Forum Replies Created
Hi Guys
I somewhat agree with Kerwyn – especially in today’s market. Especially if it’s your first property and especially if you don’t know the market backwards. I have recently started getting valuations every time I buy. As much for the lender as anything else ( as already discussed) to maximise my future purchasing power and equity faster, but also, to ensure that I haven’t paid too much for the property.
I didn’t used to though – it hardly seemed worth it for a 16k house, a 27k house! But $500 sure is worth it to show you just made $16k.!
If the property doesn’t value up, damn right I’m marching back to the vendor waving the valuation and getting a discount to go unconditional!
even if you still pay a bit too much you may be able to meet the vendor half way. Of course properties in some areas frequently sell for over valuation, but in other areas, they frequently sell under valuation.
In my experience of the market right now – it is easier to and you are more likely to buy under valuation with a property say over 300k and more likely to have the valuation not come up to purchase price if the property is a cheapie.
Basically this is because there is much more competition for the cheapies and not so much for the more expensive ones.
However! the cheapies are therefore (due to more demand) going to be less likely to go down in value, right?
I do lie awake at night pondering these things!
cheers-
mini“Valuation of a property is what it’s sold for”
Incorrect.
“what it’s sold for” is the Contract Price. “valuation” is the…er…valuation. As in a multi page document prepared by a registered valuer. This valuation may or may not have anything to do with the purchase price! It may be higher (yay!) or lower (boo!)But you are correct that in certain circumstances the ANZ will not require a valuation and will lend you X percentage (whatever your LVR deal is with them) of the purchase price.
I always get a valuation if I think the property is going to be worth more than what I paid for it, so I can use the extra equity straight away. In this way I can recycle my deposit virtually instantly and go again.
I am with ANZ too.
Cold – well I’m hald German and quarter russian and quarter scottish, so I don’t think it will be too much of a shock, albeit I’ve lived in sunny Sydney for nine years so now I’m one of those weather snobs that goes back home to wellington and says ‘brrrr’.
I think the key to queenstown is hi-tech clothing.
I’m talking gore-tex and such!
Stuff you can’t buy in Sydney and wouldn’t wear anyway. Real winter clothes!The cow? I can’t believe you haven’t been there yet (and you call yourself a local!)
Well I’ll look forward to de-virginating you.
So to speak.
!cheers-
miniHi all!!
caution, rant alert, this post is intended to press buttons. So be it.!
ah, bbruham strikes again. haha, yes and Buffalo is the new Tokoroa!!
?????????
I have two main reasons for not investing in the States. Just personal ones. One, broadly speaking, is George Bush. I am voting politically with my disposable income, so sue me, but these days, I actually don’t buy American if I can help it.
The other reason is that I reckon can make more money faster and have more investing fun elsewhere – where? NZ.
Why? Because I know what I’m doing! I know the market and I have a network.
I have a major advantage! Big Difference!NZ…Small market, and there I’m part of a ‘magnetic’ little community of like-minded investors who I helped meet and become attracted to eachother. You know, in the way that ‘like attracts like’. And keeps growing in the same way. and yes, that is FUN. I am part of a team, we are doing the same or similar thing, we are sharing, we are working together, we don’t see it as competing because there are enough deals for us all. Now if you’ve spent your life crawling over broken glass to find just one deal then you might not believe me, especially if you also only hang out with other broken-glass crawlers who think the same, and if you ‘re looking for reasons why not, then you’ll find them, just as I did with the US investing thing. But for me, teamwork is one way to make sure everyone can find deals all the time. And NZ is where I’ve got it. The team wasn’t put in place overnight, it took time, trust, friendships, relationships. That’s the FUN part! Playing with other people in the sandpit.! We help eachother, too. The bigger investors pass on the little deals, and the little investors pass on the bigger deals, etc etc.
So I am having fun, part of a crew, making money, and helping many others do the same. I’ve read ‘who moved my cheese’ and the cheese is still very much there in NZ ( – it’s everywhere, if you know how to sniff it out, make offers, get in first, have a plan, all that sort of thing -) – but I like NZ, I know it, it’s got so many things going for it (for me) that the US frankly so doesn’t. (for me for my personal reasons.)
Yeah, I did a seminar or two and THANKS TO THAT STEVE I do know how to make money in every market – up, down, or flat.!
