Forum Replies Created
- Originally posted by The Mortgage Adviser:
I loved ‘The Young Ones’. I was shattered when it went off the TV. Vyv, you might have some trouble with security types. They are not considered favourable when they are so big and so far from Metropolitan or Regional centres. More deposit will be needed and/or possibly higher interest rates. Robert Bou-HamdanI too loved “The Young Ones” but never checked out the spelling of character names. Our daughter’s name is Diipti (Sanskrit, the language of Yoga = Brilliance of the Supreme One). When Diipti was a kid she was SO RAPT when she saw how Danii Minogue’s name was spelt she said: “At last, someone who has at least TWO i’s in their name. Doesn’t ANYONE have 3 iii’s like me?” [biggrin]
I’m with Robert the Bruce (sorry, Robert the Broker!) re problems with the bank’s LVR (Loan Value Ratio) and DSR (Debt Servicing ratio) in rural areas. Your bank will apply punishing mathematical algorithms to calculate how much risk they’re prepared to accept in the sort of rural deals you’re interested in.
The good news is that there’s a much better way. Read the chapter on how to track Median Price Rises in particular postcodes to determine the PRECISE POINT you need to buy into a region (it’s in Peter Spann’s book “$10 Million Property Portfolio in 10 Years” at your local Bookworld or Dymock’s). I have commented elsewhere on this forum about his awesome application of Median Price statistical data. Do a search on my latest posts (click on my Yosemite Sam logo) to bring up my posts over the past 1-2 months and you’ll find Spann’s “212” method detailed thoroughly.
Basically, given that the area’s prices have DOUBLED recently, you needn’t panic. You’ve got PLENTY of time to plan your next move. Read Spann’s book and log onto the “Aussie Valuer” website:
http://www.eaussie.com.au/aussie_valuer.htm
Put in the area’s postcode and get a FREE Residex printout of Median price rises in the area where these farms are located.
No need to rush, okay?
GregOriginally posted by DNL:I am considering a commercial venture. Approximately spending around $200K ex GST and purchase costs. What are the traps? [blink]
Hi DNL
I can’t believe no one’s answered you on this yet?
Try this:
~ Click “Forum Boards” “Search” in top LHS of this site’s home page to look for all posts on “Commercial”
~ Do a similar search on the excellent http://www.somersoft.com.au forum boardGOOD QUALITY commercial is hard to get into. Scrappy /average commercial is relatively easy to get into, so beware. The banks are wary of the risks, which is why they demand at least 70% LVR (you need 30% deposit, so I hope you’ve got lots of cash or equity) [cigar][cigar][biggrin]
I’m getting into land sub-divisions these days, which are classified as “Commercial”. They’re handled by the bank’s “Commercial” division (instead of the more familiar “Residential Property” division). This is where you’ll quickly learn all about the different algorithms they apply to commercial deals (same jargon, different mathematical constructs):
~ DSR: Debt Servicibility Ratio
~ LVR: Loan Value Ratio etc)Stick to good quality commercial deals only. I put an offer on a quality brick building in a major WA regional centre/town; the tenant was a department of the WA government, the vendor was another department of the WA government
The lease still had 8 years to run, with the very strong likelihood that they’d renew at the end. The tenant had to pay all outgoings etc.
The “vendor” department put it up for sale through an eminent local RE agency office. Frankly, I suspect the RE agent bought it himself, and/or with a mate’s/family member’s Family Trust. The agent had to make it appear legitimate. He presented 5 offers from 5 different mugs like me to the vendor. My offer?
~ 100% of asking price
~ Subject to finance
~ 60 day settlement.
I lost. The winning bidder got it by offering:
~ Cash Unconditional
~ 100% of asking price
~ 30 day settlementAs I said, I remain suspicious of what went on behind the scenes. The moral? If you latch onto a “top shelf” commercial deal, be prepared to mix it with the “big boys” and put your cheque on the table immediately (cash UNCONDITIONAL).
Cheers
GregOriginally posted by FW:Well, all I can say is that if a RE agent showed you another person’s offer, I’d seriously have to question their commitment to the privacy legislation! Keep smiling Felicity
Hi Aafreen
I’m with Felicity (above) on this one in questioning the agents commitment to privacy legislation. As I was reading the posts on your thread, my mind questioned whether you were being “played” by a street smart and/or ruthless RE agent. These guys are trained to “condition” buyers and vendors.
