Forum Replies Created
Depends on where you are and what exactly you want…
What constitues “the best” investment will largely be based on you. If you want something low maintenance then a wrap or a strata title appartment may work better, if you want to raise the value yourself with your own hands (or tradespeople [
]) then maybe a renovation would be better. If you want to renovate then a house may be easier than a condo. If you don’t have much money, an appartment may be better than a house. The list goes on and on, and the only way out is to decide what your goal is and then ask *specific* questions to help you get there. EG– How much TIME can you afford to put into your investments (both in hours per week and yearss)
– What are you willing to risk?
– What aren’t you willing to risk?
– Which risks do you know how to mittigate (take some kind of action to minimise or make less likely)?
– What would/wouldn’t you be comfortable doing? (EG Mass lowball offers may get you the best deals, but are you willing to have irate vendors/agents on the phone regularly?)
– What would you ENJOY doing for years to come? (Dealing with renters? Leasing out to businesses? – You’ll only succeed at what you choose to do day to day, and you’ll only do what you like doing!)
– What are your partners responses to these questions? Can you live/work with these?It can seem a bit overwhelming at first, but my advice is to read LOTS, ignore anything from anyone who isn’t very successful actually doing what they preach, take notes on what seems good to you even after extensive research, then…
DO IT!
(and learn from the inevetable mistakes, but eventually get it right, make money and be happy doing it…
)Quasimodo
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We are all but half formed images of our true potential.
___________________________________________________________________________Can you think of a better way to become “financially minded” than to be tutored by people who are?
I can’t!
Maybe that’s why I’ve become a seminar junkie…
Just as well they (nearly) always pay for themselves many times over! []All the best! You’re on the first step to a better path.
Quasimodo
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We are all but half formed images of our true potential.
___________________________________________________________________________I’m sure there are others here who would appreciate hearing about this, too steve! [
]How about a post to the board? Other than attending PM there’s not a great deal of info on who you’re looking for.
BTW Great idea! All the best with your book!
Quasimodo
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We are all but half formed images of our true potential.
___________________________________________________________________________Hi Fireman!
You wouldn’t happen to be the same fireman from the JB forums by chance? If so we know each other and I’d love to hear how you’re going!
HINT: I’m a certain ex staff member you’ve met at a number of seminars! [
]Quasimodo
[email protected]PS If you’re NOT the Fireman off the JB forum feel free to ignore this! [
]___________________________________________________________________________
We are all but half formed images of our true potential.
___________________________________________________________________________Hey there Peter!
The version I’ve heard advocated is to send out mass lowball offers site unseen with escape clauses and then to just inspect the ones that bite, as it were. The idea being that you only spend your time looking at the bargains. Just be prepared for a bunch of unhappy WTF!^%!&^!!!! phone calls from vendors [
].Quasimodo
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We are all but half formed images of our true potential.
___________________________________________________________________________Just another thought for if you’re wrapping…
One of the ratio’s I’ve come across a few times is the “will tennants actually be able to afford it” ratio. EG will the payments be (overly) disproportionate to rent rates in the area. Another well known wrapper (who will remain nameless! [
]) works to a rule that the payments should be around 20% higher than the rent would be. Based on this and your numbers at:$125,000 purchase
8% Interest (assuming you have the 6%+2% margin)
payments = $965
Rent in the area is $190 (or $823 a month)
making payments 17% above rent rates.:. a reasonable proposition to attract tennants!
NB If you raised the margin to 2.% payments would be 22%, still a reasonable figure!
Quasimodo
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We are all but half formed images of our true potential.
___________________________________________________________________________Most lenders will let you do this, however for them to consider it, you’ll need to provide them with a good reason first. EG “I bought six months ago at full market value (show comparables) and since then prices have risen 15% (show data from someone linke RPData/Residex and/or comparables). I’ve improved the property in that time by painting, mowing etc. etc (show photo’s). If I get a valuation by someone on your valuation board showing that the value has risen by 15% will you refinance me to that value (because I’d hate to have to take my business elsewhere…. [
]) If they say yes in writing, hire someone on their valuation board to come and do a full inspection and valuation as you show them all of the improvements you’ve made and the recent comparables. Take the valuation to the bank and collect… [](In case you’re wondering this is a mix of Peter Spann, Dolf DeRoos and a number of other speakers who’s names elude me…[
])Good luck!
Quasimodo
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We are all but half formed images of our true potential.
___________________________________________________________________________My thoughts are how you can use the “tennant trashes the house” scenario to your advantage…
I know Dolf DeRoos jokes about getting comprehensive insurance so that any time he wants to get to “repair” his property for free he just moves a biker gang into his property and waits for them to “do their thing”! No disrespect intended to bikers, so much as to get the brain ticking over how this risk could be mittigated or even benefitted from… [
]Quasimodo
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We are all but half formed images of our true potential.
___________________________________________________________________________I second that
Why would you sell a good investment when you can access the equity cheaper and still retain control of the original property?
I’m not about to pay the government more stamp duty than I absolutely have to… [
]Good luck!
Quasimodo
Please forgive the slightly long post. I’m seeking some thoughts on what might be my best strategy going forward from my current position. My goal is (not unusually) to attain a level of financial independance that will allow me the freedom to travel.I purchased a house (my PPOR) just over 12 months ago. The property was purchased for $275000 including all settlement costs and is currently valued at around $350000+. If I sell using an agent I can expect to reap a CGT-free profit of around $65000 after all costs are taken out.
Should I sell and purchase a smaller place more suited to my personal needs and use the additional cash to begin an investment portfolio or are there better ways to access the increased equity in the current property. I am concerned that by selling now I may be selling during the early stages of an up-swing in the local market (Cairns) and may just end up forgoing a much greater profit.