If I were to consider branching into another market, I like the sound of China – or Asia in general, and some of the emerging countries in Eastern Europe – or, Europe in general.
“If he has to keep on buying property then really investment is just another job since apparently you never stop.”
The operative word being ‘has to’. He doesn’t ‘have to’ do anything.
Once you never ‘have to’ work again, you can do whatever you like. Now Steve stopped doing the things he didn’t like (running an accounting practice) and I don’t think he will ever go back to doing that somehow.But me, now all my professional life (prior to not needing to work any more) I’ve done something I love to do which is creative. it’s how I made my investing startup capital, and I still do it, I always will, and professionally, for free, whatever. I love it. It pays a fraction of what the same amount of time applied to a property deal would pay, but I do it anyway. For fun. Not cause I have to.
I do it for love, for fun, to keep busy, motivated, for belonging, for expression, for accountability, for a sense of achievement, for the sake of creating beauty or harmony. (what I do professionally is basically an art form.) So is what I do to feel my ego? Ditto Steve?
Dunno, but yeah, maybe, probably, why not? But not only. We also do what we do for the superego! The oversoul! The id! The whole person! and the family, the community, the world. Don’t we?
Talking ego for a sec – isn’t the ego – and the emotions – the thing that gives you passion? The thing that drives people? (apart from when they’re being driven by greed and fear, hehe…)
“I personally fail to understand how people would “love” property investing (except maybe it massages their ego).”
Oh! well, you obviously never played Monopoly as a kid ( or cashflow, as an adult) for fun – with paper money, just because! Property investing is damn fine fun! You should try it! It’s addictive…because of all the things that go with it, not just the bricks and sticks and dollars bit. That bit’s actually quite boring!
“I guess Steve is at the stage where he pays people to do all the hard work”
Damn straight!I don’t personally build computers, I buy them off someone who does.
Get it? Duh, we all do. Pay people to do all the hard work. Grow our strawberries. Manufacture our DVDs. We leverage our own time and skill for others. That possiblity is just TRADE and anyone can do it – not just Steve!For example if you buy into a property fund, you hand over your money and everyone else does everything for you. There are all sorts of ways to get people to do the hard work for you if you find it too hard or unpleasant.
If you think it’s hard work, farm it out. If you want to do it yourself, do so because it’s fun, not because it’s hard work and you feel that you must to all this onerous hard work.
“so its easy for him.”
Ah, another bloody victim.
Poor me, it was easy for you, but it’s so hard for me, because I am so feeble and pathetic.
Yeah, well, so be it. Keep singing that song, and it’s see ya later, get over it, change, or bye bye, i’m off.
It’s easier to never go to a seminar and sit there and diss them as rip-offs than to actually go to one, because then you might not have any excuse.
As long as you sit there and blame and justify, you sit there and blame and justify. get it?Carry on! Knock yourself out!
The forum’s full of it, cause misery loves company.!“However I don’t find the hard yards very enjoyable at all.”
Aha! You do get it…
“You have to research the town. Research the property. Check out the tenants. Negotiate a price. Repeat that many times as vendors always want the highest price (this may change in future). Screw around with banks. Hope the building inspection finds no nasty suprises. Pay lots of stamp duty.”
You don’t HAVE to. Obviously if it’s hard and not very enjoyable or lucrative and seemingly hard, onerous and pointless, like you’ve described, your ego isn’t going to get that much of a buzz from it (touche!) and you’ll probably quit and do something more comfortable or easier.
BTW NZ has no stamp duty. And you could use a bird dog. Banks – I wouldn’t screw around with them, I would just fill out one form and let the broker do the rest.
You do sound like you are having a very terrible time and not having much fun at all, so perhaps property is not for you, perhaps you are a failure?
But you can’t be! Your ego wouldn’t allow it! it’s not your fault! it’s the blasted banks, the blasted vendors, the blasted market, Steve’s fault, it’s the rest of the world’s fault! not yours!
You see? It’s just all psychology! people tend to do over and over things that make them feel good, empowered. If it ain’t making you feel good then maybe you could CHANGE the way you do it, systematise it, leverage it, whatever it, but just TWEAK and improve it until you start to whittle away at the sculpture in your hands called YOUR LIFE and make it better. Got it!?
“As for Kerry Packer et al, they ARE workaholics. Their whole life is defined by their job. They know nothing else.”