I was so relieved when you said: “We demanded PROOF of this other offer”, because I saw it as evidence that you were aware of the strong likelihood you were being “played”.
How did the agent actually supply this proof? Did you actually get to see the other (alleged? fabricated? real?) bidder’s contract?
Greg
Originally posted by vyvyen:….Would it be too embarrasing to offer a huge amount less????? Thanks Vyvyen
Hi Vyvyen
Love how you spell your name!! How do you pronounce it (starting with an “Eve” or a “Why”)?
My tip is to gear up mentally to optimise your success in this game:
~ Spend the money and read quality books on negotiating skills (generally, plus specific to real estate)
~ Do a few google searches on negotiating tips and skills.You’ll be amazed how much your “study time” pays off when you start applying these lessons in the real world.
Which books?
~ Peter Spann’s “$10 Million Property Portfolio in 10 Years” has an excellent chapter on how to negotiate property deals. He quotes a professional negotiator extensively, and has lots of tips.Best website?
This one’s a bit off the topic you’re asking about, but interesting nevertheless.
~ No Money Down Deals at:
http://www.buywithnocredit.comRe Google, I prefer doing Advanced Google Searches. I’d play around with different combinations of keywords such as):
“Real estate” negotiating tips negotiation
“how to negotiate”Use your imagination to invent creative keywords.
Cheers, good luck and let us know how you got on, okay?
GregOriginally posted by Brisbane 04:
I thought she was acting in my best interests and she justified it as she could forwrad the file to him directly,now I’m thinking it maybe for different reasons. MartinHi Martin
Success as a property investor revolves around building a powerful team of advisors who are +CF savvy.
Since you’re on the verge of seeking advice from an INDEPENDENT solicitor, may I suggest you ‘kill 2 birds with the proverbial 1 stone” and appoint one of the solicitors recommended on this forum or on the other highly regarded IP forum:
For my money, I sought out a “Wrap savvy” local solicitor who a good friend /local wrapper had previously “educated” re wraps. This solicitor is now a very valued member of my team.
Cheers
GregOriginally posted by Scremin:“Eventually his immense size was just too much for his heart, and Andre the Giant died in Paris, France in his hotel room on January 27, 1993.” Poor ol’ Andre the Giant has been laid to rest… His giantism got too much for his heart. Poor ol thing…[inlove][inlove]
Hi Scremin
That’s so, so sad about Andre the Giant. [confused2][confused2]
Thanks for going to the trouble to let us all know about his passing. I was wondering why I hadn’t seen him in any more movies; he’ll be sadly missed.
Do you happen to know the names of any other movies he was in?
Cheers
GregOriginally posted by Monopoly:Quote:Yes I know the program well!!![biggrin] I am humbled by your presence!!! [thumbsupanim]JoHi Jo
I’ve tried for the past 25 years to get my lovely wife Niki to be “humbled by my presence” like you are, and guess what? She just thinks I’m like most men, good for a couple of laughs!! [biggrin][cap][biggrin]
I keep dreaming of making the bigtime in her eyes.
[blush2]Cheers
GregOriginally posted by femaleage20:
I’m curious to know what I’ll gain from seminar that I haven’t already gained from Steve’s books.Hi again
To newbies, seminars are all about:
1. Getting the information
2. Meeting like-minded peopleTo experienced investors, who also love to keep learning new information, they’re more about the networking. A lot of experienced investors who don’t really need to go to a particular seminar go anyway just so they can keep building their network of “doers, not just talkers”. The amount of JV’s (Joint Ventures) that are entered into over drinks at the longer seminars is awesome.
For example, Rick Otton will charge you around $5,000 for his 3 day “Boot Camp” the 1st time you go, but only $1,000 each year thereafter.
Re free information, you should also become a regular purveyor of the forums on:
Go on, do it, and after you’ve done that, check out Rick Otton’s sites exhaustively, clicking on all his links:
http://www.webuyhouses.com.au
http://www.rickotton.com/wrapcamp.htm
http://www.financiallyfree.com.au/rent-to-own.htmAt the outset, as you decide to build your Investing Team of advisors, decide to only link with +CF savvy:
~ Accountants
~ Mortgage BrokersAlso, WRITE DOWN the job description /definition of each member of your Investing Team who’s pivotal in helping you build your wealth /portfolio. For example, one of my mentors defined her accountant as:
“My accountant is employed to make me money. He’s too skilled to pull my dockets out of a shoebox (I pay a Bookkeeper to do that). I meet my bookkeeper at least once a week, and my accountant only twice a year. The agenda when I meet my accountant is clear: Make me more money. If you don’t, I’m moving on.”And geographic distance shouldn’t be too much of a consideration in selecting your accountant. One of the most respected accountants posting on this forum is Julia at:
Do a thorough search of her posts under her “Julia” avatar by clicking “Members” in the top LH corner of this page, and you’ll quickly see how authoritive she is. Make your own decision, but she’s top shelf, okay? She operates out of Brisbane /Sunshine Coast.
