Hi Markerman

What page are you referring to specifically? That might help me understand the point you are trying to clarify.

In the RESULTS program, Steve talks about using the figure 5% for calculating the purchase costs, ie stamp duty etc. He also seems to base some of his calculations on 8% interest, depending on the strategy you are trying to employ, for example if you are doing a buy and hold then maybe you could average out the interest cost over a year. In the case of Buy reno, Sell, Steve has a formula that uses an interest rate of 8% pro-rated for the length of time the property is held for.

Hope this helps
Sue

Hi All
I believe you will find from what Steve is saying is that 10.4% is the figure that will give you the returns without taking cash out of your pocket.

There is more to building wealth through property than relying on either the 11.sec solution that gives us the 10.4% return or for that matter relying on “the unknown” Capital Growth.

I also believe that to concentrate on the $ per week vs the % from a general wealth creation perspective is also flawed. Everything I have been learning about this stuff over the last few years has me believe it is much more important to concentrate on the %.

Sure there are those out there that promote, negative gearing, buy new, buy in the best areas and get the depreciation. What most of them doon;t tell you is that if you claim depreciation then sell, there is a countback effect on the capital gain. So I hear you say, don’t sell, well then by following such strategies, there is the risk of “lazy equity” “lost opportunity cost” “lack of porfolio management” etc, etc. To my mind EVERY property I buy is for sale at the right price and I won’t buy properties to buy and hold UNLESS they are positive cash flow.

The questions we all need to ask are:
. What are we trying to achieve with our property investing? Growth ( not talking capital growth here) or Income.

. What strategies can I employ to achieve my goals?

. How do I put these strategies into place?

. Is my property portfolio realising my goals (ie ongoing regular review of the portfolio)?

. Of the properties I have on my books today, how many would I buy again?

. Have I got lazy equity in my property portfolio?

Just a few thoughts
Sue

Hi Bridgebuffdoes Minor development include sewerage works etc, this is where I was coming from in terms of my comment re structural?
Sue

I agree Dom, good point
Sue

Hi Smiley 71

I wish you luck with your IP. I am concerned that you have said “hopefully” a few times and wonder if you have any more substantial evidence to support your “hopes” for growth and rental income.

Good luck
Sue

Hi Again
As for the issue of Asbestos, it depends on how acceptable this material is in the area you are proposing to invest in. It could definitely make it more expensive to repair things like windows etc as it needs to be treated with the proper care, suits etc, and you may find it difficult to get tradesmen to work with it.
Can I ask what area you are investing in?
Sue

Hi Smilie 71
I’m am seriously worried about your approach.
Are you looking to build wealth or save tax?
Are you looking for “growth or income”?
The comments I made on the post below ( cut and past the following link into your browser address bar) https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=26173
apply to your circumstances too.
Feel free to pm me if you need to via my profile page
Warm regards
Sue

Hi Jay Dee
Seems to me that you both need to agree on what it is you are trying to achieve by your property investing strategies.
ie are you looking for “growth” or “income”?.

By growth I don’t mean capital growth I mean by adding value to properties and moving onto the next deal by selling.

Have a look at Steve’s comments on Negative Gearing on this site. Also buy yourselves the first and third books he has published as a Christmas present 0-130 properties in 3.5 years and 0-260+ properties in 7 years, sit down and read both and I’m sure the fog will clear. If you are looking to find out how others do it wilth limited cash then also buy his second book “$1m in property in a year”.

I personally would never touch a -ve geared property again unless it was in a particularly high growth area (difficult in this market) and only then if it was supported by one or more +ve cashlflow properties.

My strategies are to buy houses with problems, find a solution and unlock the profit, ie cosmetic renos and developments /sub-divisions.

The problem with negative gearing is that you can quickly run out of cash trying to service the ongoing debt and once you have say 3-4 if you can afford to service that many, you then end up maxed out in terms of serviceability, then havve to wait for Cap growth till you can go again. So ask yourself this are you trying to create wealth or save tax?. The answers are mutually exclusive

Whereas if you are buying, renovating and selling there is more opportunity to not only make a quicker gain and move onto the next one but you are then building equity (cash) that is more readily available for other deals.

Another strategy is to buy a run down house cut of a block at the back, reno the front one and sell it and keep the newer one nearly debt free. Martin Ayles has done this VERY successfully, he buys one and builds two or three on the back then sells all but one which he rents out debt free.

If all this is too confusing then sign up for next year’s Propertyinvesting.com R.E.S.U.L.T.S mentoring program, I think sign up to this will be available soon and commences in March. I have spent the last year on the Program as a Premium Member and it has changed my life and my mindset around all this and given me numerous other strategies to employ aside from negative gearing.

As for selling your PPOR, then my belief now is that the PPOR is NOT and investing decision rather a “LIFESTYLE” choice.

Personally i choose to rent as it is cheaper and frees up my cash for investing.

Hope this helps

Warm Regards
Sue

Hi Again
I forgot to add there are a vast number of investors out there that would never need to buy via the net. These are the ones that do the legwork and build relationships with agents so that properties are passed to them BEFORE hitting the mainstream market.
A point on Cap Growth, with Steve’s strategies the Cap growth is a bonus that we do not count on.
I for one am not into “buying and holding” or “Buying and hoping” as Steve puts it. And I am into creating wealth not saving tax as an investment strategy.
Hope this helps
Regards
Sue
Sue

Hi Dee Dee
Mine is going fine, I demolished a house in Adelaide a couple of months back and am awaiting the Building and council approvals for my two dwellings along with the final stage of the Land division. No building is likely to start much before the end of Jan, given the Christmas shut down.

I’m currently in the market for a “cosmetic” reno to do in conjunction with my money partner and am looking at a prospect on Thur once I return to Adel (I’m in Melb at the moment).

I am also investigating the possibility of getting another deal up an running using the cash in my SMSF.

Other than all that I have heaps of Strategic Planning to do and tidying up of my “systems” both soft and hardcopy over the Christmas break prior to launching into Internet Business and Share Trading along with Property over the next 12 months. Oh and all the Personal Development, such as the Brendan Nichols inner Circle, Kurek Ashley’s Life Success Club and the RESULTS Bridging program I have set myself up for. So 2007 looks like being a busy and productive year.

Warm Regards
Sue