Yeah, so judge, judge, damn, damn. So if they’re all lacking and empty with their dollars (your opinion) you can feel all good about yourself in your EGO (touche again) if you have no dollars but lots of cut glass to crawl over (backwards, and repeatedly.)
“Keeping up property investing (eg in the USA) so you can advise other people is fair enough.
If you enjoy helping other people improve their wealth I understand that completely.”Oh, a small concession for Steve, how kind of you to deem him worthy.
“What philanthropic things are you doing? I am interested to know.”
He gave away the entire profits of his book to charity, which would surprise a lot of people who think he’s doing it for the money. he also has a charitable foundation which gives back to the communitycheers-
MiniQueenstowner, we sure have – we settle on our ‘garden shed’ June 27! Already have new phone number and jetstream sorted!
We are planning to stay for three months however the words have already been uttered just yesterday ‘but if we like it, we’ll stay until the end of the year’!
Can’t wait to meet you for a Pizza at the Cow!?
Oh lifestyle!cheers-
Miniprice diff. could depend on the size of the land and the street, not the dwelling.
crosslease properties are very common, they are a type of freehold, but you just own a ‘share in the whole land’ rather than ‘your own bit’. often there is a common area such as a driveway or right of way that both the cross-lessees can use.
I have a pdf document I put together on cross leases from various sources for our clients when we find cross lease deals so if you want it (or anybody wants it) just send me an email with your email address.
cheers-Minihi Michael,
I didn’t mean it like that, and I know, I was the instigator of this thread! I kept forgetting to check back, off in the Kiwi forum most of the time, and finally remembered to look, was surprised at the amount of pages and replies, and then on reading it, found it was mainly to do with your seminar.
I know what it’s like though when you have a business you’re passionate about and people ask you questions.
cheers-
miniand good luck with the bums on seats anyway
“Australian resident from being taxed on its profits in Australia.”
Yes that’s right hence the recommendation to have a NZ RESIDENT (important difference) structure.
The structure is a separate legal entity which is not you. You live in Australia as a resident for tax purposes, and your entity (not you) lives in NZ (for tax purposes) unless it is settled somewhere else and then it’s different again. Ask your accountant.
Let’s say it’s a trust, you know about trusts, they can have beneficiaries. Are you one? You may well be. You could as a beneficiary get some money out of the trust, if it’s made profits, to you, personal individual living in Australia for tax purposes, and then, yes, you pay tax on it. however if you leave it in the trust and don’t distribute it, it may not be ‘YOUR’ income and therefore ‘YOU’ don’t pay tax on it.
Someone does, of course, but it’s not ‘You’.
If I haven’t explained this properly then please check out a NZ accountant who specialises in investment structures.cheers-
MiniMy word, what a spruik-fest this thread has become Michael.
Just to answer some questions, the best way to check us out and what we do is to join our mailing list. Our information sheet is practically a seminar in itself (so they tell me!) and it doesn’t cost anything unless you take a deal. As you can imagine the cheaper the deal or the higher the yield the more people want it, so some of them go incredibly quickly. The reason being that a lot of the people that have seen the deals come and go develop trust in what we are doing, they might be on the list a while, and start off with no idea as to whether our deals are good or not. then for example let’s say that we bird dogged a ten percent yielding house in wanganui with a subdividable section, and they try and find something that good themselves and can’t, they might retrospectively see that our deals are good and therefore gain the confidence to act quickly and actually get one after a while. it’s a beautiful thing actually, people join the list as an ’email address’ and somewhere along the line they become people I email back and forth, then clients, then friends, and sometimes even business or joint venture partners!
it’s all very organic and we’ve never run an ad in our lives, apart from talking about what we do here. but as always it’s in response to questions, we only exist because people approached me to try and find them deals, Isaid yes, and suddenly I had a waiting list and needed some help! Which grew into a proper business that feeds about 5 or 6 spotters now, at least part of the time, and which is still growing!
A lot of goodwill out there and we couldn’t do it without it, wouldn’t be here without it.
OK, our prices, $2500 for the cheapie deals, $3000 for multi unit i,e. duplexes and so on.
A little more sometimes for the deals over 200k. Most popular are deals under 100k.
