Forum Replies Created
I’m investing in an independent TV production company which is shooting an entertainment pilot later in the year, whose business is developing talent and creating a concept and brand.
plus storing and growing earned and other passive income in property of course.
also investing in intellectual property (aka, mine!)
joy to the world
I’m hoping to buy 4 more this year in an area with around 10-11 percent CF and (I reckon) unlimited CG
or else, like westan, the classic property with problems, (cosmetic) which you can fix and turn into 20 percent yields.
Once i figured out how easy it is to call people, get quotes, have it done, and how inexpensive it is in NZ, it really set me free as to what kind of property I can buy (any kind! for the right price!)joy to the world
hi Marisa,
on the contrary, i believe there are still heaps of three main kinds of deals i look for around
type a)
10-11 percent in good nick, rent as istype b) 17-20 percent yields once renovated/maintained, (including capitalising the cost of that into the purchase price)
type c) 12-16 percent and the odd maintenance issue, or maybe could renovate further down the track
i went for type b) because i wanted to maximise my cash
PM me your email address if you want to see some actual examples with pictures
re: 10 percent management fees, that equates to
about 2 percent of the yield, so let’s say in Aus it’s 5 percent, i.e. 1 percent, then if your nZ property was 1 percent higher in yield than your Aus ones (it is, and then some) you’ll be OK, so don’t get bogged down on that one OK!
joy to the world“Hello.
Please I need your advice
I’ve founded new investment company. Does anyone work with them?”Ummm, dude, if you founded the company, you’re supposed to know that kind of stuff.
If you mean ‘found’ then I take it this is your ‘due diligence’?
(I wonder if your English is good enough to even go there….)
>Does anyone work with them?
>What can you say about it?ummm, it’s satanic?
>I’m beginner in this >kind of business and I >want to get some money…
what ‘kind of business’? web-sites? property investing?
*aaaargh****
>Please can you help me?
I dunno, do what? try to figure out why nobody’s doing business with the investment company you ‘founded’? (or was that ‘found’…)
>This company seems to be >good for me.
Dude, so is spinach. but to milk (ha ha) the food analogy for a minute longer, i think you’ve bitten off more than you can chew…
joy to the world
haha melbear, my house which cost me 16k had a land value of 800 bucks, so even with freehold properties, you can often depreciate just about the entire purchase price anyway, hehe!
I remember seriously looking at a property for 35K about a year ago in Greymouth, NZ. (west coast area.) GV 55K, 5 bedroom, right in town next door to the KFC, views, close to the polytech – would rent for 280. The yield was stupendous at 41 percent. I didn’t go for it because of the liability if vacant – students? move out over the holidays? I was unsure. cost of land lease 10k p.a.. so bad. and then of course no CG potential as you don’t own the land.
It was for sale for ages, nobody wanted it. actually I heard that sometimes with leasehold properties you can buy the land at market value and it can actually work out OK.
joy to the world
hi all
yeah the standard going rate seems to be 10 percent in NZ ‘full service management’. Just depends what is included for this. 5 percent sounds good, but maybe they charge you through the back door instead, i.e. separately for this that and the other. letting fees, inspections, what not.
Also the poor (i.e. Sydney) landlords with 2-3, 5 percent yields can hardly afford more than 5 percent in fees, can they? They’re already losing money…
joy to the world
yep – you’d want to achieve about 15-20 percent if you bothered fixing up an old place – otherwise just buy the 10-11 percenters in good nick.
I did it twice (on purpose to maximise my cash) by buying ‘problem properties’ that were no use as they were (even though tenanted, it was the wrong sort) and by sorting out those properties maintenance and redecorating, i was able to achieve 20 percent returns from day one *even on the combined ‘purchase price plus reno’.*
joy to the world
the louder someone is yelling, the more fun I find them to debate with.
I have no idea, really, – I think I am cautious (I.e., I would and do tend to follow someone’s advice who has done what I want to do before, i.e. Steve)
but the world, AKA people that don’t invest, has told me ever since i started that ‘I’m crazy’,
(10)but as i have 100 percent equity I actually think I’m super-conservative – so far i’ve been too chicken even to gear *at all*!!! (1)
Buying three properties for the price of one, i get three rents, so risk of vacancy and loss of income is spread. (conservative.)
(that’s all gonna change folks…clean credit check, tick, eliminate consumer debt, tick, one year of stable rental history, tick, confidence up , tick, etc etc)
I reckon by the end of the year I’ll be geared up to the eyeballs (by my standards) with about a 70 percent LVR. Maybe up to a 4 or 5.
but i would still call myself risk-averse.
