Forum Replies Created
Hi Guys, they are definately still there, but you have to look harder and harder to find. Have just bought 3 in the last 3 weeks. Keep in mind we are looking at property EVERY SINGLE DAY!
You’ll find it increasing difficult just to find them on the weekend looks, but they are still there.
We use this rule as a safety net for our wrap properties. t’s just a better way to protect our investors who enter Joint Ventures with us. If the wrap goes bad, they can stick it out there and rent it (and still make money). BUT, if the numbers still stack up and the formual isn’t met, we proceed and buy the place.
The higher the price, the harder to hit the formula. Normally you need to hit areas that are more suitable to cashflow strategies rather than capital growth strategies. ie fringe suburbs or rural.
No, I won’t tell you were we purchase. Why not? because next week I’ll have 20 new wrap competitors shopping my areas. [
]Just keep placing the offers guys. You realise the more low offers we make, the better it is for all of us as it lowers the market expectations of higher prices.
Only my 2 cents worth,
Mike
Remember, life’s about Family, Fun and Finance (probably in that order).
Mike
Director
http://www.PositiveCashflow.com.au
“Positive Cashflow for a Positive LIFESTYLE”
because
“Life’s too short to be Negative”Hi Sooshie, no offence at all. One thing about property investing is you grow big shoulder and a healthy self esteem.
I actually hate the word “weasel” as it sounds a little derogatory, “safety net” clauses or “fall-back” clauses are nicer terms, but they still give you the same protection.
A side note. I just secured a deal by writing a written contract offer. An expression of interest had been received by the agent (from another wrapper), but because I put a more “committed” offer down with a deposit (only $50- I might add) I secured the deal.
Much like going on a date. If I said to a woman “I’m really excited by you, I want to go out on a date with you at 8pm on Saturday night”, there’s a good chance I’ll get that date. If I said “Yeah, look you look like you could be sorta OK, if ya wanna, some time we can maybe do something, whadda ya reckon”. My dating options are limited. [
]. Only say this for fun value, very happily married guy.Point is though, it’s worth the extra effort to secure a deal (in my opinion).
Love reading your posts Sooshie, you add real personallity to the forum.
Best to all,
Mike
Remember, life’s about Family, Fun and Finance (probably in that order).
Mike
Director
http://www.PositiveCashflow.com.au
“Positive Cashflow for a Positive LIFESTYLE”
because
“Life’s too short to be Negative”Hi Louise, first I need to say I haven’t attended or completed any of Henry’s courses or seminars so my comments need to be taken with a grain of salt.
That said, I have followed forums for a while now and Henry has been the subject of discussion both positive and negative. Keep in mind, any information posted on a forum is subjective at best and it’s difficult to ascertain the truth.
I have heard incidence of a video being played for the first day and a half, and the presenter appearing live well into the course. Again, I have no idea if this is accurate or not, and I certainly wouldn’t go and make any decision on this as I read it on a forum and there may be no substance to it at all. This could be a huge injustice to Henry, so I simply mention it to encourage you to ask more questions before you outlay your money.
I’d strongly recommend the Property Masters Seminar, as you would have access to many different presenters on many different proven strategies. These are all well respected top 5%ers in their respective fields. Plus it’s only $2K leaving you $13K left over to actually purchase a property.
I think similar to Steve (God help me [
] ) in that every substantial sum of money is a deposit on a house. There is a CANYON of information available in libraries and forums etc… without the need to outlay $15K. For many people, $15k could be two years savings. Then it would take you another two years to save the $15K again for a deposit, and by that time the information and stragey presented two years prior may be out of date.In my mind, you can’t go wrong with spending 3-4 hours per weekend looking at property. Make sure you put in written offers every single weekend, make sure the rents in the area will cover the loan repayments, rates and insurance and buy a property. Offer 75-80% of the asking price.
You’d be suprised how much you’ll learn talking with real estate agents, and by visiting/networking with investors at investors groups.
Only my two cents worth.
Mike
Remember, life’s about Family, Fun and Finance (probably in that order).
Mike
Director
http://www.PositiveCashflow.com.au
“Positive Cashflow for a Positive LIFESTYLE”
because
“Life’s too short to be Negative”Hi Tim, we banana benders are a crazy bunch. [
].Thanks to the two-tier rubbish that gave QLDers a bad name, our contracts now have a 5 day cooling off period as well. As Soosh mentioned, the wiesel clauses are still valid on your contract.