We have everything from 43k houses with 13.5 yields 1/2 an hour out of a major city, to brand new 10 percent cashflow townhouses complete with depreciation schedules in the CBD of Christchurch, but as you can imagine, one is ten times the price of the other! And quit a few in between too.
email me if you want to join the list with an email address that is preferably not yahoo or hotmail, as they tend to bounce.
and yeah we all have a website now!
and for Queensland, yep, DD, without a doubt, he’s fabulous. And if you want qualifications, just call him up, and he’ll tell you about his investing history. And you’ll say ‘ wow, I wanna get me some of THAT!’
cheers-
MiniI think in the end it’s whether emotion wins out over investing sense.
Do the numbers and see if you would be better off the other way around (viz. buying vs renting)
If so, and you still don’t do it, then you are making an emotional decision, which is fine, but at least try to be aware of how much that decision is costing you financially. Perhaps once you see it that way, you’ll see that you could do other things with the money that were just as emotionally satisfying.
Kerwyn,
great reply back, and *conspiratorial wink* – I hear ya – about ALL of it! welcome to my world!
So yeah, “assure me that his finance broker here could definitely get finance for him.”
Oh YAWN, now if just ONE single person could tell me they got finance in Aus for a NZ investment purchase secured against the NZ house, then I would believe it is possible.
I don’t mean line of credits against your Aussie house, either, I mean, finance on the future purchase! Well, I know the brokers are willing, but I don’t think the lenders are ‘there’ yet.
Besides why would you, you are exposed to fluctuations then. Borrowing in NZ is the way to go, and if you don’t believe me, tell ’em
dolf de roos says so.
cheers-
MiniI might be way wrong about the place as it certainly has substance (44 thousand people, or is it more?) and I even know people who have moved there. Westan is smart and he loves it. So maybe it’s fantastic, and I am ignorant. It’s a woman’s prerogative to change her mind.
Anyway, I did put out a great deal to our client list in Invercargill, the only one in the last year, for a 15.6 percent return. in a good suburb.
Like I said at the time, for that kind of yield, it all makes sense and I love the place. It’s just that I don’t necessarily want to buy 9’s there for capital gains.basically Nigel is right
The way to do it is with a “NZ resident” structure.
Or onshore/offshore hybridmasteraccountants.co.nz for the former
designertrust.com
for the latterDon and Liz! you live there! wow! awesome!
What area??
I’m moving back there soon myself for three months, to Queenstownmini
Hi awinner,
Although I am real real proud of it !! yippeee!! I don’t want my posting here to seem like it’s just about “advertising our wares”. The owners of this site are good friends of mine to boot. (Anyway hopefully nobody would think that anyway seeing as I have been posting here for years anyway since long before steve started writing books.!) However, since you asked…
we do actually have a website these days, (yippee!) it’s
http://www.nzpropertytogo.comit also has it’s own forum. Very small and again mainly word of mouth or for people who want to ask us questions about the CD. At the time we started getting it together there wasn’t even a Kiwi section to this forum, and I am glad there is one now. Now I wonder what smart person it was who suggested that idea. hee hee!!
Anyway, ‘We’ as on the CD, is westan, wilandel, me, familyfirst and castledreamer.
The reason we decided to do an audio CD was in response to all of us getting various requests for mentoring and all of us saying we’d love to do it, but nobody has time. Of course one to one is the least time effective way too. so we decided to all 5 of us get together for 3 days in Sydney and record what turned out to be a double CD.
It cost a fortune to do it ! and get the website up and all the graphic design and editing, merchant facility, argh, you wouldn’t believe how much goes into it when it looks so simple. and we may never recoup, however we knew that when we did it and though it would be fun to do it anyway, sort of a way of giving back – especially for all the people that wanted to have coffee with us or meet with us for mentoring and who we couldn’t give that sort of time to.
Basically it’s a way for people to get 2.5 hours with all three of us for an affordable price.!
In fact I think it’s the only time all of us have ever been in the same place at the same time! Took quite a bit of organising even just that bit!I made sure we answered within the content over 100 questions that clients over the last 180 deals have asked us to do with investing in NZ.
