Apropos Queenstown, I’ve been here for the ski season in a property we bought half for lifestyle (think lord of the rings views every morning, walk to town!) and half because when we vacate, we can rent it for a 20 percent return. And yes it’s ‘worker’s accommodation’.

They are cheap too, under 75k. let me know if you want one as because I’m right on the spot I happen to know the owners who are selling before the real estate agents get their hands on them. However you won’t be able to get finance as they are a licence to occupy, and I went right to the top of the ANZ to find this out. Still. a great investment – even if rents stay the same for ten years (so doubt it because q’town is growing the fastest of anywhere in NZ – 76 percent in ten years predicted -) – you’d double your money and then have a nice little granny flat to plonk on the back of your gore section after (or whatever.)

Now if you want a freehold yield you can maybe get about a 7.5 percent, leased/rented to a head tenant for their workers accom – that’s the best deal i can find, it’s around 500k so get hold of me also if you want me to sign it up for you. last but not least I was recently trying to get 3 x 900k deals for 800k but the developer wouldn’t have a bar of it. they are all dreaming here, whatever you do don’t contact an agent because you will never get rid of them. they are absolutely the worst most crawling desperate agents here you have ever met in this country. They are whole other breed a bit like Sydney agents.

I agree with Q’towner, the apartment thing is gonna crash. if you are buying in Queenstown, I say, buy what is scarce! Cheap worker accom…20 percent returns…walk to town…under 100k. you can’t go wrong!

cheers-
Mini

Hi there,

Oh gee, little did I know I was being so contraversial. You know how there’s good debt and bad debt? Well, credit cards used for consumer goods is bad debt, but credit cards used for income producing assets – hey, nothing wrong with that.

Take the emotional baggage out of the word ‘credit card’ for a minute and look at it as an easily obtainable unsecured loan, a line of credit if you like. What’s the interest rate? 15 percent? Sure, if you want to earn fly buys or some useless thing. but there are cards with as little as 6.99 percent (for six months) and then up to ten.

I don’t see the problem at all especially as NZ finance will cost you 7.5 percent.

In fact, i think it’s a damn clever idea.

Yes, the axe is sharp and you could hurt yourself. But does that mean axes are bad? Or very good because the sharper they are, the better to use to chop wood?

I know that if I could get my hands on 100k credit card, I wouldn’t buy consumer good with it, I’d put it to good use. I’d be renovating..

In fact, can I just mention? I prefer to use my credit card as much as possible, simply because my tax returns are much simpler for my administrators if I have less cash receipts to process.

In Graeme Fowler’s new(ish) book there is a chapter with an investor who uses credit cards quite a lot in order to get started. It’s just another form of finance. I don’t even think it’s more expensive than lo-docs. (if you pick the right card of course.)

Basically people who are going to do a deal will do it. People that won’t wont’, and they will make excuses as to why they can’t. In the case of ‘but I don’t have the deposit’, well, that was just one of infinity workarounds. For a more experienced investor, I might have suggested some sort of vendor finance no money down type deal.

Anyway, feel free to sue me for posting on an internet forum, if I caused anyone financial ruin by suggesting such a radical and heinous thing!

I guess it’s sometimes better to not share different ways you can solve problems, because someone somewhere might not like it.

All I was saying is that you could either do the credit card deal now and get into a property, or else you could save 20 percent of your wage (if 50k per annum average income)for a year and save the deposit. but the way I look at it is what will you lose by staying out of the market for a year?

What would it cost you to borrow 10k for a year?
1 grand? even at ten percent per annum?

Can you make more than an extra grand by doing the deal now to justify borrowing the deposit as well? Sure you can! If you buy in a growth area, why not assume a nice low reasonable 5-10percent capital gains for a year? you get capital gains on the whole property remember, so you just made 5-10 k holding the property for a year – that’s more than the 1k it cost you to borrow the deposit. I rest my case…controversial though it may be – for now!

cheers-
Mini

ask a RENTAL manager who is NOT connected with the sale of the property you are thinking of buying!

