Hi,

On the topic of valuations…

At one point Dave and I had purchased about six houses in close proximity of each other.

When we bought another one we asked the financier for a copy of how the valuation report, which just happened to list, under the heading of recent sales, the six other properties we’d just bought!

Overall, it’s wise to remember that a valuation report is just someone’s best guess, and that ultimately it is the market who decides what a house is worth. That’s why it’s wise to pay attention to market forces that impact sentiment as well as general affordability.

Regards,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

The message I believe Peter is trying to give, and it is one that I agree with, is to make good use of r/e equity to maximise profitability.

It’s the principle of ‘velocity of money’, in that you want to increase the compounding effect of your returns to maximise wealth creation.

In your example, provided your COCR is more than the cost of finance then you will be better off as you essentialy get ‘money for nothing’ as far as a cost of funds perspective goes.

Of course, there is always the risk of financial loss. Specifically, in respect to listed property trusts, just make sure that the returns are not annualised or averaged across 5 or 10 years. Like everything, you need to live through the bad years to profit from the good ones.

A point you don’t seem to have considered in your scenario analysis is the effort to payback ratio. For example, the listed property trust option is a lot less effort than a subdivision, although each have different risks.

Ultimately, you need to make your own investment decision for your situation that reflects your skill and risk profile.

Regards,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

I try to read my bible regularly, and a passage I came across today was:

I don’t profess to be in the same ‘wealth tier’ as Peter, however from my perspective, and increasingly more so, I sense the extra burden of being financially well off.

Perhaps surprisingly, I only reached this insight recently and after I have enjoyed some degree of success.

From a personal perspective, and being a Christian, I believe there is enough scripture to emphasise the importance of using the wealth one is blessed with an eternal perspective in mind.

It’s no sin to be wealthy, but the use of that wealth can be dangerous to the soul. Some insight can be found in many places in Matthew. A passage I try to follwo is Tim 6:17

One final thing that one of the Mappers said to me which I really like

Just adding my 2 cents about my personal situation.

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

Thanks for your comments about the book and I’m pleased you are liking it so far.

You are right about comfort zones – but don’t think I am immune from the lapsing of drive from time to time.

Still, what I find keeps me going is outlined in the upcoming chapters, namely a passion and a purpose.

Practically though, having Dave around to keep me accountable is very useful from a business sense, and Julie keeps me aware of when my work:home balance is out of wack.

Overall though, I think Tiffany (one of the Mappers) said it best with the following comment…

Let me know your thoughts as you keep reading though [biggrin]

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

While I’m no legal expert… solicitors for all parties would meet in a room and shuffle paper.

I’d imagine that your purchase is settled first (i.e. necessary docs executed), and then once this happens then the legals over your sale are handled.

Really though, it’s just a matter of due process that is all handled by your legal eagle(s).

Regards,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi Brenda,

Great achievements don’t come by accident. Well done on your vision and follow through!

Next, if you so choose, it will be time to transform the act of investing into the business of investing and this comes from further leveraging time and money.

Congrats.

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

Interesting plan, but remember that stamp duty and other costs (such as legals etc.) may cancel out some of your projected gains. As such, be sure to do your sums carefully.

Furthermore, it would be wise to include the -ve cashflow (if any) associated with you living in the property for six months when weighing up the cost:benefit. My gut feeling is that the savings will be negligable overall on a net basis.

Re: what Simon says… I imagine you will only have one name on title per property and a gentlemen’s agreement of some sort. I’m not sure this is the best way to begin a sustainable business relationship.

Finally, there are some moral issues about whether what you are doing is in the spirit of the legislation. In short – yes, you may be able to make money, but at what cost to your integrity? You may find there are better ways to make more money for less effort.

Oh – here’s the link about Vic stamp duty exemptions.

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

Just back after some extended time away writing book #2.

Trusted… hmmm… trust needs to be earned on a person by person basis. Still, in my case, I’d say it has been as his Bob Allen’s investing strategies have made me a lot of money. His marketing techniques may seem strange to Australians, but that is because he applied a US based approach to our market only to find that it didn’t work as expected.

I thought much of what was written about him came from ignorance in an attempt to gain publicity rather than objective analysis.

Some – but the biggest leanring for me came from looking at the business side to investing rather than treating it as a gathering of random assets. To understand this you need to draw a distinction b/w an investing business and the business of investing. Having an investing business means automated as much as possible, and Bob Allen’s info helped me to understand and then profit from his information.

In respect to his r/e stuff, many of his books contain good ideas which I’ve absorbed or tailored into my own approach with good results.

Overall – credit where credit is due.

Bye,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

Hmmm – sometimes I feel that the forum goes haywire and that’s when I retreat for a while. Then I regain enthusiasm and return full of beans.

The moderators do an exceptional job and I am in their debt for their time and willingness. Sure – things could always be better, but in this case the harvest is plentiful but the labourers are few.

Regards,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

Credit where credit is due… Kiyosaki’s book turned the lights on for me and although simplistic in places – it’s that easy to read or perhaps commonsense tone that makes the book stand out.

These days it’s about $20 or so bucks, and at that price it would be very hard to go wrong!

Finally, you can read a large discussion about books by clicking this link.

Regards,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********