Lower-priced properties (i.e. accessible to the maximum amount of buyers in the market, therefore always more demand, therefore easier to sell)
i think are a great niche market which I have kind of discovered, without realising it (really I just bought them because that;s all i could afford at the time, and it seemed better than nothing) – but I’ve seen the cheaper houses out-perform more expensive houses for capital gains *in the same market*, over and over again.So even in the future, I would rather have ten 60k properties than a 600k property. More flexibility (can sell one, hold other nine)- multiple streams of income, etc etc)
Also, I quite like how you can own a measly $100k worth of 20 percent returning property which equates to about 20k per year, which is basically the rent on an 800k house( a 2-3 percent yield) – a house I could never afford to live in otherwise. To me that is a beautiful and special concept…
joy to the world
phil – AKA “Still finding my forum feet ” –
I reckon you’ve SOOO found them. Couldn’t have said it better myself.joy to the world
Kiyosaki said diversify so often means ‘deworsify’ – people have to rush around doing all sorts of investments because nothing is doing particularly well.
monopoly, like you I owe nothing on my investments but I am about to start (gently) gearing – number four property will mean rents from 4 properties cover repayments on one. Property 5 will mean that rents from five cover repayments on two…6, rents from 6 props will cover repayments on 3…at that stage I have doubled my portfolio and Still have 50 percent LVR. I will probably carry on down to 30 percent LVR, and feel still fairly secure, being a quite risk-averse person. So I am expecting to get about 4 more this year.
after that i’ll wait till either rents rise or properties go up in value, and then get more!joy to the world
I built a garden shed (kitset,) $390 on the tenant’s request and and charged the tenant an extra $5 per week, 130 percent return on shed p.a.
tenant was really happy, too
joy to the world
“A true definition of a +CF IP should be….”
A while back we had here ‘the true definition of a millionaire should be’…….
opinions ranged, and nobody could agree. *yawn*
tax strategies, income, equity, LVRs, borrowing capacity, too ‘rent-reliant’, no money down – one juggles these kind of factors when one invests to be able to keep on investing – perhaps no money down with a CF surplus is a holy grail, because it means ‘infinite returns’. It’s no longer a ‘percentage yield’ on what money you have in the deal any more – because you have no money in the deal! looks all very fancy on paper -.
If that’s the only kind of investment you buy, or want to buy, or think is worthy, that’s fine – go for it. they’re out there. You’ll have to look harder than most, which may take more time – and there’s your time/money study again. Your call as to how much money your time is worth.
And you not only have to find them, you have to arrange finance for them.If you can get 100 percent finance and have them break even, great! 15-20 percent gross yields in NZ as I own should achieve this on current interest rates.
however, whether you can get 100 percent finance and replicate it is another matter.
10.4 percent yields (the 11 second solution) should break even at an 80 percent LVR, an LVR which is also replicable as it keeps the banks happy.
think that this is a key to the whole concept of CF+ve – you can keep going. Is it better to keep going and have 20 percent equity in the deal, or stop – because you can’t find enough deals easily that break even on 100 percent lends, or – even more frustrating, you can find ’em, but the bank won’t lend you 100 percent?
joy to the world
Yeah, there’s a name for people who do things just to waste time or get up people’s arses, and that’s ‘tyrekicker’.
So Martin is an employee/agent/sycophant of Jenman, surprise, surprise, (not) – Jenman is probably paying him to be the bad cop so Jenman doesn’t get his hands dirty. I wonder if Martin realises he’s being used as a sacrificial lamb?
*yawn*, it’s always the people *who haven’t done it* that yell the hardest about how it can’t be done – meanwhile the rest of us go out and prosper, growing our empires – and unfortunately
are still outnumbered by 95 percent of the world who will be ‘poor’ when they retire, who yell and scream louder and make more excuses, such as martin – ‘it must be impossible because i haven’t done it’. to which the argument is ‘it must be possible because Steve has done it’.There is an age-old argument that comes up again and again, to the tune of ‘but that was then, that wouldn’t work NOW’. So the answer is, either wait until the exact same point in the next Australia property cycle where Steve started, and get to it – or, go find where the cheese has moved to. The closest place where i think it is at the moment (i.e. where you can still find loads of the classic ‘steve book’ 60k property, rents for 130 per week, will go up in CG) – is NZ. That’s beyond most people’s comfort zones, and that’s fine – but it doesn’t mean Steve’s book doesn’t work, it meant that they used location of property as an excuse to why they weren’t prepared to do it. OK, it’s not for everyone, but it sure works, you can do it any time, and the cheese does move now and then, but you can either go find the cheese elsewhere or wait for it to come back, or winge, or negative gear, or buy shares, or do nothing, or build a business.