I.e. if the property is listed with Lambertons, ask Harvey’s rental manager what they think – and vice versa. You will find that the story will vary. The selling agent will say ‘this property will rent for $165 a week’ and the one not selling it to you will say ‘$135 tops and only if you fix up this that and the other’. But the truth is more likely to be the worst case, and anything on top is a bonus – at least that’s being quite prudent about it (always recommended!)
cheers-
Mini

http://www.nzpropertytogo.com/birddogs.html

hi Eloise
If it’s your first property I wouldn’t recommend anything too tricky. A bit daunting. Just buy one in a more ‘normal’ way first – go see a broker (wizard, ANZ, BNZ, etc) and go see how much you could borrow. Let’s say they do their fancy calculations and they come up with 100k. (probably more but let’s say worst case.) And let’s say they tell you they could only lend you 90 percent. So you either have to save up 10k or get a credit card with a 10k limit and cash advance it into your account to show the banks you have the deposit! – and then go shopping for a house under 100k. Preferably one you can add value to with not too much work. either Subdivide…then sell off the extra piece of land when it’s complete. subdividing is the sort of thing that while it’s being rented out you can do. Or get the sort of property that with a bit pf minor love i.e. paint, maintenance, new fittings, heat lamp in the bathroom, new lino, paint kitchen cupboards and put new handles on, new benchtop, that sort of thing. Not necessarily wielding the tools yourself of course but just ORGANISING the work and making sure it gets done. Or else you could sort of rough it for a while and live in a place you are renovating. Banks like lending people for their own homes and they might give you more than they would if it was an investment.

So the other option if you have no deposit and can only borrow 90 percent is to tell the real estate agent (when you see one you want to make an offer on) that you can only borrow 90 percent so the vendor would have to wait a year for the ten percent. But if they would be into that you’d make a higher offer to compensate. Then you may end up getting a vendor who hasn’t had any offers and they might take you up on it. You would have to get a decent lawyer ( a good smart one recommended) to draw that up of course especially if it was your first deal. But that can definitely be done, I know people that have done it.

However borrowing the deposit is kinda the easy part, family is always an option for some…personal loans…whatever!

Or just make yourself a goal to go and sell a whole lot of deals and save it up and then go for it.

Anyway good luck, and don’t wait too long or dilly dally, you’ll regret it if you do!
Go see a broker tomorrow!

cheers-
Mini

I agree with all comments. To me it’s not a ‘proper’ investment as you don’t have any control over it. The person who made the money here is: in order: the person who renovated/built the block…the person who organised the furnishing of the units and the management of them as serviced apartments…

not the ‘investor’ being lured to buy them on a 7 percent yield. All the people have taken the profits and left none for you.

If you like I will add you to our mailing list, the last few deals we have put out in Chch were either 10 percent cashflow positive, freehold, and only six months old, and walk to town…
or, under $150k, freehold, on a 9 percent or better return, with the ability to improve the rent, yield, and value by doing a small reno (5-6K average) to modernise – all of which we provided a project manager if the client wanted (but they didn’t have to.)

Those are the sort of deals that are fantastic buying in Christchurch at the moment in my humble opinion. Something you can DO something to.

cheers-
Mini

http://nzpropertytogo.com/birddogs.html

Hi all

CF+ve = you can hold the property painlessly
CG’s = you make money if the property goes up in value

idea – buy CF+Ve where it will go up in value.

it is no more speculation to buy for capital gains in a town that is experiencing growth as it is for Statistics NZ to predict future growth for the next x years.!

(well then they’re speculating then too! But with good reason! Same reasons as we’re buying for!)

Statistics NZ tell us that Queenstown, NZ will have 76,000 people by year *whatever*. 2025 I think. (it has 20,000 people now.)

Do you think that lakefront properties will go up in that time (even if they’ve gone up, up until now?) Sure I do.

Okay?

Now about that capital gains, it is SOOO RUBBISH that high CF don’t get capital gains, it’s like saying groceries don’t cost as much in smaller towns.

Do you see?
Hmm, I don’t have time to really write so much about it now because I actually have about 6 deals to put out tonight. i.e. ten percent returns, in top locations, in top towns (45000 plus, 3 hours from wellington, or auckland) with subdividable sections, hah!

see the bird dog thread for deals we have found!
There are always going to be people who sort of don’t get how it works, are too scared, don’t know any property investors doing it, get talked out of it by others who yell louder or have stronger personalities, and so on. Those people are still sitting here justifying why it’s too dangerous for them to be in the market right now, the market is not quite perfect for them. they are victims.!

others like myself and my crew at nzpropertytogo.com are buying like mad and doing better than ever, at a time where it’s supposed to be harder than ever! Well it’s not! It’s easy!
So easy!!!!!

anyway, I don’t expect you all to believe me, that’s been the trend of the last 2-3 years here. A few saying, give it a go! it works! and 98 percent saying ‘what about this, what about that, it’ll never work, the market’s too unsafe’ and then basically doing nothing.

