I don’t want to enter into an argument with anyone but this is how I see it :

>>an investment of $200,000-$500,000 with a fully secured first mortgage at 15% pa guaranteed.<<

Fully secured eh ? No pitfalls ?? No risks ??

Impossible.

Anyone who borrows money and who is prepared to pay 15 % has got problems and those problems can be passed on to the lender.

The least that is likely to happen is that the loan isn’t repaid on time (and, as well, most likely, the interest on these loans isn’t paid as and when it falls due as well).

I was in someone’s house yesterday and that person happens to run a business lending money (via second or third mortgages) to people in trouble and he only lends up to the 70% to 75% LVR mark and he enjoys some protection as he requires a sworn valuation from a valuer appointed by him.

That particular person has about $ 2.5 m in outstanding loans. He showed me a report of these loans and all bar one were in default by having exceeded the agreed loan time period as well as the borrowers’ interest payments being in arrears.

Now that lender has lessened his risk by having his money spread out over several borrowers and he isn’t at all unhappy about all those loans being in default as penalty interest cuts in.

That particular lender is however in a different situation compared to many of the people on this site in that, even if [unlikely at it may be (though quite possible)], all of this money were to be lost, he can survive because of his strong financial position owning other assets.

Now if one is parking one’s money in a bank or a cash management trust until one finds a good buy to spend one’s money on that is one thing.

However, based on my friend’s experience, lending in high risk situations appears to imply that one cannot count on one’s money being available when needed.

Pisces133

Hi Andy,

Would never have thought of it. You have me thinking. Questions .. does it need to be listed at all to attract a multitude of us (me) small time investors? Could say 20-30 investors, create enough leverage to achieve your goal?

I like your big thinking. Now I’m picturing a co-operative virtually buying a town. Imagine a group approaching a council/shire with a take-over bid. Hey, lots of food for thought here. I’m already seeing examples of win-wins for all.

Keep talking mate .. something will come of this. I get the feeling that this is an extension of a previous discussion we had. I like it. Keep the thoughts flowing.

Kind regards, Phil

The title of this subject is ‘Student apartments+ Cashflow’ so Prop16 is talking about a building specifically or mainly occupied by students and he isn’t talking about a block of units operated as a hotel by someone who holds a headlease.

If it was operated as a hotel then I personally wouldn’t have a bar of it as it may be hard to resell at a later date.

If it however was near a university and it was occupied mainly by students it may be a proposition.

A friend of mine owns a block of 18 bedsitters near the University of NSW and the building has a very good occupancy rate.

Yes, he may sometimes (as he has at present for that matter) have say three vacancies but they fill up very quickly.

The one thing which sows doubt in my mind is that the rent (for a bedsitter mind you !!) appears very high.

Better make sure that that is indeed the going rate and not merely a ruse to suck you in.

A drawback ias that finance may prove hard to come by for a bedsitter.

If the living area is less than 25 sq. metres
it will be just too hard. As it is there are very few lenders who would be prepared to lend on even a 25 sq. metre bedsitter. In any event the location may put lenders of as well. I suggest you better check all this out before you put your signature on the contract.

Cheers,

Pisces133

>>It is a good way of buying any property that you plan to onsell rather than settle on.<<

I am sorry to be a spoil sport but there is no such thing as a guaranteed profit.

There have been many people this year who got burnt buying units off the plan a year ago both in Sydney and in Melbourne (which I know of).

The problem is that if you enter into an agreement today, and the construction takes the best part of one or two years to complete, a lot can happen in the meantime.

Pisces133

ok….eating rabbits OR rats?? Ill pass on either or both! LOL

pass around them Quick eze!! [xx(]

[]

~ It is better to live on your feet than to die on your knees ~ :þ

ohhhhhh a 3some?? *grabbing the whipped cream* hahahahahaha [}] [}] [}]

Now now polar….diamonds, flowers, chocolates and the occasional puppy IS what women expect!!!

Alas…dirty laundry, never getting near the remote control, and an object that snores louder than a boeing 737 is what we usually end up with!! LMAO

~ It is better to live on your feet than to die on your knees ~ :þ

sooshie we used to go down to williamstown back beach and feed the rats down there after midnight!! The place was always full of rats picking up the scraps the swans left during the day. There used to be some huge rats down there too!! Im talking BIG BLACK and MEAN!! (we never feed them ones LOL)

A friend of mine works at the crematorium and he swears they have rats bigger than rabbits there!! Anyone for a pet? LOLOL []

~ It is better to live on your feet than to die on your knees ~ :þ

Jetster, how did you know what the land was worth ?

Pisces133

Hi again,

I think we have opened the Pandora’s box here. As usual this is great discussion and learning for me.

Re the 6 year rule. I have seen it make a difference of over $4,000 on a tax refund compared to a prior accountants uninformed projection of $250. That was just this last financial year.

Mel .. yep, I have always thought that everyone should rent from one another. I betcha if we did the ATO would change the bloody ruling though.

Skippygirl .. you have read my mind. I should clarify, I have already done the debt consolidation. No ute payments, no credit card debt.(I have not touched the card for months). I owe $220K on a PPOR with a “drive-by” bank valuation of $255K. Agent reckons I’d realise $300K. I only need just over $275K value to get under that elusive 80%. By the way, you are more than qualified to comment, as I believe very few people here have achieved positive cash flow properties.

I want to get off the merry-go-round, your collective discussion is appreciated.

Kind regards, Phil

p.s. considering posting a new topic with 2 very basic questions. I trust that you guys will bear with me in my asking.