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Welcome, and nice to see an open mind.
Before I start, also have a chat to Dazzling, our accomplished commercial investor – he may have some valuable insights about ideas you haven’t thought of.
The answer to all of your questions can be put in at least two ways:
1) It depends; and
2) That’s subject to negotiation.Flipping often depends on having a buyer ready – it requires balancing a variety of interests and extracting yourself and your profit. Why not ask on this forum to actually contact the MAPPERs who did flips? They’d be more than pleased to help, no doubt and some of them are fairly identifiable by their names. [biggrin]
You also need a backup plan – what if it goes pear shaped? Don’t let that stop you, just have a strategy, or 2 or 3 or 5! BE Steve and Dave, OK?
And finally, in the words of Napoleon Hill (but maybe not the way he would have said it): THINK and grow rich .
I’m going to generously assume that you are not spamming the site to drum up business.
That said, anyone investing in a country where they can’t speak the language and don’t know the law will get everything they deserve – no money, no property, huge debt and possibly a criminal record as well. I have ugly examples.
If Turkey largely runs on Islamic principles, then mortgages may be illegal. If they are, you can expect no property boom anytime soon. Finally, the foreign investment rules often catch people out- Australia’s are a case in point, but other countries can be much worse.
Big heaps of caution, OK?
Mitchy,
I’d guess you’re new to the game. Essentially, in residential real estate there are two possible goals, often mutually exclusive. (Not always).
The first is what most investors do – buy and hope that when they sell, the profits plus the tax breaks they have received will more than cover the losses.
The other way is make sure there are no losses on the way (cashflow positive (or CF+) investing). Steve’s books have advocated the second way and I tend to agree. Then, if you sell at a profit, you know you’ve had two profits along the way.
Back to your question though. Rural towns and cities are not know for spectacular growth and if Murray Bridge has just had a spurt that’d be it for now, IMHO. Murray Bridge is nicer than Tailem Bend, but that’s about all it’s got going for it until the river mouth is really permanently open. I’m an ex-croweater, and it’s my opinion only.
In your position, which I’m not, I would be looking for houses which I could add value to eg. buy and do up. What if a $140K house can only get $180 pe week? Not good, but what if by spending 20k you can increase the value to $180k and the rent to $260 per week?
Steve will tell anyone with the ears to listen that you have buy a problem and sell a solution – I suggest that you buy the books he sells (I know the proceeds from at least one of the two goes to charity anyway) and get inspired.
Regards, and best of luck.
My thought is that if your firend was making 10% per half year on $200,000 cash, he or she would have been better off to leverage that investment and invest in more of the same. At only 50% leverage that would be $80k per year (less 13k interest) – enough to sit pretty on, really. Why buy a house with an asset like that??
What town or suburb is your target in? Don’t give away too much info, but ask if anyone else is renting in the area and can give you some resources to check out the offering.
Also, do the figures and be clear as to why you are doing this. Does the property fit into your strategy? If you haven’t got a strategy, get one of those first.
Cheers
Here’s a piece of late breaking advice. Have the names of your property manager, the vendor and your real estate agent ready. Some banks which are otherwise prepared to do business with Australians (and there are few enough around!) will not touch properties managed by certain folks or bought from certain folks.
This is because some managers have a reputation for managing poorly, which damages your profitability and hence ability to repay the loan and some vendors have a reputation for shoddy properties which means the asset is not worth the loan. Only the bank can tell you which people they will or won’t deal with.
If the bank you choose doesn’t have these criteria, you’ve lost nothing, but you should check whether they plan to ask the question.
Vyvyen,
As you probably don’t like baked beans much anyway and can’t move for 2 years, what’s the rush?
After a week, go back to the agent with your $1.4m offer, let him know that it remains open and you remain ready to talk. Then don’t do anything.
If he’s half decent as an agent, and they get another offer, he’ll come back to you to see if he can get a better deal from you. Don’t forget to ask to see the competing offer, BTW. Sometimes they will and sometimes they won’t, but you should at least try.
Possible results – some maniac will offer over $1.6m. You can’t afford that, game over.
OR
You’ll be the only bidder – you may be able to come to an agreed figure. Don’t forget, the vendor may have needs too. Strong possibility that you can get it for a decent price.
OR
Others will be interested, but not at the asking price so there’ll be a bit of a dutch auction. Outcome uncertain.Have a game plan, and stick to it. One other thing – go hunting another dream home as well, so that you can start the process again. If you find one, let the agent know you are offering on other properties.
My advice is: Be aware of the risks.
If a deal goes sour, your name will be attached.
If you are dealing in property, you may require a licence (don’t treat this casually, you need to know what you are doing).
Finally, if you find a great deal, why would you pass it on instead of trying to raise the capital to do the deal yourself? If it’s not such a great deal, how will that help your client when you stack your fee on top?
Not trying to rain on your parade, just think you need to consider the downsides – bird dogging sounds like it’s an easy licence to print money but there are risks attached.
Check your facts, Ned. There is a capital gains tax in NZ, currently set at zero. It’s an important difference.