Yah, well, see ya!
I’m off to do more deals

cheers-
Mini

Listen about the 99 percent versus the 1 percent, when I was yelling about CF+ve being on every corner 2 years ago the forum was full of 99 percent of people saying you’re mad, you won’t get capital gains, it’s so risky etc.

well those that did buy then when it was supposedly so risky did the best. Then it made it OK for a large crowd to follow who also did quite well. So those who can’t find the same properties at the same prices and the same yields in the same towns as we were buying then have perhaps decided the market is over.

But that is ridiculous!

OK those same properties are selling now for twice the value on a ten percent yield not a 20 percent yield. And we are not re-buying THEM we are buying other sorts of deals.

Those deal don’t exist any more- at least not in those towns, at those prices, and those yields.

Back THEN, we would buy a house for 27,300 which rented out for $110 a week.

But today, I would buy a CF+ve property on a 3000 sm plot of prime land in a city of 60k growing at twice the national average – you betcha

Would I buy several hectares I could subdivide into 17 sections in the same town, a town with a shortage of sections, a site right next door to an established subdivision of 300k homes? would I then get the DA approval and then onsell for 100k profit in 4 months? Sure I would.

Would I buy a 20 percent yield leashold property in a town expected to grow 76 percent in ten years? With zero vacancy and one agent reporting 300 people on a waiting list for rental properties? Sure I would.

Would I buy something for 220k that I could re-sell for 300k + in 3 months with a valuation to match? sure I would. In fact I’d buy as many as was humanly possible!

Would I buy a cheapie house for 35k half an hour out of a town where yields had sunk below ten percent, on a 16 percent return, where the town was expected to swell by 5 percent population in the next few weeks due to industry moving in?

Sure I would.

Would I buy something in one of NZ’s largest cities, walk to town, less than 6 months old, and rented to professionals, on a ten percent yield?
Sure I would.

Would I buy a house for 67,500 on a private sale 11-12.8 yield assessed – where other comparable sales listed with agents are around 75-80k? In a market where properties sell on a 9 percent yield? Sure I would, and I actually money-back-guaranteed the clients that one would value up!

Would I buy a subdividable property for 55k on a ten percent yield, where you could also add value to the house and raise the rent? Sure i would!

etc etc etc etc etc

These are all deals that I bought or offered to the client list in the last month or so

so, yeah, I call it ‘forced capital gains’ – some call it value adding, problem plus solution equals profit, etc etc

it’s all there for you
and some people will even offer it to you on a platter and hold your hand through the process for a fee, fancy that….

http://www.nzpropertytogo.com/birddogs.html

cheers-
Mini

hi everyone
thanks for that westan

All those deals Vicky found were fabulous but they are all gone now. However I will have more, if you wanted to join our list it is completely free and we pitch deals to clients on spec.

More information is available here
http://www.nzpropertytogo.com/birddogs.html

I probably sound a bit like a seminar here (steve taught me well) meaning ‘you can make money in any market if you know what you’re doing’. yes, I see yields and so on in the US and if it wasn’t for George Bush maybe I could be a bit more excited, but also I know the NZ market better than most these days after two years of
‘total immersion’ , that to me is as priceless , as I can find deals where yield plus capital gain created = the same result as a high yielding US property, and NZ has other advantages to Aussies too. So then if you force capital gains, you can do it quicker, which is another main factor. Sure
you can do that anywhere but the reason I am still in NZ is I know it and have a network, and that to me is priceless.

So, how’s the market? Basically 2 years ago we were buying things on a 20 percent yield that people said ‘you’ll never get capital gains there you know’ and they went up heaps, doubled etc.
Perhaps those people were either just concerned with cashflow, or speculating – but they made money without even necessarily doing anything, basically!

As the market started rising – yes even in the small towns – people smelt money, investors came in droves, prices rose, and all you’d do is basically buy ’em and capital gains would take care of the rest.

these days we look for a different sort of deal, one that is going to get capital gains not just because ‘the average house price in NZ is going up’ but because of A REASON. this could be area -specific…or property-specific, i.e. a deal that you can “force” capital gains to happen to, because of *doing* something.

All of our recent deals have had some sort of “double up-side” to them as a hedge to whatever the market is going to do.

I really really doubt that the cheapie deals will go down. There’s just too much demand for them, and always will be! it’s the overpriced or million dollar or brand new ones, that you buy at their peak, and you can’t do anything to raise the value to, that *might* suffer, depending on supply and demand, where they are, that sort of thing.

I am constantly surprised at the amount of cheapie deals being sold to home owners, not just being traded from investor to investor. Investors tend to think they drive the market but statistics and my experience say it’s homeowners, all the way.!

