>>Any further comments/ suggestions?<<

Yes Wrappack. There is a saying that goes like : ‘Too many cooks spoil the broth.’

Or , ‘Too many chiefs and not enough Indians’ if you prefer.

Pisces

and getting a few smaller investors (whom may also be involved in the process),

Ouch.

You can say that again Elves.

$ 250 K

How big was the house ?

How many quotes did you obtain ?

Pisces

>>BTW – I would say that all trusts are set up for tax minimization.<<

Trusts are set up for a multitude of reasons, tax minimisation may be a mere side effect of having a trust.

Your statement that tax minimisation is the primary motif of setting up a trust will make you a prime prospect for an ATO investigation Del []

Watch your words.

Pisces

I only just now discovered this post.
This is going to be a long post guys.

Firstly, a house is often described as being (say) 10 squares.

One ‘Square’ (or Building Square) represents an area of 100 square feet.

So if someone talks about a 10 square house that person is talking about a house which is 1,000 square feet (i.e. 10 X 100 square feet).

A 9 square house is therefore the same as a house of 900 square feet. And so on.

To know what a 9 square house represents in square metres all we need to do is divide the number of square feet by 10.89.

Now to calculate it in our head we can use a rough rule of thumb by just dividing the number of square feet by 11 and we will get an answer which is close enough for our purposes.

So, to sum it up : A 8 square house is actually a 800 square feet house (8 X 100 square feet). To get an approximate idea what it is in square metres we divide the 800 by 11 and we get 72.7 square metres.

Not quite correct as the exact answer would really be 73.46 square metres. However, our earlier answer of 72.7 square metres is a reasonably close enough answer.

Mel said : “I think Actube is talking about ‘squares’ and Risky is talking about square metres. So a 16 square house is as rugbyfan wrote, probably around 170 square metres.”

So, to use the example which Mel gave : a 16 square house = 1,600 square feet and by dividing that number by 10.89 we arrive at 147 square metres, not 170 square metres !!

Celivia mentioned that we can use the NRMA website to calculate the building costs.

Be careful as it is impossible to REALLY know what the cost of building is until such time as one gets several firm quotes.

Even then it is a good idea to get many quotes . Why ?

Well, I’ll give a good example why : One project I was involved in I obtained about 18 quotes. Some of the prices I received were (approximately ) as follows : $ 270K , $ 335K, $ 540K

Quite a difference isn’t it. Why such a difference ? Well, sometimes a builder is busy and doesn’t bother to work it out properly so he just supplies a what he knows is a ludicrous quote.

He is basically hoping that the only other quotes (if any) also are silly prices. If he gets the job he will fit it in his busy schedule. If he misses out it doesn’t matter much as he is very busy anyway.

If one is just starting out and doesn’t know any better one may reason ‘To play safe I’ll get three quotes rather than one’ .

Now if one is unlucky and finishes up with three ridiculous quotes like say $ 460 K,
$ 480 K and $ 540 K we may reason ‘The $ 540K is obviously too high. The builder who quoted $ 460K is probably doing a sloppy job so I’ll go with the one in the middle, the
$ 480K quote.

All the while, if one had actually obtained a lot of quotes one may have finished up getting someone to build it for say $ 270K instead of $ 480K. Quite a difference isn’t it ?

Elves tells the story about some friends who ran into all kind of problems (problems in laying the foundations, holiday breaks, rain delays, council delays – the work doesn’t progress though the interest meter keeps ticking over).

Do builders/developers avoid such things ?

No of course, they too experience such mishaps but ……………….. they allow for it
in their costings. It is called ‘Contingencies’ i.e. a built in margin for unexpected problems and events.

Adrianne, are you telling me that you can buy a block of land in North Queensland, suitable for 6 townhouses for a mere $ 80 K ?

Archizen sums it up very well when he said : “The construction cost ultimately depend on your location and how busy builders are in that area (being in demand = greater profit margin)”.

He also says : “Rawlinson is a great source for costing.”

Whatever publication one uses to get an idea of the building costs, keep in mind that the only way to get a valid idea of the construction cost is by obtaining actual quotes.

Pisces

Now all that makes a lot of sense.

Pisces

Terry said : “From what I have seen and experienced, I would forget postive cashlfow property unless you want to make $2000 or so.”

If one wraps the +ve cashflow can be a lot more than that however.

>>The real money is made from building.<<

Unfortunately one is in the hands of the builder who may cause all kinds of headaches such as long delay to complete, shoddy work all of which adds to one’s holding costs.

Often problems with the builder can be avoided by asking for references of previous jobs. Ask these previous customers whether they have had any bad experiences with the builder and also ask whether they would employ him again.

Always have an architect or another builder inspect the job for you at intervals. Even if the builder insists that you don’t inspect until completion, one can always go to the site after hours.

>>Renovations can often end up not making much money unless your handy.<<

How true in many cases. On the other hand making a property more attractive by cleaning up the house, perhaps painting and/or freshening up the kitchen or bathroom is sometimes very necessary.

In the end, anyone of the three suggested methods can make money for one. All also have pitfalls.

Pisces

>>I would be happy to replace one of the people that have left the MAP programe <<

But Bear, you know already what to do so why would you want to travel from South Australia to Melbourne each month ?

Don’t bother to answer the following question to me. Just answer it to yourself.

Anyone of the people in MAP, do you really think they are different to you ? Superior in knowledge or skills to you ?

You have already publicly announced your willingness
to join the MAP program so that must mean that you think you can spare the time and the effort.

So why not do it all by yourself ?

Pisces

Tony is stating that the IP he bought two years ago and has since increased in value to the tune of
$ 150,000.

Now let me see, many people are unable to save anything, let alone a decent amount.

A decent amount ? How much is that ?
Well let us say $ 100 per week.
$ 100 per week that is about $ 5,000 per year.

By making a simple decision of buying an IP two years ago he has managed, over this two year period, to increase his equity by an amount that would have taken one some 30 years of hard work in order to save the same amount.

Talk about letting one’s money work for oneself.

Yeh, Yeh, I know, I haven’t taken into account any interest your $ 5,000 p.a. can earn. All of some 3% to 5% .

Pisces

The MAP program got people to build up their confidence, get off their backside, go after suitable properties which they otherwise well may have never done, and shown them the way to accumulate assets.

I am very surprised that there is even a hint of negative reaction.

Every journey starts with the first step. That is what those in the MAP program have taken.

It is up to the participants now where they finish up as they have now proven to themselves that it can be done, and what’s more, that they can do it.

BTW, I understand that at their monthly Melbourne meetings it wasn’t the situation that Steve stood up front lecturing.

He provided a meeting place where the participants
mainly were discussing their plans and experiences amongst themselves.

Pisces

He opens the door to leave the house and as he does so he is confronted by his arch enemy (or perhaps a frightening looking madman), frothing out of the mouth with wild eyes and a gun in his (or her ?) hand and he instantly realises his time has come i.e. he is going to die.

Is that how it more or less is ?

Pisces