Forum Replies Created
Hi,
I think that Wright Books put out a book about buying commercial property recently. I heard it was quite good too.
After some research at Wright Books…
quote:
How Investing in Commercial Property Really Works
By Martin Roth
0 701638087 Price: $34.95Studies have also shown that commercial property investments often perform well when other asset classes are weak. Well, the stock market is at a four year low, there are fears that residential property prices may have peaked, and with a range of new investment opportunities, the spotlight has moved onto the numerous benefits of commercial property. These attractions include high yields – generally far higher than for residential property or the stock market, security of income, tax benefits and the chance of capital gain.
Best-selling finance journalist and author of Top Stocks 2003, Martin Roth has exhaustively researched this area of investment and his findings are written up in this comprehensive new book.
As for my tips… commercial is all about yield in comparison to tenant risk. A 10% return isn’t that hard, but you want to make sure you get a quality long-term tenant as commercial is usually harder to relet.
Watch out for GST too… it is applicable to commercial but not (as a rule) residential.
Perhaps I’ll try to cover this in an upcoming newsletter.
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 started with an economic profile that was prepared by the local council.
There should be stats available – but you may have to pay for them. See the links area on this site for some useful information, and I think http://www.propertyvalue.com.au/ might be of some help too.
As for tenant turnover etc. ABS data is likely to be too generic, but the REIV / REIA may be able to help.
You are going to need to throw some time at this to get the outcome you want.
Finally, watch out for rural areas… be sure to have a plan and a purpose to your investing rather than being caught up in a mad +ve gearing panic resulting from the book and recent boom.
Investing fundamentals rather than hype must always shine through.
Good luck,
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 Pin,
No – I don’t want to open it as:
1. I want to show respect for Richmond’s decision to lock it; and
2. It contained discussion which is now redundant.Still, your and Mini’s discussion remains relevant and as such, I have copied and pasted her post below for you to reply to (I hope this is adequate):
quote:
hey pin,
in reply to –
“Also the thing with +ve geared properties they ONLY put something like $1,000. PER ANNUM in your pocket. (i.e. peanuts.) WHY?? because this is eaten up so fast by EXTRA expenses that you forgot to put into the equation.”I agree you probably shouldn’t just rush out and buy property if you ‘forgot’ about strata fees, property management fees, mortgage application costs, mortgage insurance, loan repayments, closing costs, maintenance costs, insurance, rates, vacancy rates, letting fees, or any other expense to do with buying or owning a property. All that calculation stuff is the kind of thing I learned at the seminar I went to with Steve,
(I actually went twice just to cement some stuff!) along with the ability to work out what that all means in terms of the bottom line.Yes, the yearly surplus might not be large if you are (like me) buying ‘baby-deal’ properties around the 30K mark which rent for 115 per week. but the important thing is that there IS a surplus. And the yearly surplus is the bit that makes me feel secure that i won’t have to put any money into that house – I have a buffer. it’s also the thing that means that i can start looking for another property straight away ….and then keep on going. As the years go by the repayments seem less in relation to the rent – which goes up each year. The property manager should ensure that you have regular rent -increases which at least are in line with inflation.
After analysing a good many deals this year, three of which i bought, I’m at the point where i’m pretty bloody confident that I know what I’m doing numbers-wise (PS – I had to be – my Dad is an accountant and initially was not convinced…until i showed him the numbers!!!) – and I’ve built enough buffer into my calculations to allow for rising interest rates – which also means I’m going to keep my borrowing to a point where I am comfortable. This means I will keep more equity in the deal than a lot of people would. I am happy to go a bit slower in order to be a bit safer. but that’s just me. Also I am freelance so the ‘not digging in to earned income’ thing is quite important to me.
So I agree that the numbers aren’t big on the small deals but like when you play Robert kiyosaki ‘cashflow’, you start with a bunch of small deals that increase your cashflow, and over time, you can ‘get there’ by just doing lots of small deals, or you can eventually move into the bigger deals. either way it has a cumulative effect and the principal of the thing means you can replicate it. with no loss of lifestyle (other than the time taken to set up the deals, which i am in no way underestimating! However now they are set up, all I do is check my bank statements!!
>For Steve this is a completely different story. He has the >money and the backing. I am thinking about your average >Mum and Dad here, who don’t know what they are getting >into to. “
Steve didn’t have the money when he started. Didn’t you read the book? Read it! You’ll never guess where they got finance when they were starting out!!! The ‘zero’ in the title of his book means none, zip, zilch. They had NO properties when they started and 130 3.5 years later. They didn’t start with any backing, other than finance.
As far as the average mum and dad, they probably spend 105 percent of what they earn. ( I read that somewhere. that’s what the average Aussie does. Scary or what?? Credit cards are a growing sector….) They probably own their own home. Negatively geared of course, because own homes always are.
You won’t see them here.
The UN-average people are the ones who learned to spend less than they earn, eliminate consumer debt, and maybe think about investing the surplus. That is SOOO not average. The average in debt to the eyeballs Aussie mum and dad take the kids on holiday if they have a bit to spare (read: room on the credit card.) That’s why only 8 percent of people that own property own an investment property. And only 6 percent of THEM own three or more. That’s 0.5 percent of property investors. Not the average mum and dad, for sure. Why can’t there be more? Because negative gearing is so prevalent.