Any thoughts?
Cheers,
Steve___________________________________________________________________________
We are all but half formed images of our true potential.
___________________________________________________________________________Hey Nick!
This is a fabulous opportunity! Long saettlements are normally something *you* want to negotiate fore, not the vendor! [
] You might want to agree to the long settlement on the condition that you have access to to the property for the purposes of making improvements. This way, you have six months to make cosmetic improvements to the property (EG paint, mow the lawn etc – all of these can be done by someone else). Six months from now you go to your financier and say “I know I bought this house for $XXXX, but since then I’ve improved the property and property values have gone up (show recent sales in the area and a valuation by someone on their board of valuers), so I would like to have the property value raised to $YYYYYY. If they agree (which assuming the growth you’ve talked about has happened) then suddenly you’ve got a stack of equity that can be used in all kinds of ways….Just a thought! [
]Quasimodo
hey people!If anyone remembers I first posted on this forum around Christmas time. I am 19 and am now in the process of purchasing my first property! It’s very exciting!
Anyway, I just wanted to ask the experienced ppl for advice on something. I have found a great property that is positive cashflow in a growth area. I negotiated a great price, but the agent just got back to me today and told me that the owner wants to settle in September! Because I live in Sydney and the property I’m buying is up north, I am yet to see the contract. The agent did not mention the long settlement up to this point.
I don’t quite understand why they want such a long settlement. The agent said it was for ‘financial reasons’ and I have already been told that she is in financial difficulties.
I don’t want to walk away from the deal, but since I now have the upper hand I thought there might be something creative I could do. But I’m not quite sure what – does anyone have any suggestions? I’m going to try to negotiate a lower deposit for a start…but if she needs the full 10% for whatever reason then maybe I could draw up a separate agreement for her to pay me interest on that money. I’m trying to think of a win-win outcome for both of us.
Anyway, would love to hear any suggestions.
-Nick___________________________________________________________________________
We are all but half formed images of our true potential.
___________________________________________________________________________Hi Mary
I’ve done Henry’s property course and have actually been working in the seminar industry for quite a while (am currently off in Canada not working for anyone so my advice is relatively unbiased at the moment
. My experience was that I was very impressed when I first went to Henry’s course as he rattled off masses of information at a very high speed. His techniques of extreme due dilligence and selling are very strong. Particularly the selling part. And this is where I would be extremely careful. It didn’t take me long investigating the techniques taught at his seminar to realise that to a large degree they were based on an ever rising market, massive leverage with scant risk mitigation and some extremely dubious issues of non disclosure. On a more personal note while Henry was able to sell me on his negotiation and sales skills, he wasn’t on his integrity. I wanted to make sure I wasn’t being overly hasty and so checked with a number of industry friends. It turns out that one is currently suing NII for not disclosing that they happened to be selling developments in many areas that just “happen” to get strongly suggested in seminars. Another who used to be the key testamonial for this seminar informed me that the three properties she “invested” in with NII at her risk have lost about 3x$50,000 on three properties, although she maintains that it is not so much they went down in value as that they were never worth the valuation price in the first place. Henry talks at length in his seminar how to get valuations changed.
Anyway, all of these bits of information should obviously not dissuade you from making up your own mind. With any seminar presenter you’re thinking of spending money with my advice would be to at least check pending legal disputes with the office of fair trading first. There are many presenters who do a great job of both presenting strategies and strong ethics together. Steve is a great example here, as is John Burley or Anthony Robbins (be mindful that his Wealth Mastery course is only shares and options though. Great stuff if thats your direction.)Hope this helps.
Quasimodo
PS Henry *is* a great salesman. I’d study any sales package he put out in a heartbeat!
pps If you check the fineprint in Wealth Creator magazine you’ll find the whole thing is an NII creation to sell their seminars. See my previous ps!
1/How would a 2% increase in interest rates efect a property.
If you have your tennants rate tied to yours, then they are covering it, having gone into the deal full well understanding that this is how it works.
2/ A tenent can not be found for a property for say 3 months.
This is why you advertise for tennants *before* buying the property and build up a database, firstly so you know you have a tennant lined up and secondly so you know the demand is there if that tennant defaults later.You can even get an agreement on sale contract signed before purchase to guarantee tennancy. Its all about negotiation. [
]3/ The banks want more security when times get tough (investment doesnt come up to valuation).
This is why you always keep a percentage of any profits made aside in your “security bucket” to cover you in tougher times (as with *any* investment). You can use this to provide colatterol in a number of different forms “when times get tough”, especially when you consider that these “tough times” are often the *best* times to be taking advantage of new opportunities while investors who haven’t covered themselves are panicking at offloading assets at firesale prices.
What is the point of cash positive properties? are they used for extra weekly income or will they be used to retire, if it is the latter how is this possible!
If you retire with a massive paper portfolio do you care exactly which shares/mutualfunds/bonds etc you have – or do you care about the stability and income you get from them?
Your houses, selected well, provide enough income to create a self perpetuating business entity that continues to purchase more income producing property without you. The fact that the exact properties your business owns may change from decade to decade is irrelevant compared to the income it creates and the stability of the asset base. Steves shown that the income works, and if you want more stable than the most average residential property then the world of investing may not be for you.Please fellow postees give me answers, you havent as yet
Hope this helps! [
]
]) then maybe a renovation would be better. If you want to renovate then a house may be easier than a condo. If you don’t have much money, an appartment may be better than a house. The list goes on and on, and the only way out is to decide what your goal is and then ask *specific* questions to help you get there. EG
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