Everything we do when we buy and find deals in nz. Sorry to go on about it but I haven’t really had the chance to rave about it to that many people about it apart from our client list.So as for the spotting. NZ bird dogs doesn’t have a website. (yet, it may one day, though I do like it the way it is…more personal somehow.) it is just a mailing list that has grown through word of mouth, if you want to join the list drop me an email at
birddogs at vocalbureau dot com
(have to write it that way because otherwise the web spiders’ll get me and I’ll get 1000 spam emails in 5 minutes!)
cheers-
Minijust to answer a few quotes here
“It is incredible that properties can be gone 30 seconds after they go out on a client list.”
Tell me about it! (whether or not you were talking about our list!)
“I don’t want to pay a birddog fee for a property that 2 days later turns into a lemon -“
Nobody does, and if you say ‘lemon’ well it could be a lemon because it doesn’t value up. This has only happened to us twice in 180 deals (both in the last month as the market rises and valuers are quoting equivalent sales in their valuations as old as 8 months.)
In one case we dropped the deal, and gave the client another deal instead in lieu which did value up (actually valued up 10 percent more).
The deal did go on to sell to an investor for MORE than the contract price we had on it.In the other case we go to bat with the valuer. Basically because we do so many deals in these areas we have a very broad knowledge of sales in the area. So do they, but they do tend to pick and choose their opinion of ‘comparable sales’. In many cases we are able to say to the valuer ‘why did you include that sale (let’s say they included a low priced sale to back up their low valuation) because it’s 8 months old, not in as good condition, not rented for as much, and at the other end of town. and why didn’t you include this sale (higher priced properties that perhaps we had tried to get and missed out on as they sold for more.)
It’s amazing how the valuers will admit that you are right when they realise you have quite a bit of market knowledge too.
If all else fails, we wave the valuation in the vendor’s face and say ‘we will go unconditional if you reduce the price by XYZ to reflect the low valuation’.
So the end result is that we can say that only 2 deals out of 180 were under value. The ones that value up higher than what we contract them for are by far the norm.
As far as builder’s, us bird dogging a deal that turns out to be a ‘lemon’, well there’s lemons and there’s lemons.
We are great at identifying visual defects and include 50 photos of the property including close-ups of defects. Like rusted gutterings, peeling paper, etc. We are not qualified to check for borer and piles (stumps.)
It is unfortunate that somewhere between ‘sometimes’ and ‘often’ we uncover more serious defects. We have a procedure for this which is outlined in our information sheet.In theory we don’t refund our bird dog fee, but in practice…we definitely look after our clients and nothing has happened to a client that wouldn’t happen to us if we buy and investigate properties, or that wouldn’t be as likely or more likely to happen to a client just going it alone.
But what I will say is that we do our very best to find great deals.
I have bought properties that needed a new roof within 2 years (but was not leaking at the time) – with 5 percent borer, and with wonky piles.
Some I have fixed and some I haven’t bothered with, thinking ‘I’ll fix the roof if and when it starts leaking’.What I’ve found with mine has been that capital gains happened in the same proportion whether I fixed problems or not.
That is, provided the house is weather tight and can be tenanted and looks cozy and clean, it will be a good rental investment, whether or not the floor slopes slightly or if it’s a bit springy in places. That’s what I’ve found anyway.Anyway, some of the worst properties ‘lemon-wise’ have been those we bird dogged for 20-something thousand, or say the late 30 thousands.
Sometimes it’s worth still proceeding, and sometimes it’s not.
Then again it’s also how you manage the investment after purchase.But if all our deals were just terrible then I daresay we wouldn’t be in business.
We definitely don’t expect our properties to be perfect certainly not at the bottom of the market. Often we buy them deliberately. I.e. 40k rented for 80k but with 15k makeover to turn it into a cute beach cottage, you could sell it for in the 90’s. That’s the sort of deal that it’s great if you decide to do that but if not you can bide your time and do it any time in the future.
“I trust my due diligence not others.”
Interesting point, however…I trust a building inspector more than I trust myself, and they are ‘others’. So my due diligence is basically consulting experts. We consider that we have excellent investing local market knowledge in the areas we bird dog so that’s where the value is. I don’t think that people can get that just by going over for a week or two.“Birddogs bring you potential deals, but thats only the start of it.”
Absolutely!!!! We basically help the clients out with their deal for a period of at least 6 weeks. Sometimes we even project manage renovations, help them appoint rental managers, continue to consult after purchase, basically it’s a personal and ongoing relationship with our clients.“Every deal brought forward by a birddog is not necessarily a good deal.”
