick:Michael I am wondering what is the difference between the free seminar and the paid for one?.
Also you say development is very risky yet if someone pays thousands to attend seminars to gain info which is freely available they will make millions?, or mitigate thier risk in development to the point of getting over 10% return, and then draw on your equity depending on this factor, you sound like you believe there is no risk at all using this type of strategy, that is not advise I would follow.Thanks for the response.
It is interesting that since you have never been to any of my sessions, yet you would bother to go to the trouble of knocking them.
Why would you do that???
Anyway…
At no stage have I suggested that property development holds little or no risk.
In fact I started a thread on this forum called “the risks of property development” and I only responded to this one on its benefits.
We spend a huge time at our workshop explaing the risks and maybe we will save some of the attendees some heartache. So many beginning investors are taking on some form of development without knowing the risks.
They don’t know what they don’t know.
It may interest you to know why I began conducting my annual workshops…
Like you I was disapointed by the scams of the many “get rich quick” seminars and that’s why I called our workshop the “Real World” workshop.
We brought a level of reality to the scene.
For the last 2 years I have warned that property prices in many areas would stagnate or drop. And I have done so publically in my newsletter.
Thanks for giving me the opportunity to better explain what I am about.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by MikeJackson:I think Michael Yardney’s seminars are a bit of a rip off / scam. He uses them as a vehicle to get peoples money to fund his developments (or project manage as he calls it) and to take a large slice of the pie. The only reason he is on this site is to sell these overpriced seminars. He says he never sells his properties but I bet if you knocked on the door of any of the developments on his web site, he would not be the current owner. Whilst I am sure he is a knowledgable man he seems to only give out small peices of information on the forum and says come to the seminar you will find all the answers, ddid this guy learn from Jamie McIntyre.
Mike
Thanks for your opinions Mike. I must have done or said something to upset you.
Have you been to one of my free seminars?
Were you one of the 1,200 people who recently came along to my $55 property briefing? (I believe everyone who went thought it was great and learned quite a few things.)
Have you spoken to anyone who has attended my $3,500 weekend workshop?
If you haven’t I would be happy to send you an unedited CD of the opinions of EVERY attendee who came last year and the year before. I have them all on tape. EVERY ONE and no editing – just so you can see how they felt.
You will find every one felt they got much much more than their money’s worth. No one has ever asked for their money back and these workshops come with a money back guarantee (Interesting…..)
I’m not explaining this to advertise my services. I don’t need to. This year’s workshop only has a few places left.
I’m just doing this to add balance to this interesting discussion.
For what it is worth the Reno Kings, of TV fame, came to my workshop last year and PAID full price to attend.
Most of the other attendees owned between 5 and 22 properties. These people were all well off if not wealthy. Sure there were a few well read beginners.You see… this annual workshop isn’t for everyone. It is for a select few and each year we have a similar discussion on these property forums.
Until you are in the right paradigm/headspace to accept that you can learn things from others and it is worth paying for this you will stay where you are.
But you have to be careful who you listen to.
I can cleary show I have made profit from property invetsing and development since 1979.
Every year I spend thousands attending seminars and each year I learn something new. At one seminar (Brad Sugars) Pam and I paid $7,000 each to attend and I only got one really good idea. But that idea made me millions.
You will find most welathy people invest (not spend) thousands on their education each year and are happy to have high paid advisors.
The poor in general cannot see the benefit of ongoing education, especially after they have left school.
Again the problem lies in whom are you going to pay to educate you.
By the way why hasn’t anyone mentioned that every year I give away 2 “sponsored” places for FREE to people in need and 2 places at half price to students pensioners etc
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by redwing:IMHO Money begets Money and when your into Property Developing you ‘need’ money..
AUSPROP & MICHAEL
There must be ‘many’ traps for novice players when it comes to the developing game and Michaels Seminar sounds ‘great’ (honestly) but…is it for the average investor?
What income level etc would this seminar be applicable for?
I’m sure ‘any’ attendee will pick up great tips from the presentors you have, but how many people will have the resources/funds to put the majority of them into action?
REDWING
You are right Redwing.
Development is very risky and is not for the average investor. We take great pains to explain this to any potential client.
Further we have them get independant legal and accounting and financial planning advice before the become involved in a project with us.
We only run our workshop once a year and run it for a small group of experienced investors.
They are very different to the seminars run by Steve McKight who’s principals are relevant to a much broader base.Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by AUSPROP:If you have $93k of expenses and only $50k to call your own you are bankrupt!
