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Roofarmer
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@roofarmer
Join Date: 2003
Post Count: 63
February 20, 2003 - 1:56 am
Hi Buck,
I can wholeheartadly recommend Steve’s seminar. It was definitely woth every cent I payed. His advice is very practical and useful.
“Most people operate under a false ceiling which is 3 feet high” Stuart G Goldsmith
Roofarmer
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@roofarmer
Join Date: 2003
Post Count: 63
February 19, 2003 - 7:48 am
Hi Steve,
I understand your concerns, but I’m just doing a little ‘Guerilla Marketing’ as per Stuart’s advice!![}]
Thanks for not coming down hard on me []
“Most people operate under a false ceiling which is 3 feet high” Stuart G Goldsmith
Roofarmer
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@roofarmer
Join Date: 2003
Post Count: 63
February 18, 2003 - 2:11 am
Hi,
I believe a lot of people attacking positive cash flow are only thinking along the lines of ‘buy and hold’.
This is definitely NOT the only strategy out there and it is possible to find a lot more positive cash flow properties when you look through the ‘lease-option’ and ‘wraps’ looking glass e.g:
It may be possible to take a 12 month settlement from a vendor (under the agreement you will pay him/her market rent for the period and take over all house costs). You could then lease-option a property to a potential tenant over the ensuing 12 months. They pay a small deposit of $2500 (same as your deposit to the vendor) + $25 more rent per week then you are paying the vendor with $10p/w coming off the final purchase price. They also agree to take on all costs and you market the property to them at $10,000 more than what you paid. This in effect helps the tenant save the necessary 10% deposit (they can apply for the $7000 first homeowners at the end of the 12 months also), the vendor is happy because he/she is still getting market rent and no tenant headaches, and you receive 10,000 in profit + $15/wk cash flow (Win/Win/Win situation). Do only 1 of these a month (which is easily achievable) and you are well on your way to a nice little income with relatively low risk. This is called the ‘Sandwich’ strategy!
“Most people operate under a false ceiling which is 3 feet high” Stuart G Goldsmith
Roofarmer
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@roofarmer
Join Date: 2003
Post Count: 63
February 14, 2003 - 7:57 am
I Think FW raises a very good point. What works for one person doesn’t neccesarily work for another.
What is important is to have a goal in mind, a strategy to reach that goal, and a system for choosing your desired properties (whether it be residential, commercial, positive cash flow, or capital gain, or a combination of all).
If you have a goal in mind then everything else seems to fall in place. It’s not about being right or wrong, it’s about achieving the desired outcome you want.
As Steve quotes regularly: “Would you rather be right than rich, or rich than right?” ie. would you rather have the last word but die poor or be open to new possibilities and die financially free?
Just my 2c worth![}]
“Most people operate under a false ceiling which is 3 feet high” Stuart G Goldsmith
Roofarmer
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@roofarmer
Join Date: 2003
Post Count: 63
February 14, 2003 - 2:54 am
Sorry Steve,
I understand the ins and outs of depreciation fairly throughly but don’t quite know how you receive the benefit under a trust structure. Getting back to your example:
Turst Income: $40,000
Trust Expenses: $20,000
Depreciation: $10,000
Nett Trust Income: $10,000
Where does the $10,000 depreciation income go? Does it stay in the trust or does it actually end up in the beneficiarie’s bank account?
Sorry to sound stupid [:0)]
“Most people operate under a false ceiling which is 3 feet high” Stuart G Goldsmith
Roofarmer
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@roofarmer
Join Date: 2003
Post Count: 63
February 13, 2003 - 4:22 am
So you can retain the extra $10,000 for future property deals since depreciation is only an on-paper loss?
“Most people operate under a false ceiling which is 3 feet high” Stuart G Goldsmith
Roofarmer
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@roofarmer
Join Date: 2003
Post Count: 63
February 13, 2003 - 3:17 am
Hi Steve,
So is what you are saying that the actual income you receive is $20,000 ($40,000 – $20,000) but you only pay tax on $10,000 due to the $10,000 depreciation?
Cheers
“Most people operate under a false ceiling which is 3 feet high” Stuart G Goldsmith
Roofarmer
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@roofarmer
Join Date: 2003
Post Count: 63
February 13, 2003 - 12:48 am
Have you considered “lease-optioning” or “Wrapping” the property to the “idiot” in the property or maybe a new tenant?!
Never heard of “wraps” and “lease-options” – do a search on this forum using the words “wrap” and “lease option”.
Remember “buy and hold’ is not the only strategy you can use. Get creative and the profits will flow. Nobody is going to hand you deals on a plate otherwise everybody would be in property (there’s enough people in here already!!).
As Steve says “Success comes from doing things differently”.
“Most people operate under a false ceiling which is 3 feet high” Stuart G Goldsmith
Roofarmer
Member
@roofarmer
Join Date: 2003
Post Count: 63
February 12, 2003 - 7:07 am
Hi,
The 11 Second Solution is a form of due-diligence over the numbers of a property (seperate from due-diligence on the physical property itself, and the potential/current tenants).
Essentially you take the rent achievable on the property, divide it by 2 and multiply it by 1000. The asking price for the property should be less than or equal to this calculated figure. For example: a property advertised at 85,000 renting for $190 week – 11 second solution would be 190/2*1000 = $95000, so based on the figures alone would qualify for further investigation.
Hope this helps! []