Forum Replies Created
Hi,
Thanks for your post. What I’m talking about are deals that may seem unusual or creative, and once upon a time would have been accepted by speculators, but now are seem as too risky.
However, for investors with the right skills and attitude, these deals are as profitable now as they were in the boom, as the result is made rather than bought.
A good example is a development project. Not long ago just about any novice investor could have puchased a suitable block of land as, since the broader market rose, made a proft.
Now though, more skill is involved as the profit must be made in the value add in the deal rather than relying on broad cap. gains to drive prices higher.
Hope this helps.
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,
Thanks for your post.
WG will be back, better than ever, in 2005. Dave has recently completed the audio, and next he just needs to update the notes.
We have the next round of Masterclasses to complete, at which point it’s time to complete some exciting developments we have planned for early 2005… one of which is the release of the new WG.
Thanks also for your words of encouragement.
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 JoD,
Welcome to the forums and thanks for your post!
Congrats on taking the plunge, but don’t let the pace of the market force you into a hasty decision. One possibility is to agree to buy, but to add a ‘subject to a building inspection to the purchaser’s satisfaction’ into the purchase contract. That way you’re not delaying showing your intention (i.e. sitting idle while someone steals the deal), nor are you locked in completely to the contract.
Some very quick calcs for you:
Cash Down
Deposit (say 20%) = $40,400
Closing Costs (say 5% of purchase price) = $10,100Total Cash In = $50,500
Rent
Per annum = $18,192
Expenses
Management (7%) = $1,274
Interest = $11,312
(say 7% and I/O for ease of calc)
Other costs per you = $6,995
Insurance (say) = $500
Repairs (say) = $500Total expenses = $20,581
Est. Cashflow = -$2,389
On these numbers it looks to be a borderline deal, especially when you factor in 100% occupancy for the rent. Also, if you do P&I loan repayments, or load up the debt further, then your cashflow will almost certainly be more substantially negative.
As such, IMHO, buying as a +ve cashflow deal (not inc. deprecn) makes it ‘on the line’ at first glance.
Check for ways to reasonably / creatively increase rent, or else is there another use for the property to increase profitability?
Nice to see you on the forums. Don’t be a stranger!
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
Dan,
Great to hear from you. Site looks good! Clean and full of great info… well done!
Haven’t received the book yet… but am looking forward to it when it arrives.
Keep smiling,
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
Okay Jo,
It’s time for me to turn the other cheek.
If I have done worng then I have attempted to right this by reposting to the original question.
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
Okay… I’m not sure why, but there does seem to be some confusion. I thought Del answered the question okay which is why all I did was point out that the answer (i.e. property) was also in the title.
Anyway… so as we are all on the right page, and to clear up any confusion, let’s start again…
Joseph,
Thanks for your question.
The title of the new book, which includes the words ‘in property’, indicates that the value is indeed the property value at the end of the MAP, rather than the loan value, or any other value. Having said that, the ‘cost’ of each Mappers property portfolio is included in the book so readers can judge performance.
This is consistent with information in the online shop that details the book where it is written(emphasis added):
The title for this book is derived from the Millionaire Apprentice Program (‘MAP’) – a private mentoring project author Steve McKnight ran for a small group of investors which began in August 2003 and finished a year later.Coming from a diverse background with varying degrees of experience, the MAP participants (‘MAPPERS’) were put through an intensive training regimen with the goal of acquiring a (gross) million dollar property portfolio in 12 months. Not just any property would do though – it had to be purchased according to a plan for it to make money immediately.
So, apologies if my first answer didn’t seem comprehensive, but I thought a it was a straightforward question and a straightforward answer.
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
Sonja,
It’s my pleasure.
Thanks for your support and feedback. It’s nice to see that the effort contributed is appreciated.
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
The title of the book gives context…
$1,000,000
in property
in one yearRegards,
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,
You are correct that the gross would be higher than the net.
Nevertheless, gross was chosen as a more accurate basis for comparison given that using net would have meant employing more budgets for forward estimates.
