Forum Replies Created
Marc
Definitely want everything done above board and I don’t want to hurt anyone as a result of the transaction. Just looking for a creative solution, as I can’t afford to pay a lump sum up front and I’m not sure if the bank would lend me more money. Also, it could set me apart from other interested buyers. Note that I’m confident that I could make the extra payments.
It is a deceased estate and the son (the buyer) who recently inherited the property is a pensioner who lives in government housing. I suggested that he act as the bank so that I can offset my payments and he can get a bit of income to supplement his pension. In the meantime he could continue to live in subsided housing but recieving 2-3 times the income.
He owes $30,000 and must sell. I know that he can keep his pension by selling and buying a more modest home, but I was suggesting that he considers delaying this and in the meantime earn some interest payments to supplement his pension.
I know CentreLink’s income and asset test limits but not sure if they’d treat this as an asset once I become the owner and started payments. I don’t want to affect his pension. I’m after a win win.
Maybe its not a goer. Do I need to see my lawyer to confirm one way or another? I’m not real sure and I don’t want to lead this guy astray.
Cheers
NeilJust to fill evryone in.
I spoke to my accountant and he didn’t like any of the 3 options. The third could work out OK financially but could cause unnecessary concern for an 82 year old mum.
His suggestion was along the lines of one from my 84 year old father-in-law. That is, renovate the house to make it more lively and modern, hire new furniture and sell privately. The house is very tired and needs some paint etc. The carpet is 35 years old and there’s oak floor boards underneath that could come up a treat with some ‘spit and polish’. Also, one of my brothers in Melbourne is a retired teacher come builder and another a professional handyman/ Mr Fixit, so they can help with this solution in a big way. This sounded like a good solution and it would be a fun bonding session with my brothers who I don’t see often (I live in Canberra).
If done well, the renovation can add significantly to the value of the property. It is in a good street and has a good location, so we certainly wouldn’t be over capitalising. Selling privately would save RE commission. My teacher/ builder brother has done this successfully before and I have plenty of literature on it.
We now need to have a face to face chat with mum to see what she really wants, bearing in mind she has some good neighbours where she lives and they are familiar surroundings for 35 years. We may have to consider making her home more comfortable where she lives and look at options for making her life easier, especially through assistance from Vets Affairs. Mum’s a war widow but very proud of her independence and doesn’t easily give in to outside help (unlike my 84 year old father-in-law, who works the system like a charm).
As I write, my teacher come builder brother is replacing her shower with a fibreglass one to make cleaning it easier. We’ll see what happens!
Thanks for your help guys.[biggrin]
Cheers
NeilThanks guys
I will investigate three options (neither of them are my original one):
1. I purchase mum’s house at a fair market price and rent it out and she purchases a new villa, thus avoiding real estate commission and some legal fees.
2. Mum borrows money on the equity in her house and I find someone to lease purchase the house from her, with her nett income from this not affecting her pension. I purchase a new villa for mum to live in and mum pays a nominal rent to me. This gives mum some spending money and me a property with increased equity in the future. A win for mum but not me!
3. Mum sells her house to a third party using vendor financing (as for 2). I purchase the new villa and mum pays me a rent that’s similar (but less) than the payments she recieves from the house. A win! win!I’ve got some research, sums and talking to do (I have 3 brothers that need consulting too). I don’t want to get mum’s hopes up so I want to be sure before putting an idea to her.
Cheers
NeilPS This could be of wider interest to others on the Forum
Some details…
My mum owns outright a 3 bedroom house in Boronia West (about 2km from the Boronia and Bayswater train stations and 1km from Knox City). She is 82, has no transport and the house she lives in is old and bigger than she needs. Thus, I was wanting to propose that she moves to a smaller more modern house closer to public transport and shops – either closer to Knox City or closer to Boronia Central.
I haven’t researched the prices in the areas, but a quick look at the web suggests $250-300,000 for a 3 bedroom house in Boronia West. The cost of a new 2 bedroom villa close to Boronia Central would be similar, but the buy/sell costs are huge for a pensioner. This is the main reason she doesn’t want to move.
