Forum Replies Created
Nikki,
Yep, that’s the way to go.
But add a practical element to your theory too by looking for real deals where you can test your theory without necessarily having to purchase.
Part of gaining confidence is the ability to find deals that fit your solution mindset.
It’s a shameless plug, but try to get to a masterclass if you can to find out what professional investors are doing right now to profit in the marketplace.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Nikki,
Just be careful that you don’t match the problem with the strategy, rather you try and match the strategy with the problem.
For example, becoming familar with wraps equips you to solve just one of many types of property problems. A mistake I made when I started was thinking wraps was the answer to every investing problem. It’s not.
As such, you are right to try and crawl first. And in this context, crawling means being able to spot problems and match them up to the right solution.
Sorry if this seems a little vague, but gaining this foothold will be a great foundation to a well rounded investing career.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Ivan and thanks for your post. Welcome to the forums! [biggrin]
Well…
Is the issue the bank won’t lend because an insurer won’t pick up the loan, or is it because of your credit circumstance and a high LVR on this deal?
If I read your post correctly then it is the first issue before you. I know that some banks self-insure (e.g. the CBA used to). It would make sense to go with that type of lender. I would certainly be finding out which branches of what banks are in the town where you are buying and I would approach them directly to find out what their lending criteria are. Be sure to ask what there lending limit is before needing head office approval and try to stick below it!
If it is because of your own circumstance then perhaps try to pay down some debt so that you don’t appear like such a risky proposition even if you do offer to pay a 50% depsoit on this deal.
I hope this has helped. To try and get other opinions I have moved the thread to the finance area where there are contributors with more knowledge re: finance than me.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi and welcome to the forum.
Thanks for your post.
It seems like property spotting and bird-dogs seems to be the topic of the moment.
Rather than replicate discussion elsewhere though, I recommend you check out:
https://www.propertyinvesting.com/forum/topic/15048.html
and
https://www.propertyinvesting.com/forum/topic/14762.html
Be sure to post back if you have any queries.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
It is still possible to buy positive cashflow deals, but it is getting harder and harder.
Martine is right, generally speaking, today you need to create the cashflow stream by solving problems.
In essence, this problem solving mindset is the key theme in the masterclass events that I facilitate. During the day we look at how you can create positive cashflow by solving certain types of problems.
For example, John and Rondah, who were featured in the MAP (book 2), have a niche were they:
1. Buy a property (which is certain key features),
2. Sub-divide the back for a profit
3. Use profits to pay down the loan on the front
4. And thus end up with a positive cashflow outcome and equity to boot.Really, I can’t over estimate the importance of getting that sort of training as opportunities continue to exist is vesry market but you have to know what you are looking for. The days of good deals falling from the sky are well and truly gone.
Hope this has helped.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Muppet,
Who do you think is the best manager in Tokoroa and why?
Cheers,
– Steve McKnight
P.S. Any news about the latest with the mill?
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
My experience is that there are two ways to go:
1. Offer Aus property as security AS WELL as NZ property which will allow you to get finance here for property there.
2. Get finance in NZ for NZ property, but, being an Oz citizen, the LVR may be as low as 60% or 70%.
If you’re seeking finance then it would be worth putting in an inquiry at http://www.propertyinvesting.com/finance as we have an affiliation with a NZ broker who is highly regarded.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
Credit where credit is due. It was Robert Kiyosaki’s book that got me thinking, and his seminar gave me the motivation to go and do it.
As such, I would not be where I am today but for his planting the seed of a life without having to work.
Yes, like us all, he is far from perfect… but he has made a profound difference in my life.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
Further to the policy of this site, Rob was right not to name the product.
It also seems that the discussion has gone off track and as such I have locked this post.
As this is a property forum, it would be wise to stick to discussing property.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi again,
45% down seems a little steep. Shop around for a better deal as the commercial property we have done is on the basis of a 30% deposit.
It might pay to submit a finance inquiry at:
https://www.propertyinvesting.com/finance/ as see what comes of it.Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
Great pick up!
The whole issue of taking a risk is very underdone in many discussions.
Finding the resolve to beat the comfort zone can be difficult, but I’m yet to meet a success in any field that did not have to risk something to achieve a better outcome.
Thanks again for the contribution.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Soum,
Thanks for your post and welcome to the forums.
I think you have a couple of issues to consider, namely…
1. Existing Investment
On what basis, and what expectation, did you purchase this property. I expect that it is for capital gains, but have you worked out how much you would like (as a budget), and then a plan for what will happen if it is under your expectation?
In working out your budget you could think about how much start up cash is needed for your potential business.
I write this to encourage you to come up with something rather than just relying on the market to deliver.
Following on, in a few years, do you plan on refinancing or selling to access any capital gains. There are advantages and disadvantages to both, but remember refinancing only allows access to a % (perhaps 80%) of the gain rather than the full amount. Having said that, if you sell you have to pay tax and sale costs.
2. Potential Business
It would be wise to start planning and budgeting now. Remember to allow extra as initial start up is one thing, but you may also need to fund the working capital prior to the business being cashflow positive.
3. Home
Be careful not to confuse an investing decision with a lifestyle decision. It seems you may want a home as a form of forced saving, and if this is the case there are better ways.
For example, you could set up some sort of savings account that has bonus interest and then siphon off your paycheque before it hits your bank account.