As mentioned at the book launch, my estimation of net cashflow would be somewhere b/w $450k and $550k per annum. Such a figure was never measured though.
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,
Let’s be careful that the discussion does not go ‘off topic’, and that we stick to investment rather than political statements (however relevant they may seem).
The point I was trying to make is that while the effect can be debated, the uncertainty of higher oil prices and the instability of long-term trade deficits represents a significant shift in market conditions.
This reaction will lead to another action, and should this ultimately result in a momentum shift, then the consequences for those who failed to at least consider (and hopefully prepare) for a downturn will be more dramatic than those who did.
It’s better to plan for such things (just in case) than to be caught unawares.
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
The great Gatsby…
You crack me up! [
]Blessings brother,
– Steve
**********
The day is what you make of it! Now go lift weights [wink4]
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
Shucks… thanks for the praise.
Jo – the $400 p/month was only while Dave and I were accumulating capital to invest when we got started.
Now days Jules is supported from our investment income as a full-time mum. It was a case of delayed gratification.
As for book royalties – these are donated to our foundation. But I do all right these days, so thanks for your concern [happy]
Cheers,
Steve McKnight
P.S. The Mazda is unleaded [wink4]
**********
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,
Yep – this has been discussed in some detail at various times.
I guess Rick and I discuss the same issue from different perspectives. Ultimately you need to weigh up which you prefer for the asking price.
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,
Thanks for your feedback and I’m delighted you enjoyed the book.
A couple of points:
1. The cashflow figures are ‘gross’, meaning before expenses such as those you listed.
2. The cashflow is only from property remaining at the end of the MAP. Cashflow (i.e. non-cap gains) from deals bought and sold in the 12 months were excluded.
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,
My point about financial burden is more of an accountability to do the most with it that I can rather than squander it.
Good passages (Matthew 6:19-24):
19″Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. 20But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. 21For where your treasure is, there your heart will be also.
22″The eye is the lamp of the body. If your eyes are good, your whole body will be full of light. 23But if your eyes are bad, your whole body will be full of darkness. If then the light within you is darkness, how great is that darkness!
24″No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.
The burden I talk of is to remain wealthy and humble before God, at the same time as being accountable for the blessings he has provided (i.e. parable of the talents).
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,
I tired to go milk-free after a Tony Robbins event some years ago and found that it has a good impact on my health.
Later I did more research and was shocked at what I found. Check this out as a start: http://www.rense.com/general26/milk.htm
But… at the end of the day I thought I can always go back to drinking cows milk, so let’s see what happens if I give it a rest.
Cheers,
– Steve
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,
Pleased you enjoyed the book and thanks for your post.
Re: the 2.25% figure used.. it’s just a reference point as such, taking into account the overall fee and dividing it by the total sales price. Naturally, some commissions will be higher and lower.
Perhaps just remember that commissions are negotiable [wink4]
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 Darren,
Glad you enjoyed the book [evo]
Can you pls give me a page ref re: Robbo?
Ta,
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’ll get Brent to look into it and get in touch with you asap.
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 B.C.,
Thanks for your feedback and I’m delighted that you’re enjoying the book thus far [biggrin].
In respect to depreciation… I see it as a kind of (but not exactly the same as an) ‘interest free’ loan.
Put another way, it’s like gravy on top in that it’s great to have but the meat (or tofu for us vegies) and potatoes of the investment is fine without it too.
Specifically then, I crunch my numbers when doing my due diligence without relying on depreciation to ensure the property is +ve cashflow in its own right, and then later, if depreciation is claimable, I take advantage under the knowledge that it is a timing rather than permanent tax benefit.
I have heard that some people don’t claim depreciation despite being entitled to it (so they don’t have to repay it later). This seems a little silly to me as I’d rather have the dollar now to invest with, earn a return and then repay the principal later than the option of going without.
Hope this helps… pls make a post when you’ve finished the book and tell me how you think it finishes up.
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
]
