Yep,

I understand… it is a little confusing.

The new forum will be released soon and the categories will be more obvious.

For the time being… general property questions here… specific requests for help about situations in property plus.

Cheers,

Steve McKnight

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Hi,

Seems unnecessary IMHO. Surely the same affect could have been gained from more subtle means.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Phil,

Welcome to the forum! I’m pleased you enjoyed the book and hope that you can gain some benefit from it by turning theory into action.

quote:

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I own a property in Tassy – current value (valued 3 months ago) = $175,000. Mortgage owed = $102,000. My parents live there and pay $400 a month, and I pay another $400 a month off the mortgage, meaning $800 a month off the mortgage (mortgage = principal & interest, paid into off-set account). This has meant we’re pulling ahead as the payment should be around $730 per month (rate = 6.77%).

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Yep – but the property is negatively geared which means that you are dependant on capital gains. If this is your strategy then great… most people don’t have a strategy other than making money and as such don’t see the risk, rewards or even assumptions of their wealth building model.

Also, by having the property rented to your parents it takes on a non-financial (ie. family) feel which can sometimes cloud objective investing.

As for advice – I’d clear the debt with Dad and enter into a lease-option with them to purchase the property. They will have the status of tenants with an option to purchase once their Visas come in.

That way you turn negative cashflow into positive cashflow. Make the option fee $40,000 (ie. the money you owe your Dad) and then use the $14k to get started on +ve cashflow property (or pay down debt on the Tassie property to keep it +ve cashflow).

Well, that’s one option…

quote:

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Our goal is to become financial independent, own 100 properties with passive income of $150,000pa in 6 years time, and not have the 9 to 5 (more like 8 to 6) grunge. Thanks for your patience!

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This being the case you need to sort out the issues before you first to maximise your investing foundation. Going forward with things as they are now will be like driving down a freeway with the handbrake on.

If you want more info on the lease-option I can probably put you in touch with someone who, for a fee, will help you with the structuring of the lease-option. Email [email protected] if you want me to do this for you (allow a few days too).

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

I moved your post to the appropriate forum.

They are either:

1. A firm of chartered accountants; or
2. A firm selling property

(different organisations – same name)

They sell property that is advertised as either negatively geared, or else positively geared after depreciation adjustments.

I’ve reviewed several of their deals and, for me, it is not the sort of propert that fits within my investing criteria (ie. simple positive cashflow).

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Microsoft Excel… spreadsheet package.

Use Mel’s advice about how to use it.

It can be a bit tricky, but persevere and see where it gets you.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Anita,

Thanks for your post and welcome to the community!

quote:

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1. In whose name did you buy the properties?

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In the name of the entity which we set up to contropl our property investments. I believe that owning assets in your own name is not the best idea as you can be sued and the lot is on the line. Instead Dave and I created a structure where we control our wealth without owning it in our own names.

In fact, to explain this concept further required me to create a product on the issue. It’s called Wealth Guardian.

quote:

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2. Did you have to get financing done for each property separately? Did you choose one bank & stick to it for all property financing? Did you have to take a bank in the same city where you bought properties or a bank in Melbourne dealt with all your financing? Could you please tell me more about this financing aspect?

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At the start we sought finance on a property by property basis. Later, we managed to obtain a block of funding. Thesedays, we’re lucky in that we have a track record and have banks that are willing to be more flexible and continue to lend, provided we continue to show good results.

We have only ever borrowed 80%, and all loans (except commercial) are on 25 year P&I terms. I think it is necessary, once you get into debt, to also have a plan to get out of debt too.

In the course of our investing we have used a multitude of lenders. I don’t discriminate… if someone wants to lend me money I’m open to the idea! []

quote:

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3. Did you take an interest only loan or principal & interest loan for properties?

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With the exception of commercial loans, where the term is usually 10 years and to do P&I would mean -ve cashflow, our loans are P&I. I wrote about this recently in a newsletter. Check the back issues.

Hope you enjoyed the book and look forward to seeing more of you on the forums.

Bye for now.

Steve McKnight

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Remember that success comes from doing things differently.
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Hi JackFr (my book buddy!),

Get friendly with a local real estate agent (they have has access to a magic database and can look up figures), or else pay for view I’m afraid.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

I’m happy to take over a property with an existing tenant, provided I have done enough checking to make sure I’m not taking over another landlord’s tenant from hell.

I’ve seen many landlords sell the property to be rid of the problem rather than trying to fix it.

One of the due diligence templates we complete is the “Property With Existing Tenant” form, which is included in the BuyerBeware product.

Look out for other things too… such as all the necessary documentation being in order and that the rent being paid has been paid and is not just the latest hike justifiying an increase in price.

It’s the things we don’t know that bring us unstuck.

Bye,

Steve McKnight

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Hi,

We have done prelim some work into setting up a charitable foundation.

The legal form/structure we delegated to our lawyer, who has reported back with a way forward.

The hard work though, is coming up with a mission statement and core set of values. In short, there is always a need, but finding your way to help is tough

My favourite Bible passage sums it up well:

quote:

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The harvest is plentiful but the workers are few.

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Matthew 9:37

Cheers,

Steve McKnight

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Hi,

For those who don’t know, debentures are debt security (ie. loans) of various time lengths issued by businesses, usually listed companies.

As the risk is higher than a bank term deposit, so too is the return offered.

Kavita’s point about looking at the independent assessed risk rating (such as S&P) is well made. No doubt there were some people who held Parmalat debentures that have just kissed their cash goodbye.

One thing to be especially mindful of is the liquidity of the investment… that is, how easily can you access your cash (sell the debenture) if you need to – and what are the costs involved.

Hope this has helped.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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