On the flip side, you may get capital appreciation which most likely will not be taxed (if it is your principal place of residence). But doing this means you have two pieces of r/e that both need growth to work.
Again, the confusion comes because you are trying to look at a home from a financial perspective. I’d avoid doing this.
In Summary
I’d encourage you to sit down and work out what you are trying to do in terms of how much cash do you need, why and when.
That way you know where you are now, you know where you want to get to and therefore you can identify the shortest and quickest path between those two points.
It might also pay to sit down with a professional financial adviser to chat your options through.
I hope this has helped.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
Shortly we will be releasing ‘Investment Detective’ which is software designed to help you crunch the numbers and keep track of your property profits.
It is designed to work alongside a MYOB or quickbooks so that you enter in the day to day information in those programs and then input the totals (for the relevant items) into Investment Detective for returns to be calculated. The special introl price will be around $70 (give or take). Stay tuned for more info.
Other than that, I know that Somersoft have something called ‘PIA’ which I assume will be relevant for your purposes. The product blurb can be found here. It is priced at $245 though.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi loanwolf,
I’m glad you are enjoying the book.
My first book concentrated a lot more on the strategy, but having said that, I wanted to correct the weighting which is why I included so much ‘self-help’ in the second offering.
As for a plan, I’d suggest you work out two things:
1. How much income per annum do you want?
2. When (date) do you want to achieve it?Answering these questions will provide a context for your investing and a yardstick about which properties to buy or leave alone because if it doesn’t bring you closer to your goal then why buy it?
As for travelling – go for it as a lifestyle decision but understand it is harder to earn than to spend.
For example, if you have a $100 and spend $10 then you have given 10%. But to go back to $100 from $90 requires an 11.1% return.
Best of luck with whatver you choose [smiling]
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Michelle,
Hmmm…
Well, to add to the discussion, the first question you need to ask is “what outcome do you primarily want from investment?”
The two options, at this stage, are either positive cashflow (this is, income) or capital gains (that is, growth).
Inner City Apartments whould normally fit into the growth model given most are negative cashflow. Therefore, the name of the startegy is to get more cap gains than any income loss.
That said then, let’s quickly crunch the numbers:
Rent: $26,000 (fully rented)
Loan payment: $12,250 ($175k @ 7% I/O)
Management: $1,820 (7%)
Body Corporate: $2,500 (say)
Repairs: $500 (say)
Other: $500 (say)Net Cashflow: $8,430
Cash In:
Deposit: $175,000
Clsoing costs: $18,750 (5% of PP)
Total: $193,750Cash on cash return (CoCR): 4.3%
Capital gains: ???
The reason this is +ve cashflow is because you have contributed so much cash. On the flip side, doing this kills your CoCR.
You can get 4.3% at the bank no-risk, so it is not enough to go into the investment considering the extra risk. As such, it will be the expected capital gains that makes the deal sweet.
Having said that, I’m not too sure if Inner City Apartments are well placed to earn cap. gains… but you need to make up your own mind.
I hope this has helped.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
This is quite a specific question and it would be wise to pay for some professional advice.
in the meantime I suggest you read the following two resources from the ATO:
and
How does the margin scheme apply to supplies of real property acquired on or after 1 July 2000?
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi John and Paula,
Thanks for your post and welcome to the forums.
I’m not sure who told you not to use loans as leverage is important to access ‘professional’ returns.
Having said that, borrowing money has risks involved which need to be mitigated and managed rather than avoided.
As for a downturn… my own opinion is that it is likely, however, in the same token, not all properties will be affected.
Personally, on the face of it, a 72% CoCR deal sounds pretty good to me! Furthermore, if you focus on the income does it matter too much if your property loses some capital gains in the short-term?
Just avoid being placed in a situation where you may be forced to sell and bank your income in the meantime as the momentum to carry you through the flat periods.
If you feel comfortable, can you flesh out the nature of the deal in more detail? It would make for a good discussion.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Paul,
Thanks for your post and welcome to the forums!
The eternal question… “Where are the deals?”
The second book may shed some more light on the issue, but here are some thoughts:
1. In the current market, deals are made rather than bought. Find problems and solve them!
2. The best deals are not necessarily advertised, because problem properties are usually silent or old listings. Real estate brochures have the glossy marketing hype which is based on emotion. I prefer the ‘ugly sister’ houses that are held in less esteem.
3. Finding deals requires effort, which in turn is a matter of leaving your comfort zone and getting out there in the market place and looking with your own eyes.
For example, Dave was in NZ last week doing some property portfolio management when he stumbled across a great opportunity. He would not have found out about the deal unless he was on the ground.
You have heard ‘be in the right place and the right time’… well, rarely is the right place where you are most comfortable.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Simon,
From the research I have done they offer +ve cashflow deals based on some rather large assumptions.
Also, the deals I’ve seen are not +ve cashflow in their own right… they are net of tax deductions.
Just go in with your eyes open. In particular, be mindful of the fees, the budgeted vacancy, the attainable rent, and the annual expenses.
One final thing… ask yourself, if this is such a great deal, how many of them would I need to own to achieve my investing objective.
Hope this helps.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
I understand that, like most of Aus, property prices have risen there quite substantially in the past few years.
As such, just make sure that the assumptions behind your plan to make a profit are valid. Don’t make the mistake of assuming past results re: market capital appreciation will go on indefinitely.
What is the nature of the deal?
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
