Forum Replies Created
thanks!!!!
!!!!!!!!
house 1
1) When you purchased your investment?
may
2) How much you paid for it?
27,300
3) What structure is the investment
buy and hold
4) What is the weekly gross rent
110
5) What your net Cash Flow is
115 per week minus $11 per week management and
$1300 per annum rates and insurance.house 2
1) When you purchased your investment?
june
2) How much you paid for it?
16,000 plus 10k renovation
3) What structure is the investment
buy and hold
4) What is the weekly gross rent
95
5) What your net Cash Flow is
115 per week minus $9 per week management and
$1300 per annum rates and insurance.house 3
1) When you purchased your investment?
july
2) How much you paid for it?
19,000 plus 10K renovation
3) What structure is the investment
buy and hold
4) What is the weekly gross rent
115
5) What your net Cash Flow is
115 per week minus $11 per week management and
$1300 per annum rates and insurance.totals:
82,300 investment
12740 in my account every year AFTER costs
net cashflow yield – about 15 percent.cheers-
MiniThis site has the stuff about overseas investors coming in to NZ. click on the ‘investing in NZ link’ for a bunch of links or go straight to the summary –
http://www.oic.govt.nz/invest/policies.htm
cheers-
MiniMogulcongrats still, sounds great, is that in Aus or elsewhere?
you can get data for free from the RE agent. get them to print you out a couple of sheets of info in your price-range for say the last few months.
there are lots of things you can do with the data, i.e. work out the ratio of GV to purchase price in your area from the data“I’m just thinking it might just be better to refinance your loans at the peak rather than sell.
“ian I think you nailed it, what Steve was getting at – would make sense to get your LOCs or whatever now against current values ready to buy in a couple of months or so
I think that ‘entry-level’ properties are the most sought after, because everyone in the market for a house can afford them. also the cheaper properties in single homes are in my experience more likely to be CF+ve than the more expensive homes. i have seen some good yields for small blocks of units, or even home and income type properties.
keep watching the market. all the talk of a bust is causing major panic, interest rates will rise, and there will be more people wanting to dump their investment properties – which you can pick up for a song, as the market will be flooded with sellers, and hardly any buyers.
keep watching the area where you are doing your looking, and see if you can spot this happening, for example more houses on the market in your price-range. also keep a track of what rents are doing. in the area where I bought for 20K 6 months ago rents used to range from 90 – 120 for a 3 bedroom home, and now it’s 110- 140 per week. quite a big jump.
as rents go up (linked to interest rates rising) combined with too many houses for sale causing prices to soften, you will find your deals. when everyone is sick of property, yelling in a disgruntled manner about how Steve’s method doesn’t work, when they’re all disillusioned and burned and everybody wanders off to do options trading or whatever, that’s the exact time when you’ll get your deals a plenty, and at the price you want. and off we go again around the cycle.
cheers-
Minideja vu? yes, certainly, it has happened to me before – actually – I put a thread up about it months ago called ‘bogus offers???’ which is probably in the treasure chest. and guess what, it was the same agent as you are dealing with, even.
basically parts of NZ are getting as hot as Australia was a while back, so people are trying it on.
i think it’s a good idea to consult the lawyer if gazumpy clauses are flung on you. i mean, good idea to reject it as you did, but a lawyer might have been able to advise other options – did you ask them about it?
My lawyer was in the loop at all times when i first bought, and i would advise the same, especially if it’s your first time buying in a new territory or even from overseas.
cheers-
mini‘no genius without a touch of madness’
– Goethei want to congratulate Steve for coming back and being around the forum again. timely and most appreciated.
cheers-
Minimogulfor anybody who has felt that a power-tripper has ruined their life – hey, you gave someone that power? remember, nobody can make you feel inferior without your consent.
how can a power-tripper destroy everything unless you actually let them? how did they even become a power-tripper in the first place?
if you sit back passive, and didn’t do all you could – that is the same as ‘letting them’.
cheers-
mini!