In Qld, building/pest and finance are already written into the standard contracts supplied by the REIQ, so you don’t need to repeat them. Plus it let’s you put in your particular special conditions (weisles) without the vendor being scared by a huge long list.
Make sure you put in the Financier section of the contract “Buyer’s Choice” so you can’t be roped into junk interest rates by the agents/developers lender.
A second point about Qld, it’s just become law that EVERY house sold must have an electrical safety switch installed and the Ruling is that it’s the BUYER’s expense within 90 days of settlement. We add this into our special conditions (that the Seller installs it) and haven’t had anyone object yet. Just food for thought.
Another thought, I definately prefer to have the offer made on a contract. We offer low and if a venodr accepts, I want him to sign it securing my position as quickly as possible. Some of my agents will make my offers verbally, knowing I’m good for the deal, but in this sellers market (which we are experiencing here at the moment), I don’t want to get guzzumped by someone who actually put pen to paper on a contract. Same amount of writing, more protection of securing the deal.
Most of our contracts look like the kids have done them after multiple offer cross-outs.
That’s my 10 cents worth (running a business I got my GST back. HeHe!)
Seeya guys, as a Qlder would say AVA GOOD Weegend!
Remember, life’s about Family, Fun and Finance (probably in that order).
Mike
Director
http://www.PositiveCashflow.com.au
“Positive Cashflow for a Positive LIFESTYLE”
because
“Life’s too short to be Negative”Hi Sooshie, sorry I thought I’d posted to this previously but can’t see my post so obviously I didn’t hit send.
Further to Terry’s comment, it wasn’t until we asked for the actual Discharge Authority documents for our loans before teh bank took us really seriously. We ended up getting what we wanted.
Keep in mind also, that at times a bank may feel over exposed in a particular suburb, and not want to committ mor loan funds to that area. They can control this by restricting these “intangible” valuations.
At the time of revaluation, both NAB and CBA did the vals, both had different figures for both properties in question. Must have been the weather. hehe. <
)It’s a concern the banks doing that to you with the Professional pack. Makes you wonder what else they are “doing” to you or more importantly not doing for you.
Have a great day,
Mike
Remember, life’s about Family, Fun and Finance (probably in that order).
Mike
Director
http://www.PositiveCashflow.com.au
“Positive Cashflow for a Positive LIFESTYLE”
because
“Life’s too short to be Negative”Hi guys, Soosh you’re doing a great job with these links. Awesome work!!!!! I faced heaps of “hurdles” just like everyone else when I started the journey into wrapping. So, I decided to put together a site to help everyone out. Steve recommended I make the free Five-Part-Wrap-Course available for everyone on this thread so it can help everyone kick start their own learning curve. If anyone is interested in receiving this free course just send an email to
[email protected]It explains a heap of things in plain English so I hope it helps. Feel free to visit my website at http://www.positivecashflow.com.au and bring any of the links across onto this forum. The more help we can provide, the better for everyone. There are heaps of links for the FHOG in each state, REIQ, REIV etc…, other wrap sites etc…. Dozens and dozens of links. Bring em on over to this site. [
]Have just made contracts available for each state also.
Hope it helps,
Remember folks, life’s about Family, Fun and Finance
(Probably in that order)Mike
******************
Mike Kelly
Director
http://www.PositiveCashflow.com.au
“The One-Stop-Online Wrap Shop”
******************Remember, life’s about Family, Fun and Finance (probably in that order).
Mike
Director
http://www.PositiveCashflow.com.au
“Positive Cashflow for a Positive LIFESTYLE”
because
“Life’s too short to be Negative”Hi guys, Carolyn more than happy to help. Hope it did. It took me 2 yrs to get my head around it myself. [
]Hi Steve, sites going well. Actually I was posting the link on my site for this forum and decided to have a peek. Couldn’t resist thowing in my two cents worth on this post.
Actually, you brought up a very good point Steve (as always), is the paydown of the principle a requirement of Vic property law? I guessing that as opposed to tax law as our accountant has given us the all clear on the interest only strategy. Would love to hear some further feedback on this if your able to.
We’re actually in the process of getting a private ruling from the ATO to confirm it once and for all.
Great to see the forum building in strength. Hope I can drive heaps of traffic to it for you Steve. It deserves to be a winner.
Be happy everyone, life’s too short to be Negative.
Remember, life’s about Family, Fun and Finance (probably in that order).