Pay $168 for Dale Gatherum-Goss’s books on Trusts: “Trust magic” and “Tax Battles”. This will be some of the best money you’ll ever spend.
(Do a Google search on “Gatherum Goss” to get his website). If you’re REALLY determined to become wealthy (and I hope you are), seek advice SOON about setting up your Family Trust asap (but only do it if you’ll have quite a number of properties over the next, say, 5 years). All up, it’ll cost around $1500 – $2000 and will save you potentially hundreds of thousands of dollars over your lifetime, as well as let you distribute annual profits to all your kids, nephews etc (paper entries only, if you so wish, but you and your hubby benefit from the tax deductions) [biggrin][biggrin]And please, budget on paying a Quantity Surveyor around $400 to do a Tax depreciation schedule every time you buy a new IP (but first check with your accountant re the Capital Gains implications of claiming depreciation on a house that was/is/will ultimately become your PPOR). Tread warily before claiming depreciation on your Alice Springs home when it becomes an IP without first talking it over with your new, +CF savvy accountant (there’s a lot of broke accountants out there who know bu**er all about investing).
Whew, that’s enough for now, I’m exhausted! [blush2][cap][blush2]
Greg
Originally posted by Monopoly:Quote:I have no objections to being quoted, as long as you spell my name right (which you have done) so go for it!!! [tongue]
Cheers, JoHi Jo
Glad you like my spelling. Two letter, monosyllabic names like “Jo” are my forte!! [biggrin][biggrin] I’m also pretty good at four syllable ones like Mo-no-po-ly, because I get to break your 4 syllables into 2 letters each. [buz2]
Seriously though, have I ever told you Niki and I are spelling authors? (Legends in our own lunch hour!!) We wrote Rigby Heinemann’s “Strategic Spelling” Program (14 books from Grades 1 – 7). It’s still a best seller after all these years.
But I treasure my success as a father, husband and teacher much, much more.
Cheers
GregOriginally posted by aussierogue:
g’day remember that your broker has something to sell also. the more you borrow the more commission he makes….but his advise sounds a tad dodgy.I’m with Aussie Rogue, GP, Derek and the other posters on this one. Your broker sounds a bit dodgy to me also.
I’m a school teacher/budding land developer, not a Mortgage Broker, and I have no allegiance to anyone here. However, having said that, may I respectfully suggest you link with one of the Mortgage brokers who regularly post on this forum? You need a reputable broker who’s:
1. Recommended
2. Tried and proven
3. +CF savvy!!! and…
4. Happy to GENUINELY mentor you till you become more street smart about financing your investments (where discussing LVR’s, LMI, DSR etc become 2nd nature to you).If you feel you’ve already invested a lot of time/money with your present broker, an easy way out is for you to buy your Port Lincoln place with him, but look elsewhere right after that for your next IP financing deal/deals.
Good luck
Greg
PS
* LVR = Loan to Value Ratio (how much debt they let you carry)* LMI = Lender’s Mortgage Insurance (you’re in a honeymoon period with these guys at the moment, but watch out, they’re coming after you SOON!!)
* DSR = Debt Servicibility Ratio (where the banks apply a formula which ruthlessly asks: “How much of this couple’s income can they REALISTICALLY apply to service this new debt if we lend them more money?”)
Originally posted by MichaelWhyte:
Greg, SNAP! That is SO my favourite movie of all time too. I just love Andre the Giant, not to mention Billy Crystal and the whole “to blaive, which means to bluff” to which his wife the witch replies “lyer!” and chases him around the house. [biggrin] That is one of the best feel-good movies of all time! Seriously!![biggrin][blush2]Hi Michael,
You like Andre the Giant too? Here’s some more of his classic lines, just to reminisce:
Quote 1:
Visini: “No more rhymes now, I mean it!”