*grin*
http://www.richmastery.com.au/AU/
these guys have property deals. i think you have to join up to view them, and – as discussed elsewhere the consensus is divided as to whether they are good or not – but use it for your own research. look at the kinds of properties they are finding, where they are, the price-range, the cashflow.
that should point you to in the right direction and give you a benchmark to find good deals of your own that are as good or better as theirs – and without the finder’s fee.cheers-
miniyou can’t be gazumped if you have a signed and counter-signed offer.
you put in your offer, the agent should type it up, fax it to you via your solicitor or ‘subject to approval by my solicitor as to all terms and conditions of this contract’ if you are in a rush and don’t have time to contact your lawyer or it’s the weekend or something – touch base with the solicitor first to get the exact wording though. the rE agent will need to know who you are using.
So then you should put a time-limit on your offer in a hot market, or to put pressure on the agent or the vendor to make a decision and so you don’t get gazumped. But if the vendor countersigns, you have a deal – impossible to be gazumped, you can still pull out though if you put in the ‘subject to’ conditions.
i think in NZ we are seeing a boiling hot market like in Aus (OK a kind of cuter smaller version) where properties are being sold ‘off the bus’ before they even make the internet or the shopfront. This is in contrast to when i was looking earlier this year when some houses had been on the market for years.
The people that were saying ‘you’re crazy to buy there’ are now telling me that they read an article that where i bought is the ‘new hot place’ to invest. kinda like tasmania. by the time you’ve read a 6 page spread on the hot tasmania market in the age, it’s too late! hehe
cheers-
Minicomsol nailed it when he talked about successful businesses needing good ‘systems’. A system is a form of leverage.
“owning your own business is a bigger jail than being an employee.”
Robert Kiyosaki says that many people who think they own a business (self-employed) don’t – they own a job. I can relate to that – I have a business, but I get clients because of my skill. I can’t really attract customers and fob them off on someone else, because I work one to one and they want me.
Now Boost Juice, for example, now there’s a business. the inventors of the concept don’t squeeze juices, they set up a replicable system which they franchised, so that other people squeeze juices, and they get paid while whistling a happy tune.
and re: “good deals are hard to find”
I’ve debated this point about a thousand times.
I found about a zillion good deals just last week. And no, they’re not near my house in Paddington, Sydney.
they varied in price range and opportunity, or strategy needed to unlock the $$$ – but for example – buy and holds: 36K rented $120. 20K rents for $100. development: $100K demolition dump, 300m from ocean, beach resort, 800squ m freehold, two street fronts, remove house, subdivide, relocate or build two baches, sell both properties for (agent’s estimate) $170K each.bit of both, CF+ neutral plus capital gain -70K rents for $140 but in booming capital gain city.
Absolute beachfront for $130 k in beach suburb of aforementioned booming capital gain city. etc etc etc etc etc etc
zillions of emah, i forgot the riverfront do-up for 50K, or else buy and hold at CFneutral (rents 120 per week) and do up later
If you look for deals on the net and isolate a price-range where the yields are looking good, follow it up by a few days visiting, looking, networking, and scouting in person, walk streets, talk to tenants, other investors, go to hardware stores, anything! – take real estate agents out to lunch, dinner, talk talk talk, they will throw deals at you forever more. truly!!
cheers-
miniyeah, I love the book, so glad you are ‘enlightened’! (those that haven’t read the book, this is not a smug pseudo spiritual pat on the back, it’s to do with the name the authors of the book give to millionaires who are committed to giving away 10 percent to the community, and book aims to help create 1 million of ’em! they think that will change the economic future of the whole world. because of the 6 jobs the average millionaire will create, the mindset to do the same which they will pass on, the benefit to the community, etc etc etc )
one of the bits that stuck to me is you might have to be rejected three times before you get a ‘yes’ – and the rubber band thing is brilliant too!!
cheers-
miniI think a lot of people finding deals for ESC are people who have done their seminars. At least in NZ I know this to be true. A lot of people don’t have the $$$ to get started and finding deals for a commission is a good way to get started. I was recently in NZ looking at properties and we looked at a waterfront property in a city which could either be a pretty rough buy and hold, or a renovation for capital gain – it was returning about 12-15 percent but capital gain has been strong in that area, actually ‘going nuts’.