Many people are buying in Sydeny, but the investors are nearly all CG oriented, not CF oriented. If you buy now for 4% then you’ll have to double your rent to get to 8%. I don’t see house prices halving or rents doubling in the short term. Also, if there is a housing shortage then house prices will continue to rise, leaving yields in the trough.
Just my thoughts
Originally posted by resiwealth:Wildlywealthywomen has proven to be a great success already in Australia however as Josie and Suzie explained to me so many people self sobatage themselves in building wealth because they fail to change their fundermental root system.
There can’t be two groups by the same name, surely, and Wildly Wealthy Women and its two principals are certainly being taken on by ASIC (along with channel seven), accused of lying about their own successes and exaggerating the possibilities of their program as I understand it. Innocent until proven guilty, of course – ASIC doesn’t always get it right.
This article was hilarious. First it said rents were too high. Then it noted that there wasn’t enough public housing so (implication) the burden falls on investors. So the tenants association proposes what? To end negative gearing! While those who know me know that I’m no fan of neg gearing, what is going to be achieved by killing off further investment? Higher rents, of course.
These guys!
Originally posted by markdangerousQuiggles i agree with you for the most part, especially about asking better questions, however i always thought that the truth is an absolute defense against charges of demanation. If someone responded with facts, i dont see a problem with that either ethically or legally. But what would i know.
On another note: I’d be interested to hear about your “lessons learned” in your USA investment if you care to share it with the forum???
Mark
In response, as noted by giddo, truth is not a defence against defamation. it must not only be true but in the public interest or defaming someone who lacked a reputation to injure or something else. I’m not a lawyer. Truth is a defence against slander and libel, which is why politicians nearly always launch defamation suits to shut someone up.
My adventures in the US were originally posted in the a different forum and crossposted to here. I’m not quite sure where, so I’ll post the original link http://www.somersoft.com/forums/showthread.php?t=18101.
I’ve been in the US market for a year now and it is NOT straightforward. I’m flying back tonight to try and straighten some things out.
Originally posted by munjy:How come everything said above has to be mutually exclusive?
[snip]
this is the kind of win/win deal he’s always looking for?Precisely my point as well
Originally posted by markdangerous:Quiggles,
Whats wrong with asking about people on these forums? Especially people who overtly or subtly promote their services here?
Defamation? I dont see how that is a problem. Please explain.It’s pretty simple. Suppose you were offering a service, let’s say selling computers and someone on a message board asked for people’s opinion of you. Suppose then that I bagged you out (whether or not justified).
EVEN IF JUSTIFIED, it can still be defamatory, although not slanderous. You would be in a position of suffering loss of reputation, and of income and could sue both me and the operators of the board that published the defamation. This is in no-one’s interest.
It also means that in answering the question, no-one with a negative view should be stupid enough to say so, thereby skewing the answers.
Far better that people ask and talk in terms of what they expected and what happened. In terms of the US market, I’ve bought over there and not everything was positive – however, I KNOW that this was due to me. Someone else, having had expectations that may not have been clearly , may hold Westan to blame for things which simply aren’t in his purview or which aren’t part of the service he offers.
What I’m saying is that there are better and more suitable questions to ask. My email above suggested some of these.
Originally posted by markpatrick:
I can`t help but think that Steve and other seminar/strategy salesman at the end of the day would earn thier money in property if they could, since they can`t they play the amway/money streams game.
No malice in my opinion but it`s what I believe to be fact.I think you are ignoring a very sensible possibility. Why can’t they being doing both? Sure, they can make money from the seminar biz, but you must be aware that they have been active in property recently in both NZ and the US – it’s been in the papers.
In fact, someone in this forum was complaining that they were still active in property, and why couldn’t they leave well enough alone to leave room for other guys.
I hope EllyH had the presence of mind to get some quick one on one mentoring in “just to get an example of what you are offering” of course!
[biggrin][biggrin][biggrin]
At those prices, and given the returns being received in Sydney, I hope your investors can claim tax deductions for overseas rental losses.
I wonder if proximity gets its name from being under the airport flight path – er, I mean, close to the convenience of Mascot?
EllyH,
I think you were right to raise concerns and also right to post you decision and conclusions. The same info will not lead to the same conclusions for everyone, I hasten to add.
I think the point that some may have missed is that Steve and Dave have a brand name, a value, that they can’t really afford to compromise in the pursuit of a short term dollar. If they get pilloried by paying customers (and I point out that no-one posting here pays to do so) then not only will they have cost themselves considerably but it will pretty much be the first time.
Given that, it’s probably incumbent on those who don’t wish to partake to practise a little restraint in crticising – after all, to criticise a program BEFORE it starts on the basis that it can’t deliver the results is a mighty leap of negative faith.
EllyH has set out clear reasons why she’ll pass, but she’s doing so on the basis of good and thorough information and applying that to her circumstances.
Might be nice for others to hold the personal criticism down for a while eh?
I think Dr X meant “he is” to mean he is trustworthy, not the reverse.
You should not seek potential negative comments on a forum like this anyway, it is not appropriate and anyone posting bad stuff may be defaming their subject. A better way may be to ask folks who have bought what their expectations were, how things worked out, what their learning experiences were etc.