Thus, I was looking for something that maybe could help me in the long-term but help mum in the short-term. Hence, my suggestion is for me to buy a villa in Boronia Central for my mum to live in and for my mum to rent out her Boronia West property. How to strike a fair solution that does not affect her pension nor her ownership rights over the Boronia West property?
Cheers
NeilRedwing
I hope its a win win situation, but the primary purpose is to help my mum.
In terms of the $1 rent OK I take your advice, I didn’t realise the implications.
In terms of similar rent for her existing property I meant market value. Still have to research it, but I suspect about $250-300/wk for a 3 bedroom house in Boronia West, Melbourne.
Cheers
NeilI recently signed up to do an RG Allen/Mark Victor Hansen real estate course through US, not knowing that he was in town. I didn’t attend the seminars.
I’ve actually had 4 weeks of training and found it OK. I found Steve’s book afterwards and wish I had found it earlier. Steve’s approach is more straight forward, his book is very easy to read and understand and most importantly applicable to the Oz situation. However, I’m locked in to 12 months of RG Allen (via a $8,500 commitment).
I was impressed by Mark Victor Hansen. He seemed to be a man of integrity. In a similar way, in reading the acknowledgements in Steve’s book I was impressed with Steve and wanted to read his book. The web site I visited on RG Allen indicated that his organisation had a giving attitude, which impressed me, so I signed up. Maybe this was a mistake but I’m committed to make a go of it now and will try to learn as much about real estate as I can, together with my wife.
I noted that Steve has a very prominent accolade from RG Allen on the back of his book and reference to Allens techniques in his book. Maybe Allen gave Steve the original motivation back in 1999 when he got started in real estate investing??? Steve’s techniques are much the same as Allen but some slightly different terminology. Perhaps Steve could elaborate.
My financial advisor from Navra emailed a copy of the article by Neil Jenman to me yesterday and told me to steer clear of RG Allen, not knowing that I had already signed up. I trust Navra’s advice immensely, as they’ve done heaps for me (particularly Steve).
I emailed Neil Jenman saying that I recently signed up to do an RG Allen course and was concerned about what he said in the interview with Neil. Shortly after I got a phone call from Denise Brailey (President of the Real Estate Institute) trying to convince me for 30-40 minutes to take actions against RG Allen to get my money back. She also said not invest in real estate as the Australian market is likely to go bust, quoting IMF commentary of a similar 50% fall like Japan, which puzzled me. Ms Brailey says that she was interviewed by Michelle Tapper on the Today Tonight show – I couldn’t see any reference to RG Allen on the TT website though.
On reflection, I tend to agree with Alan and Marc’s comments on this forum, but I’m open to listen to what others have to say about RG Allen, particularly regarding his integrity.
Is this a tall poppy syndrome? What’s the truth? I’d appreciate Steve’s views on this.
Whatever you want more of give some away.
Cheers Neil
You’ll probably find it in the sticks; Steve found them in Ballarat. Alternatively, look for duplexes, dual occupancies or multi-occupancy sites.
Good luck. I’m still looking too and tentatively thinking about NSW rural towns.
Maybe its best to stick to capital gain using buy and hold techniques. I’ve doubled my money in the past 2.5 years that way, but it will be harder now with the market flattening.
You need to look at some creative financing (being the bank) or look at possible reno and multi-unit site (eg., home + attached flat).
Neil
CanberraWhat’s a VFA meeting? I suspect its something to do with Vendor financing??
Who can attend and when and where are they held?
Cheers
NeilThanks guys – I agree we meet with the existing group.
Cheers
NeilSteve
Sound like you want to start a group. For this group to be successful we need someone with a reasonable amount of experience in the private investor real estate business. That’s not me. Do we have anyone that fits this category that’s interested in getting together a group in Canberra?
In terms of location, it could be at someones house or at a coffee shop or restaurant if numbers are small.
In terms of date and time, I await a response in terms of interest from somone ‘experienced’ in the business we’re in.
Cheers
NeilStevie24
Try http://www.instantsellhome.com and it should take you to the home page. I came across it yesterday and downloaded some material on selling privately.
Cheers
NeilHave a look at http://www.instantsellhome.com/freepage/