Mike
Director
http://www.PositiveCashflow.com.au
“Positive Cashflow for a Positive LIFESTYLE”
because
“Life’s too short to be Negative”Hi team, hey I’m with Felicity. Keep in mind, that if you use the profit to pay off your debt, you’re really only saving cents, compared to investing the profit to fund another wrap that makes you considerable money.
Let me explain how my head works: (God help my wife) <
)Let’s say you make $10K profit for the year and invest this in the principle component of your wrapped house.(to give you a larger spread) At 8% interest this means you’ll be saving 8% on $10K ($800.00) interest per year. (rubbery figures)
So if you owed $100,000 before, you’d pay $771/month on a P&I loan(25yrs)
If you paid the $10K off(lets say as a lump sum for the exercise) your debt would be $90K @ 8% with repayments of $694/month(P&I). That’s a difference of $77/month. That means over the year you save interest of $66/month x 12 mths = $792. Still a good saving.
[Keep in mind, the difference between $771/mth and $694/mth is $77/mth, but the interest component of this is $66/month. 8% of $100K is $666/mth, 8% of $90K is $600/month being a saving in interest of $$66/mth. These figures are obviously going to be “rubbery” as the $10K is paid off progressively, not in a lump sum, but for the explanation of the concept, it’s fine]
Remember your Home Buyer’s repayment stays the same, so you only gain the difference in your interest saving.
Now lets say we use an alternative strategy to invest this $10K in another wrap property. Let’s say we have this $10K and use it for the deposit and legal on a $70K property(with a loan of 8% over 25yrs)and we sell this proeprty for $82K at 10%(over 25 years) on a wrap.
Let’s look at these figures:
Your loan repayments are $486/month ($63K loan @ 8%)
Your Wrap repayments are $745/month ($82K loan @ 10%) no dep for eg.Your monthly profit is $259/month. (certainly better than $77/month)
Now this gets better if you go Interest only on the underlying loan for a few years:
Your loan repayment: $420/mth ($63K @ 8%)int only
Your Wrap repayment: $745/mth ($82K loan @ 10%)(P&I) no dep for egyour profit is $ 325/mth
Obviously, while you’re saving $77/mth in the one transaction, someone else is creating MULTIPLE properties from the same $10K investment by duplicing the process each time and generating another wrap property.
Keep another few thing in mind as well.
When you sell a property using a wrap, you’re not allow to refinance that property while the wrap is proceeding(in QLD at least). Meaning if you put $10K into that mortgage, kiss it goodbye until the wrap home buyer decides they will pay you out, because you can’t redraw it or get it back out.
Also, let’s say you have decided to keep the one property and reinvest the profit in the underlying mortgage. This prevents you from purchasing another property as your cashflow is used for this strategy employed. If this Home Buyer goes into default, 100% of your wrap portfolio(ie your one house) is now at risk and not performing. And YOU have to keep working to pay the underlying loan repayment while you’re find a new home buyer.
Alternatively, if you decided to buy the second property, and one of the properties went into default, only 50% of your portfolio has suffered and the other property will nearly cover the underlying loan payments while you find a new home buyer. Much easier for you to find $100/as opposed to $400. Yeah sure the advance payments would cover the gap, but you’re making false progress.
As Felicity has stated, each to their own.
I have the Wrap Secret Library and I love it. My understanding of Steve’s strategy was to only invest 30% back into the underlying loan. There’s certainly logic in this strategy and it works GREAT for Steve and many others. I don’t think anyone could deny Steve’s outstanding success with wraps and his accounting background obviously encourages him to protect his investments as much as possible, which this strategy also does if interest rates go through the roof.
Persoanlly, we use the wrap profits to pay off our OWN home mortgage as this interest is not tax deductable. When we have $10K in extra equity in our own home, we then redraw this to purchase a wrap property, whihc makes the interest being charged on this amount tax deductable. We’ll keep going until our own house is a total tax deduction. We’ll never loose out house, as well have enough properties in our portfolio generating income to cover own own home repayments shoudl something go wrong. remember, the home buyer is paying the underlying laon Plus a profit to us.
This is only my two cents worth. It’s not right or wrong. Just right for me.
Happy investing all.
Remember, Life’s about Family, Fun and Finance (Maybe in that order)
Mike
Director of PositiveCashflow.com.au
“Positive Cashflow for a Positive Lifestlye”
because
“Life’s too short to be Negative”
]
]. Only say this for fun value, very happily married guy.
)