The last two properties I owned which I just sold (like Westan I sold some of the ones that had made the most capital gains and re-invested in areas that I thought still had capital gains to go – still in NZ – )
went to owner occupiers not investors, and I am hearing the same story from other investors I know selling in NZ.

There are other things we are doing now, focussing much more on, subdividing is a biggie – adding units on the back, that sort of thing – you might not be able to buy CF+ve in some towns any more but if you split the section and sell off half, you often can.

Sometimes even just selling with DA approval is enough to make 70, 100k on your deal you just bought, something that might only take you a matter of months. Something that would take you 2 years to make if you were waiting for the market to make you 10 percent capital gains a year.

So this is the kind of deals we’re moving into in the market now. We’re still buying decent buy and holds if we can find them, but really, we want a second reason as well that a deal’s a great deal.

I don’t really see prices going down. Not the sort of deals that we’re buying, anyway! Look at the same time as prices in Auckland were ‘flattening’ and the whole headline thing was looming (Auckland of course is so big that it affects the stats for the whole of NZ) – at the same time as that, Taranaki for example was going up 45 percent a year on average. That means that where you buy (my aim, anyway) is to ourperform and defy the market! We do this by specifically buying in a sector of the market, and area, etc. Or, to quote Steve, problem plus solution equals profit. Loads of towns where i thought prices might go down, they haven’t at all. Part of this is that just when you thought prices couldn’t go any higher, rents started to rise.

anyway, our system is basically a network of freelance spotters who pitch me deals and I am sort of air traffic controller, matching investors with deals. this way the investors have access to deals from all over NZ.

cheers-
Mini

“Harsh comments on this topic from a friend of mine from the UK:
“If you bought anything for 18-40K pounds in the UK especially around Manchester then you would:
1. Be buying in a disaster area full of druggies, pimps and wino’s. “

Haha, sounds like what Auckland w@anker friends of mine said mid-2003 when I was buying cheapie houses in Taumarunui, (in fact most of NZ) for 16-30k
The 16k houses needed work, the 30k ones were palaces!

“2. The property would be fit for the wreckers and it would be ready to condemn.”

see above!

“There are no worthwhile properties in or around Manchester for that price that would give you anything like that return.”

Paradigm. My Auckland friends said the same thing. They are begrudgingly now admitting that I did get 106 percent cap gains while earning 20-24 percent cashflow at the same time. They are now starting to look at areas outside Auckland.

Even within Auckland the worst suburbs (Otara, Manurewa, Papatoetoe) from memory – are the ones that performed the best in CG’s. More than the blue chip Takapuna type suburbs that everyone who doesn’t know anything thinks will get more cap gains.

“The suggestion is at best misleading, delusional and at worst akin to pyramid selling or buying a high rise in Surfers for the ‘investment’. MAD!
Most of manchester is a tip, a place to wipe your feet after visiting, a place to run not walk from – those prices get you a public housing unit in a REALLY POOR area at best.”

OH dear oh dear, if it didn’t sound so damn familiar, I’d take more time to respond, but it is EXACTLY what people were saying about NZ. Now it’s been ‘proven’ that a lot of people did make money and others followed so the legend perpetuates. But I feel as though afloat may be to the UK what Westan and I were to NZ. I.e. the first couple of people to talk about what you could find there deal-wise in a new territory where what we were doing was way way in the minority.

I’d personally bank on Afloat being dead on. And afloat LOVE to talk about doing business with you!

cheers-
Mini

PS Allyvn
I am a bird dog in NZ
We have all these local spotters who sign up deals and we provide 50-60 photos, a blurb, title search, etc – everyone who spots deals for us also invests in their area so knows all the good inspectors, rental managers etc

our list is free to get on and $2500 upwards to take a deal ($2500 for the typical cheapie deal under 100k.)
Most of our deals are CF+ve unless they are just under – say “9.5 after reno” in a big city like Christchurch. We occasionallly put out “unusual deals” – like we have one at the moment, that are pretty interesting, although not CF+ve – such as we have 3+ hectares of land in a city of 66k for 360K where land is scarce 7k from the CBD which would chop into 17-30 sections depending on size, comes with a feasibility report which we are getting on Monday with costs and timeframes

our list is free to be on

firstly, are you guys speculators, forex traders, or property investors?

2) fear and greed are great motivators used by people who sell seminars to get bums on seats.

‘don’t get burned when the bubble bursts!’

(fear)

‘we’ll tell you how to make lots of money out of the carnage that’s coming!’

greed, and speculation

skillful investors know how to make money in property in ALL markets. if you don’t, then you are just an unskilled victim, waiting for the market to be perfect for you. good luck waiting