I believe every deal we bring to clients IS a good deal. Otherwise we wouldn’t sign it up. There are various reasons why each deal is a good deal, and we explain that with the deal brief. Every property is different of course.“You still have to do your due diligence…”
Absolutely. There are bird dogs who provide builder’s and valuations in the price but they are $5k and we are $2.5k.
So basically we work out cheaper because the client usually only needs to fork out for a builder’s report (usually $150-$400 depending on the property and the town).Valuations – a lot of lenders don’t need them if the property is listed with an agent and over 60k. So it is a win/win as far as my logic sees it that we leave it up to the client if they need it or not and they only pay for it if they do need it.
OK in regards to “I offered as much as $10000 under asking price with most around $5000 to $8000 less.”
Yes of COURSE we try to do that. In fact recently I offered on a development site in a major NZ town, $330k, on a $345k asking price. I would have low-balled more, as it had fallen over already, however I wanted the deal because I could see about hmmmm $660k profit (CONSERVATIVELY!!!)
I didn’t get the deal and someone offered asking price and got the deal.
So now I regret not offering asking price and by trying to ‘save’ 15k, I lost $660k.So there is always a balance. I don’t think that the person who offered more than me was a ‘cashed up idiot’ – I think they were smarter than me by realising the scarcity of this particular deal and realising (as I did) that it was really worth 600-700k and that the distressed vendor was ‘giving it away’ to get out of debt. It was a seriously negatively geared deal, so that’s a whole other negotiating ballpark than the cashflow properties of course and not the usual sort we find for clients, but the principal is worth discussing – to illustrate that the person who offers more is not necessarily the idiot, but might be the smartest person!
Luckily for me, I have been able to find an even better similar sort of deal in an even better area north of Auckland through the help of my spies, so, yay.
In regards to “what you really really dont want is a deal that the local agents have left for the aussies or the bird dogs.”
Oh, well, one is not necessarily the other. So to explain, sometimes we get offered properties by other ‘bird dogs’ to ‘bird dog’. (!) Example, an Aussie first time in NZ, buys one for themselves, and a few for friends. Uses up the dd phase, can’t get a buyer, friends flake out or get cold feet, and are 24-48 hours off falling over on 4 deals, and in a flap, contact us to ask if we could bird dog the deals. So …we look at them all. find that we have 5 ‘agent photos’ per deal, not 50 photos like we provide and which our clients are used to. we find that they contract price is too high. we find houses that are in bad streets, but they don’t know that because of no local knowledge. we find their ‘rental assessment’ is from the selling agent not an independent agent, and is unrealistic. we find that they signed up a deal we already looked at weeks ago prior to it going on the net, and rejected it because of XYZ, etc, etc, etc.
So yes there are loads of ‘bird dogs’ who don’t have the market knowledge to get it right, let alone having the right clauses in the deals so the ‘bird dogging’ is disclosed, and they are not us.
“A particular deal may be refered to as “not yet on the market” and miraculously signed up by a bird dog who lives in another country. “
I am a bird dog and I do live in another country but of course I am just the ‘hub’ of an ever growing network of investors who are very much on the ground and very much in the agent’s faces, every week without fail, if not twice a week, they on the spot, they are investors themselves, they are doing deal after deal, they have relationships, and THAT is how come ‘I’ can find a deal in NZ that is not yet on the net.
.
“It does not make sense that the agent would not put a property to the open market if it is a valid deal.”We are the open market. If we want the deal, we put an offer in. If the vendor wants to take the chance that they might get 5k more (let’s say we are offering on a 69k house and we go in at 63k) then they turn it down and off it goes to the rest of the ‘investor list’ (which we are at the top of) and beyond that, the internet and the great unwashed. So why would they give it to us first?….Oh boy! Remember we really get to know the agents in the towns and we KNOW how stuffed around they get by purchasers.
OK here’s an anecdote from me. Had a house on the market. Got an offer on it. From an Aussie investor who was on an ‘investing seminar’ run by Aussies. Offer made subject to finance within 4 weeks. I thought that was a bit long and wanted a cash out clause, but the agent said ‘don’t be mean’, they are over from Aus and travelling, and the purchaser was even an accountant apparently. Anyway, the deal fell over because the purchaser couldn’t get finance, but no surprise, because they were trying to get finance to purchase in NZ from Aus. I mean, duh. All due respect to the Aus brokers that say that finance can be arranged from Aus to purchase in NZ, but Lines of credits on Aussie properties aside, I have yet to sell a deal to a client who is getting Aus finance on a NZ security. NZ finance for a NZ purchase is So the way to go.!
