Hi Milly

Seems to me that Terry and Aceyducey are BOTH on the right track, so perhaps a combination of both their suggestions is the way to go.

By the way, I got your PM, and will reply soon

Cheers

Greg F

Hi Amber_jag

By the way, do you own a Jag? Mine is an awesome Pearl Grey 1988 XJ6.

Re duplexes, please consider building your own duplex pair, it’s dead easy or at the very least you’ll embark on a steep learning curve. There are heaps of people on this Forum who’ve done it. My wife and I own a number of duplexes built by other people, and while they ended up being good investments, they took 12 years before they doubled in capital value. If we’d had the guts to build them ourselves 12 years ago, rather than pay the profit to some other investor, we’d have doubled our investment much, much sooner because we’d make our $$ on wholesale price, not retail

One of the secrets to making speedy capital gains is to get cheap (well below market value), blocks of land and build brand new brick duplexes or a brick house on it. So how to find cheap blocks of land in the city? Here in regional Qld, there are a FEW houses within 3-5 kms of our Post Office built on SEWERED (very important)1/2 acre blocks. For example, one street away from our home we just missed out on buying a beauitful old weatherboard house on 1/2 acre for $165,000. Now here’s the trick: If we cut off 1/4 acre, we could still re-sell the old house on 1/4 acre for $155,000. So, minus costs, we’d get a 1/4 acre block of land for $10,000!!! Allow approximately $15,000 – $20,000 for subdivision and other council costs, and the fully developed block will only cost us $25,000-$30,000. Here where we live, the minimum price for a sewered 1/4 acre block on a bitumin road so close to the Post Office is $80,000 – $95,000. That’s a $55,000 – $60,000 INCREASE IN YOUR NET WORTH/EQUITY BEFORE YOU’VE EVEN STARTED TO BUILD ON IT. Now you register as an owner builder and do your own sub-contracting or get a builder to build a new brick house or a couple of duplex units on it which you might use as long-term rentals, and your property portfolio is off and running with a real head start.

Check the “Subdivision” posts in the past month on this Forum. There’s so much expertise andinformation re subdivision here, so if you know of any such 1/2 acre blocks near your home (and I’d encourage you to think locally, get to know your local ared intimately).

If you just ask the question, you’ll easily link up with other forumites in your local area who run their own local property investing group. These groups meet regularly to swap tips, ideas, resources etc etc

By the way, ignore the agent’s spiel, because it’s the proverbial CR_ _.

Cheers

Greg F

Hi Nordic Skier

Serviced apartments are MASSIVELY DIFFICULT TO FINANCE, yet many of them are really sound investments. I found this out over the last month when trying to finance a serviced apartment in Mandurah WA (I own 16 IP’s, and servicability isn’t a problem). The banks hate serviced apartments because, if you default, they find it a lot harder to force you to a mortagee auction (ie., sue the living daylights out of you) since the Management Company stands between you and the bank.

After many mortgage advisers told me they couldn’t help me, I finally found a broker who found a local WA company who will lend 80% LVR on serviced apartments!!!! This is an awesome deal, considering this property meets the 11 sec formula on NET returns (although not on GROSS returns). $90,000 for a 1 BR wheelchair friendly apartment returning approx $159/week with no outgoings except rates.

If you have any problems with finance, PM me and I may be able to help you with phone numbers/ names etc. I predict you may have problems finding finance, so please let the forum know if/when you seal the deal. Okay?

Cheers
Greg F

Steve,

Due to the recent down time, is it possible to have this auction extended and to be run as Book 1 and Book 2 so we know which one is being bid on??? Or are you auctioning the lot as one auction?

Make me feel like a tightass!!!!

OK…

Book 1 – $150
Book 2 – $100

Is that more suitable?

And I don’t want the prize as I would rather see it get auctioned on the site and the proceeds go to charity. I am happy to pay retail for it when it comes out.

Give the book to Mel!

Well????

Can you explain the answer??????????????????????????????

Steve,

If you mean (sale price) minus (purchase price plus closing costs) less (negative net annual cashflow), the answer is $8,350. Are you certain C should be $18,350 and not $8,350?

Sales costs and commissions cannot apply in the answers provided because no answer allows for the $9,855 or the last number would be a 5.

Answer = E

After paying all expenses, allowing for the negative cashflow and selling costs, the return on the initial 100k is a loss. Obviously tax deductions and depreciation were not used in my calculation as they were not provided in the example.

I should also mention that after reading SIS’s post below that I do not agree with any answer. I just find answer E to be the closest to my answer.

Workings…

$438,000 (Sale Price) less 2.25% (Selling Costs) = $428,145

$428,145 less $9,650 (Negative 1st Year Cashflow) = $418,495

$418,495 less $320,000 (Initial Loan Amount) = $98,495

$98,495 less $100,000 (Initital Cash Put In) = –$1,505

Where can these be bought?