All we – as investors out there doing it RIGHT NOW – can do is (like Steve does) share our knowledge and try and empower the ‘ordinary Australian’ AKA eachother, to realise even they can get into the market – that there is an alternative – that even if you couldn’t afford to support/pay into a negatively geared property, why not buy some positively geared ones instead which will actually make you money?
I know someone on an income of 10k a year who still managed to purchase three properties in a year and is about to get the fourth. All CF+ve of course.
Oh, and Martin, when you get back from the pub where i infer that you are drowning your sorrows with alcohol, then eat this – hypocrite – dissing others for quoting others, and quoting like mad yourself. (jenman, books, etc)
And don’t bother replying with a one-liner if you’re drunk/hungover, as a terse/grumpy reply doesn’t cut it here – we have a lot of intelligent investors who like a debate that challenges their view-point as much as anyone, but we don’t like to kick a man when he’s down, either…
yeah one more thing, the book? Steve’s book? OK, let’s say there’s one person out there who hasn’t read it yet, but puts it to perfectly good use – to put their coffee on, so the table doesn’t get marked.
the next person also puts it to good use – they’ve read it from cover to cover, understood it and taken action. both bought the book, both did different things with it, both got different results.
Of course HAVING the book is not a guarantee of anything – but READING the book and undertanding it, and taking action COULD give you the knowledge you may have been lacking before you bought the book-
to start investing.?cheers-
Minijoy to the world
Hi afloat, I thank and respect you for sharing.
4 million people plus?
like the population of NZ. i certainly haven’t kept quiet about the great deals you can get in NZ.
geronimo,
“Just look at the Oasis band, imagine having them as tenants? Scary.”Hmmm….are you saying the reason not to invest in Manchester is because Oasis are from there, and there is a chance that they might rent your house?
I doubt that, they’re millionaires…they own beautiful London homes in St johns’ wood, primrose hill kinda places.
i don’t really see where you were going with that???
but I admit, they’re not the beatles, I’ll give you that…
joy to the world
westan has beat me to it, i would have said exactly the same, Auckland, Hamilton, Tauranga in that order, although maybe the Rodney district and north of Auckland as far as Whangarei would come pretty high up the list.
You can totally get CF+ve in the centre of Auckland right now believe it or not.joy to the world
marc – yeah, and in the end trading is a job – you don’t trade, you don’t get paid.
joy to the world
I didn’t think it was insensitive in the slightest. I was trying to figure out if wallpaper was being ironic or something? nevertheless i am working on the come-back from hell, complete with calculations. just so I can make a fair comparison, Could you tell me what the rent was per week on the property back in 1987? and what it is now? Or was it your own home so therefore no income whatsoever and no tax benefits?
cheers-
Minijoy to the world
afloat, fabulous!
re: “What ever happened to buying in an area you know v.well “
If I limited myself to that (i.e. London, Sydney, Melbourne, Auckland, wellington, LA) I simply wouldn’t be in the market now! I just made it my business to get to know other areas which had properties which fit my investment criteria.
Have you heard of ‘who moved my cheese’? it’s about a bunch of mice who react differently to the fact that one day the cheese that had always been there had gone. Some went to find more…others stayed there and waited, wingeing about it….you get the picture.
The property cheese may not be where you live, (depending where that is.) And as a property investor, if the cheese has moved, and you don’t move, you end up like the mice in the book who didn’t respond to change….read it to find out what happened to them.!
OK another example – a friend of mine was a grain trader a year or so ago. Fancy boutique offices, Sydney beachfront residence. Negatively geared properties up the wazoo. Then the drought happened. Bugger all grain to trade. His cheese moved. He was unable or unwilling to change – (learn to trade something else? etc) so…..
the business went under, very very fast. no more beachfront residence either. now he’s delivering take-aways. but you know what? he looks happier than I’ve ever known him, rather than stressed. He seems less arrogant and more chilled too.joy to the world
DD, have a fabulous time – you guys deserve everything you get.
*respect*
joy to the world