Andre: “Anybody wanna peanut?”Quote 2:
Andre: “How do you want me to kill the man in Black?”
Visini: “Kill him your way!”
Andre: “My way, which way is my way?”
Visini: “Pick up that rock, and when the Man in Black’s HEAD comes around that boulder, HIT IT WITH THE ROCK!”
Andre: “This is my way? I do not think my way is very gentlemanly.”And so the laughs go, onward and upward. Whatever became of Andre the Lovable Giant? Does anyone know?
Cheers
GregOriginally posted by Scremin:[inlove][inlove][inlove] Awww Richmond!!! Congratulations on 1st year!! ….It’s ok. You can be greedy with love tonight… Steph.[inlove]
Hi Scremin
Greedy with love?? [inlove][inlove] …NOW you’re talking my language!! On the surface, we’re all hard-nosed capitalists; deep down, we’re just a bunch of love-hungry softies who drool over all this smaltz.
My wife and I recently spent a bunch of Sundays watching all the episodes of “Pride and Prejudice” with Mr Darcy. Then we moved straight onto “Bridget Jones’ Diary 1 & 2” with Mr Darcy again (no horse or tophat this time, but LOVE those sideburns) and that dastardly Hugh Grant. Schmaltz, schmaltz, even more schmaltz. We just love it! ][inlove][inlove][inlove]
Cheers
Greg
PS: Our family’s best movie of all time is “The Princess Bride” about “True Love”, monsters, swordfights and that CLASSIC line delivered to the dastardly 6-fingered man: “Hello, my name is Inigo Montoya, you kill my father, prepare to die!!!”Originally posted by FireCaesar:
Oh, so that’s what wholesale is all about. I feel pretty silly now yet I’m glad I learnt something. In that case, do people buy plots of land and build houses in them for sale?Hi Fire
Life’s too short to feel silly, right? The main thing for ALL of us is to:
1. Keep learning and (more importantly…)
2. ACT on these new learningsQ: Do people buy plots of land and build houses on them for sale?
A: If you buy a block which someone else has sub-divided, you’re paying retail, because he’s built his profit into the price you paid. But if you subdivide the land yourself, and either build on it or sell it for a (much higher) market price, you’ve paid wholesale and sold it at retail.If you’re new at this game, here’s a simple way you may be able to start. I live in the Sunshine Coast Hinterland in a small country town (Pop 20,000). 6 months ago, a beautiful old Q’lander house on a 1/2 acre block in the street next to our PPOR sold for $160,000. I was away on holidays, so didn’t know it was coming onto the market, and missed out on the deal. The figures would have worked something like this:
~ I buy house on 1/2 acre for $160,000 (not any more in my town at anywhere near that price!!)
~ I pay council “Headworks” charges etc, and cut off 1/4 acre at the back of the block
~ I sell the house on 1/4 acre for very close to $160,000 (that’s right!!) and get a virtually free block of land worth $80,000 – $90,000.What you do with the land, is up to you. I probably wouldn’t have sold the house, just get it revalued to help finance building 2 x 2BR duplex units (brick).
After you’ve done a number of these deals, move on to bigger subdivisions. Budget to spend a modest amount attending a couple of well-regarded development seminars, such as Peter Comben’s:
http://www.smartpropertydevelopment.com.au
Also check out these sites:
http://www.chrisbatten.com.au
http://www.yourproject.com.auThere are many others, but that should get you started. Remember, it’s all about acting on advice offered by experienced operators. [cap][cigar][buz2]
Cheers
GregOriginally posted by richmond:
I should change that profile, I’m 30 now, but the more I read these boards, the more I get confused as to whether I’m virtuous, evil, rich, poor… so many conflicting emotions. Ah well, it’s 6.12pm, tonight’s bulletin is halfway over now, heads around Melbourne are being screwed with… my work here is done. Off to celebrate the 1st anniversary with my wife. Cheers rG’day R
All jokes aside, mate, congratulations on your 1st of many happy Wedding Anniversaries. [biggrin][biggrin][biggrin]
As a very happily married father of 4 grown up kids with 5 gorgeous grandchildren, I can tell you that this money thing is just a necessary sideline to the “main game”….
….It’s called “Family and Friends”, and the real secret is to make sure you focus all your energies on becoming your partner’s best friend in the whole wide world. This sex thing is like the icing on the cake, and Friendship is the cake itself. You can do without icing for a while (though it’s very, very nice). But you can’t do without the cake, right?