While we were looking, another person came to look at the property and my friend got talking to him – he was looking for properties for ESC.he’d certainly identified a good deal, as we had.
Phil Jones talks about the propertyfinding service at his one night events which i’ve been to, which started as asking seminar graduates to notify him of deals they found but didn’t want and if they bought them, they’d get a finder’s fee. some people asked him ‘hey pass on the deals you don’t want to us, because we don’t have time to look either!’ so they did. Phil said often he checks the website to see what deals are available at a particular time, to the public, and sometimes he sees an incredible deal that’s been on the net for 9 days, and says to his partner ‘hey this seems a good deal, why aren’t we buying this?’ and grabs it himself. He showed one property as an example. they are really strict with the guidelines – they offer two types of properties – colour coded purple or green depending which (cashflow or capital gain)- and the capital gain ones have to be in areas which have shown more than 10 percent growth P/A. for 10 years, five years, and one year. He says that some people have ‘spotted’ 90 properties before one has been accepted for the web!
I actually use the site as a barometer of how I’m doing, because all my deals have to be better than what they’ve got on offer, otherwise I’d be better off to buy on of theirs!
Once i was looking in NZ and found a property in a town close to another which was going nuts, for 33K. Then i got the email from ESC which offered an identical looking property for 29K or so.
So i tested it out – rang up the agent and asked if the 33K property was still available. no, it’s under contract, she said.So, i think it’s legit. they just negotiated it and put a contract on it. Also obviously looked through it in person.
if you’d bought that property for 29K, not only would it have been CF+ve for at least 12-15 percent, but the value would probably have gone up …??? 41K which is the lowest priced property on the market in that town right now – i just checked – and like i said that town is 20-30k away from a city which is one of the fastest growing in the country if not the fastest.So it depends on your time. If you have the time to look for your own deals, do so, if not, buy one through ESC and leverage your time that way.
however, they don’t do builder’s report for you
or anything so you’d have to do that yourself. Also you often don’t have much time to get the deals.Yes, i do know someone who bought a property through them and he was very happy with it. All the stuff I’m writing here is to do with ESC in NZ. i don’t know if ECS in Aus is just franchised out or what, I.e. I don’t know if it’s run to the same standard as the NZ branch which of course is overseen by Phil and david themselves, and they obviously know the market there really well.
the only other thing i wanted to add was that there’s nothing intrinsically wrong with finding properties for others and charging a fee. i’m thinking of doing it myself actually, as I find many more deals than i can purchase myself!
However if I was a person wanting to use a propertyfinder service, i think it’s quite reassuring to buy from a reputable company.
I certainly wouldn’t go around calling them scammers.
cheers-
MiniHi there,
>everyone recognises we are in the early stages >of a correction in R/E.
I think you might be right Bill, and it’s not that I disagree that people can make huge amounts of capital gain from their negatively geared PPORs over time and in a booming market, if they buy right, etc etc etc – but it’s just not a given right now. And if you are buying for CG even in today’s climate it’s not necessarily going to be the same choice that you’d make to live in.
I just think negatively gearing a property right now is risky and personally i wouldn’t do it.As far as security for a nice place to live goes, you can always signe a long lease if that means something to you. but personally I’m planning to be moving up in the world as to where I live in the next year, so I don’t want to be beholden to buying a PPOR. I also might move overseas. Sure, i could hang on to a house i bought to live in and rent it out, but IMHO PPOR type houses don’t make the best rentals, especially if you have an emotional attachment to it.
In fact i think shopping for a PPOR and shopping for an IP couldn’t be more different.
>I disagree with those that hold the view to rent >and own an IP instead.
I think if you did the numbers on the house that i live in and my three IPs I got instead for the price of a deposit, even you’d agree. I would be worse off to the tune of 50K PER YEAR! That’s a lot of CG catching up to do to break even.! Just impossible for me to afford to live here as a purchaser, but possible to afford to live here as a renter – thanks to the pathetic yields Sydney investors are used to.