So compare that with a bird dog offer, made by one of us, AKA, someone the agent has done mucho business with, and on a regular basis, and has a good working relationship with. An offer not subject to finance (the most common reason deals fall over) and a deal where the agent knows we will help the assignee through everything. You may not know that from our end, we only let clients take deals that are pre-approved.
This is basically how we manage it in the timeframe. Often tight. The pay off for our price and other terms is sometimes a shorter DD period. However with our help this is very doable in a way that it might not be for a first time visitor to NZ. So our deal is so much more likely to go through, and the agent knows that, so it’s less work for them, it’s a pleasure. No wonder that the agent basically goes to bat for our deal, even if the price is lower and the conditions are higher. This is basically how we can get our great deals.“So if the property goes straight to the bird dog be carefull you are not paying to much or getting “the fish john west reject”
Not at all, our reputation is on the line and we can’t do that. You wouldn’t believe how many deals I reject compared to the ones that make it through.
You wouldn’t believe how hard and tough we are on the bird dogs at first, on our client’s behalf of course!
.
“So the moral – USE THE BIRD DOGS – as it makes good sense to leverage off their time and experience but be very carefull of deals that just seem to pop up or have garage conversions and sleep outs included in the rental assesments. (Scary stuff)”Oh, this sounds spookily like one we sent out a while ago.
Okay, so it was a 2 bedroom unit on a concrete slab. Rotorua. Garage AND a carport which the owner, an old lady, was using as a kind of outdoor ‘dayroom’ verandah type thing. it had internal access to the house. Enclosed on 3 sides. By adding a ranchslider and floor coverings, you basically could create a 3rd bedroom.! This was all done for about 5k all up I believe and project managed by our local spotter who even went to buy curtains etc for the client not to mention endles running around. We ran all this past the valuer, while still in the client’s due diligence phase, and not only did the property value up as is several k more than the contract price, as is, BUT, the valuer gave a valuation projected on it creating the third bedroom which proved it was very much a viable proposition. It was basically a way a client could not only create 3 times the value of the cost of adding the bedroom, but also increase the rent – 3 bedrooms rent for more than 2 bedrooms rent for, obviously.So it wasn’t ‘scary stuff’ at all, in fact the valuer validated and vindicated everything we had said. It’s all perception I guess. One person’s ‘scary stuff’ is another person’s ‘problem plus solution equals profit’. I felt it was a clever way to make a good deal even better. Yes, of course, that was also reflected in the rental assessment. We asked the rental manager to assess it as is (2 bedroom) and as a 3 bedroom if the ranchslider and floor coverings were added. I guess the only down side was that during the time it took to get the tradespeople to do the work, it was vacant and therefore negatively geared, but I think for the client, the value added more than amply compensated for this in the big picture.
This is the classic sort of thing we do, basically, and there is a lot of ‘work’ involved which clients perhaps don’t realise until they start to do everything for themselves and don’t use bird dogs any more.
but then you could argue that if the house is nicer it has less risk. I.e. risk due to downturn, risk of bad tenants is less the nicer the house, risk of rental manager getting the shiznits with you less, risk of maintenance and redecoration less, risk of grief less…
a lot of people now sacrifice a little less yield for a little less grief.
grief = problems, and of course as Our Leader says, problem plus solution equals profit.
glad to help,
Yeah well it must be those years of piano lessons, but I am a fast typer!
cheers-
miniMid-priced properties – well say for 300k you could get a gas station commercial property in Rotorua (66,000) for a ten percent yield, tenant pays outgoings. Or for that amount you could get a block of units say anywhere from 200k for a duplex to 1M for a larger block. That would be CF+ve.
Smaller towns, bigger deals tend to have better yields too, maybe 1 percent or so higher than what a house would be.
Then again if you are talking about just ‘nicer properties’ then the yield tends to go down.
Let’s say in a town where 75k would rent for $150 a week, if you got a house renting for $190 a week, it might be $120k
that sort of thing
– yield gets worse as you get more upmarket.cheers-
Mini