The point being made is you can take $50k as cash, or leave it there as $93k cash and a debt of $93k secured against the property. The cashflow from subsequent developments funds the slight negative gearing on the earlier properties. My problem with this whole scenario is that a new building will drop down significantly in value (like a new car) once it has been lived in as you are dealing with a retail product, so you need to consider whether that $93k asset is really worth $93k, or if on the second hand market it will be worth $50k, in which case you may as well pay the tax and run with the cash.
http://www.megainvestments.com.auWRONG!![biggrin]
If you develop your properties you will build your $500,000 at cost for $400,000.
But this stratgey doesn’t depend on development.
All you need is a portfolio of good properties that on average will go up in value. They may not all go up each year but on average my portfolio and those of our clients go up well over 10% per annum.
As long as your properties and therefore your equity goes up more than your debt does each year you are ahead.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auIf you are going to commence building straight away and you then ket out your property as a long term investment you should be able to claim the interest on the devlopment as a deduction.
A number of our clients have saught a tax ruling on this matter and this was the result.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auYou should understand that the agent works for himself and in his best interest.
Many agents are often interested in more than the current sale. They are looking for the next property to sell and if you don’t have one, they are sometimes more interested in submitting offers from a purchaser who will offer them their house to sell. They are not keen to deal with investors.
That’s why we always deal with the listing agent sometimes called the controlling agent, because they have the best access to the vendor and understanding of his needs. They have a vested interest in making the sale go through.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by Byron Sam:I heard Steve mention yesterday at the Brisbane Seminar a book by Paul Hanna, called “Just Do It.”
I don’t know whether this is one of the Hanna brothers of Paul and Danny fame from Melbourne as I haven’t read the book yet.
if it is I have grave concerns about the integrity of these brothers from personal
investigations I have made for a friend of mine.Sincerely,
Byron SamByron Sam
No its not the same guy. I know others have asked the same question and the author does not like the comparison either.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auJen
You could find better areas to invest in.
These far northern suburbs will get very little capital growth over the next few years.What attracts you to this area. We are buying properties for investors all over Melbourne http://www.buyingmelbourne.com.au and I don’t remember anyone asking us to look out there.
As to proeprties with devlopment potential…its hard to make them “stck up” with low end values that you can achieve in Craigebrun.
Look for areas with a history of strong capital growth
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.au2 good sydney based accountants are
Shukri Barbara of Property Tax Specialists on 02 8338 0355
Ed Chan of Chan & Naylor. I have just spent a week with Ed We were both speaking at the World Property Summit in Malaysia and he is a very smart guy
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by Y:Just reading Michael YARDNEYS newsletter and thinking about getting my next property,……
Y
Y
That’s really great.[biggrin] I am happy that my newsletter inspired you.
GO FOR IT!
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by tribe_of_dan:Hi Alan,
Taken from the notes for Sydneys Masterclass…
“Tax is calculated by ((Sales Price – Net Purchase Price – Sales costs) x 50%) x 48.5%)”
– 50% is for the CGT discount as you have had it for over 12 months.
– 48.5% is the Highest Marginal tax rate.Dan Lewis
Dan it is not paid at the highest tax rate but at your own tax rate. This leads to the possiblity of reducing CGT liability by selling in a year of poor income such as after retirement
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auYou may not need to give 10% deposit.
ALmost every property we purchase is on 5% deposit.
Many vendors are happy to accept a delayed settlement as they need to find a new home for themselves.
As Dan says, find out what the vendor wants – find out his needs before making any further offers
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by pgoldfinch:Thanks for that colbert!
We are going to sell and have heard a ‘formula’ for investment property developing which goes:
1/3 Purchase, Designs and DA approval.
1/3 Development
1/3 Profitie if your total sale of all 8 units = $2.4m then it should cost 800K for the first step, 800K to develop and then your return should be roughly 800K… how does this sound to everyone?
~~
As Sailesh explained, this formula is not how a developer works out what land is worth.
To get a “residual land value”you must work out the end value of the project.
Then subtract all costs of constructing the project including holding costs and consultants costs.
Allow a profit margin taking in to account the risk invloved and subtract this amount.
What you are left with is the maximum a developer would pay
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auThe 2 common types of contracts used are the HIA and MBA contracts.
If the builder is not a member of one of these inductry bodies find another one.
If they suggest a different contract reject them. These contracts are written in plain English and while they look after the builder will protect your interest and both include penalty clauses for late completion
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auI agreee with the majority of posters here.
As I said in a previous post we are currently involved in project managing 85 developments for clients from all over Australia.
I also own my own building company but use outside builders for the projects we manage for clients.
If you take the all up cost including driveways, fences, landscaping etc, the “retail” cost is $1,050 for good finish up to $1,200 per sq mt for great finish.
This is the price in suburban Melbourne at present. It may differ interstate.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.au