Have a great, family centred Xmas
GregOriginally posted by FireCaesar:Hey Greggy, I was really chuckling to myself with your cute little chant “buy wholesale, sell retail”. Really cute.. Did you think of that yourself? Btw, where can one look for wholesale IPs?
Hi again
Wholesale Ip’s? You do them yourself. It’s called “doing land sub-divisions” and/or house and land packages, chief. [cigar][buz2][biggrin]Cheers
GregOriginally posted by richmond:
Gotta go and write something for the news now. Hope I can manipulate the viewers. Cheers rG’day Richmond
Thought you were being happily ironic,[biggrin] so checked out your Member Profile. Here’s what I found:
Marital Status: married Gender: Male
Occupation: TV producer – Ch 9 News
More about richmond Hobbies: Manipulating and controlling the flow of information to the masses. Latest News: just married, approaching 30… is life over?I love it!! A Ch 9 TV producer whose favourite hobby is manipulating and controlling the flow of information to the masses. Keep up the great work.
Cheers
Greg [biggrin][cap]Originally posted by MichaelWhyte:
Greg F, Merry Christmas! Nice pressie!! …My wife and I are flying up to Hamilton Island on Saturday (don’t mean to gloat [cap]) for a week sailing around the Whitsundays.[biggrin] Anyway, a lot of money tends to flow this time of year, and most of it not directed towards investments. Greg, you’re an exception to the rule. Well done! Merry Christmas all, Michael. [xmas]G’day Michael
A whole week? Yachting in the Whitsundays? Now you two have got my JEALOUSY GLAND really pumpin’
When are you two driving up our way to check out your own block of land? [biggrin]
BTW, thanks for finding the Santa Claus icon for me [xmas] Merry Xmas [xmas]
Greg
Originally posted by FireCaesar:
crj, thanks for your contribution.
Greg, those examples really did help. I know how to calculate now.
*Nero huh? Hehe … (That was pretty funny I thought) So what do you consider a good rental yield (as a %)? with closing cost and without …Hi again Nero, [bonjour]
Are you still fiddling while Oz’s bushfires rage, FireCaesar? [biggrin]
Re the type of rental yield to aim for, I’m more into balancing my -ve CF (+CG) properties with my +CF (and, happily, +CG) properties), and still be about $20,000pa +CF in front over my entire portfolio.
It’s harder to get properties at greater than 10.4% yield these days (ie., Steve’s 11 second formula). This fact has happily forced me into “looking sidewards” for a different angle (Steve’s byline: “Success comes from doing things differently” has helped me immensely with my new outlook). So I find myself chanting “buy wholesale, sell retail” as my mantra in today’s market, rather than being solely focused on Rental Yield, as I have in the past.
Whatever works for you, Nero, do that. And meditate really deeply about Steve’s byline, especially on how you might be able to apply it to your unique circumstances.
Cheers and Good Fortune
GregOriginally posted by aussierogue:
g’day – im a bit confused where the 700k amount comes from? and to be truthfull a 700k debt is the last thing i would want at the moment.
i suggest you keep the place – the returns are good. i cant see how an extra 80k (profit as you say) makes a 500k difference in how much you can borrow?? good luck with it either way as you are in a pretty good position.G’day Aussie Rogue
And you KNOW I defer to your knowledge/expertise in this game. [buz2]
I suspect the extra $500K’s got to do with a 90% – 95% LVR quoted from her broker etc. You and I know she and her hubby’s not YET at a point where the Mortgage Insurers will give them a hard time. We’re so used to applying an 80% LVR in our investments, we’ve probably forgotten what it looks/feels like to not always avoid the Mortgage Insurers /keep looking sideways at them all the time. [biggrin][biggrin][cap][cap][cigar][cigar]
Cheers
GregOriginally posted by free@35:Hi Fire, That is pretty much right but it all comes down to your goal, strategy and plan. I am Just begining my investing career but my advice is to read as much as you can and sit down and set some goals (think big), choose a strategy and plan how you will acheive your goal. But the most important thing is to TAKE ACTION!!!! you can always change your plan and strategy later. All the best
Bravo, Free!!
A man/woman after my own heart!
Think big, and put it in writing. All the guru’s recommend it, so few actually take the time to do it. Cheers
Greg
(That was pretty funny I thought) So what do you consider a good rental yield (as a %)? with closing cost and without …