I wasn’t saying that everyone should do as i do, but just that everyone should do the numbers on a potential house they might like to buy as a PPOR or putting the money into an IP. I think it is possible to get the FHOG on your first property as long as you live there in the first year. When if you took a holiday for a couple of weeks and went and painted it before renting it out, i don’t see the problem as the law doesn’t define how long you have to live there for.
>If you buy right you will have far better CG >than you would with 3 cheapies
>that are cf+.well Bill, what would you suggest would be ‘buying right’ in the current market that wasn’t CF+ve? and why? And what say the people looking for a PPOR don’t want to live there?
>My experience is that if you have excellent >yield you have little CG.
yeah, that’s true, but you need the CF+ve properties to increase your serviceability so you can borrow and get more properties. With only neg geared properties in your portfolio, everything sort of grinds to a halt fairly quickly, and it keeps you in your job, paying into it with after-tax dollars. it’s just against the whole thing i am into which is to enable me to work less, not more.
>Also if you are buying Cheapie IP’s they may not >necessarily remain positive cf
I can bet you without a shadow of a doubt that mine will. Hell, i only need 25 percent occupancy to make that happen, and because I have three (all rented) my risk is spread over three.
>and worse, as a cheapie more likely to fall >heavily in a market sell off.
I disagree. There are more buyers who can afford the bottom of the market than any other slice! And yield is yield – it’s a no-brainer that i could always sell a renovated, well-maintained property tenanted and yielding 20-22 percent to an investor any time, especially of entry-level prices under 50K.
And it’s not true about capital gain either – with tasmania, you had declining prices and population for 12 years before people thought, bugger it, I don’t care about CG, i just want one of these cheap houses that seem such good value as a holiday home. So tasmania became hot what seemed overnight, and population is rising like mad, investors are well and truly in.
One of the towns in NZ where I have been buying (much to the chuckles of my friends and family) had a spread about it in the wellington evening post as the new hot place to invest going nuts.
So…that was a nice surprise. i think it’s the Tasmania syndrome. People are looking all over NZ and they find these places with identical houses and rents to other towns, but for half the price. hence the yields being 20 percent not 10 percent.
>An example is the 25% market fall in Canberra >late ’94… Even quality homes fell 25%..but >cheapies lost 50% in value within 12 months. 2Br <units (Hawker) $112k down to $55-60k
>Ex-govt homes in Higgins $130k down to $60-70kI personally think that i have bought my properties at the bottom of such a fall. I’m actually not looking at what the value is doing month by month, as I am looking for cashflow. the cashflow over the years should go up, so theoretically, the yield gets better and better over time. it’s really not the value of the house, as such, the value to me is what someone will pay me to live there. and I can’t really see that changing. even if vacancies occur in the towns i’ve bought in, I should think my properties will have the edge because they are so nicely fixed up.
>Cheapie IP’s tend to attract the wrong sort of >tenant.
It’s true that you want a good rental manager to keep a watchful eye on the property. However my tenants have planted 18 trees, fenced the property and put a gate on it and pay rent every week, so as far as i am concerned they are quality tenants. I agree that most of the cheap properties are sh&^tboxes, and if you buy them and put them up for rent and they’re bad, nobody will want them excpet for tenants that nobody else will have. So to a certain extent i think that if you have more money, buy an already good property. but i didn’t have that much and the way I chose to do it was fix up ad redecorate structurally sound dumps.>Of course you have a choice… but people rent >cheapies because they have to, not because they >want to.
yep – but they rent my ones because they want to as well as they are cheap, because they have emotional appeal (created with my very own hands!!)
I keep meaning to post pictures somewhere. because as we know a picture paints a thousand words!!
cheers-
Miniyeah right on kay.
yeh i live in sydney too, paddington. where are you?
we should have a coffee some time.anyway, yeah, basically, what kay and i are doing means that our IPs will buy us our house further down the track, whereas if we’d bought our PPOR now it would be out of earned income, in tax-paid dollars – the most expensive kind.
thanks simon!