Because most people want to invest in their own homw first, because of many emotional (amongst other) reasons. because properties that will be cashflow positive are a bit thin on the ground. because a lot of people are way out of their comfort zone buying outside where they live. because most couldn’t be bothered to learn to understand it anyway.A lot of my friends and family are impressed/bedazzled/confused/overwhelmed/challenged with what i’m doing with property. Most are interested enough to have me explain it. Some have borrowed my CD sets or bought the book. Fewer have read it. But a couple of friends
who borrowed the CD set, listened to it, made their partner listen to it, rang me up lots and asked me stuff, looked for deals, analysed them with me, and made offers have now bought cashflow positive properties….they are not average people though….cheers-
MiniBye,
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
Good call… onwards and upwards, especially seeing that Pinky did have the resolve to apologise for the benefit of all.
It takes a special person to fess up to making a mistake, and an even srtonger person to do it in a public forum area.
Bill, Pinky et. al. …keep posting please, but let’s focus on helping people with their investing. If you admire me for my approach then take a leaf out of my book and let’s move on to more productive discussions.
Thanks in advance.
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,
The good thing about the forum is you can always go back and edit or delete what you say and change the official record.
That way you can feel just like a politician and having the chance to edit what you said after saying it but before it is entered into Hansard.
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 Pinky,
Wow – that took a lot of guts! Thanks for doing this – I very much appreciate your sentiments.
Of course, I hold no grudges. But this wasn’t always the case… when I was sacked in Mackay it took a long time for my self confidence to return.
I agree with Leigh that there are no guarantees, but I would hope that your trust in me turns out to be well placed. Only time will tell though.
As for my other concerns, let me just again reiterate that all I ask of people who post on this forum is that they keep it relevant and are respectful of others.
In fact, to be honest, your posts encouraged me to split the forums so that there was an area where people could post opinions without everyone having to read it.
It’s good that we don’t agree on everything. I don’t have all (or perhaps many!) of the answers… but I like to try and help where I can.
Olive branch happily and graciously accepted.
And hey, if you’d like to come back and are happy to moderate on the basis that the rules are the rules (and you are happy to apply them without bias)… then I’d be delighted to beef up your forum rights to moderator status so you can make sure this forum area is fairly maintained.
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 Ben,
I’m not making any promises.
Let’s finish what’s been started and reassess.
Still, I can say that it will those that have attended seminars and contribute on this forum that have the best chance of being selected IF I do anything in the future.
Interesting… some people have said they’d do anything to be mentored. Anything? Well, we have said to quite a few that attending the eminar would be a great platform to launch your success and have a chance to network with our organisation.
“How much?”, they ask.
“$1,190.”
Oh, no… I don’t want to pay that.
Ah, then you won’t do anything will you?
I’m not saying that being at the seminar is the be all and end all. But, if you want to network with Dave, me and some of my closest friends and advisers (who regularly attend as my guests)… then you’ll need to come along.
I definitely subscribe to the theory that hanging around successful people rubs off. And trust me… I’ve paid a lot of money to learn and hang around successful people!
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,
Thanks for the comments of support.
Sometimes I have to shake my head in disbelief (sometimes shock) at the things people write.
I’m never disappoineted though. What people say is indicative of how people act and it’s not too hard to spot those that will be successful from those that will struggle.
But it’s all about a journey rather than an outcome.
As for this forum resource. It’s free, right? Its value is in the way we help each other!
To this extent, all I ever want is for the posts to be relevant and for there to be more helpers than those needing help.
Cheers,
Steve McKnight
P.S. I’ve missed you Leigh!
**********
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!
All excellent answers.
To be honest, at the time of writing, there was no alterior motive behind ending the book with Tenants From Hell [
] It’s just the way things ended up.However, if I can take credit retrospectively, I would have crafted it this way because people who read the book and think “Oh no, that’s too scary from me!” should be investing to start off with.
Too often these days I see people wanting a risk free no effort way of earning a profit. Such a thing is a dream – a fantasy! What’s required is massive action. I seriously don’t think that 99.9% of people understand this.
Only when you want something bad enough that you are willing to make a sacrifice does it take on an urgency needed for you to reach a point whereby you attain the drive, focus and resolve needed to:
*find deals where none seem to exist
*find finance when you are always told no
*explore new options
* etc. etc. etc.This concept is even lost with the some (perhaps many?) of the MAP people I work with. But it is early days and hopefully I’ll get the point across sooner rather than later.
Life is passing us all by and we need to do the best we can.
Thanks for having your input on this matter. I’ve enjoyed reading the answers.
Warm 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,
We are always looking for people who want to help out and act as moderators.
However, what’s required is someone who is happy to enforce the rules, even to the extent that it offends in order to keep this investing forum ticking over.
Anyone who wants to do this – please, help us out!
Drop an e-mail to Brent: [email protected]
The existing moderators do a fantastic and much appreciated job. It’s often a thankless task and sometimes you even get abused… but then every umpire imposing the rules of the game has to cope with that.
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,
In the book I mentioned that time rich but money poor people can look to do JVs and share the profits.
Or else you can sell the deal to another investor, cash up and then buy your own property next time around.
In your case, start slow. Look to buy say 2 properties per annum at the beginning while you find your feet.
Terry raises some good points, but just be sure about your risk profile before doing 90%+ LVR loans. Too many may leave you open to credit risk (ie. a rise in r/i).
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 BrettC,
Thanks for making this post.
I accept that it is getting harder to find positive cashflow properties that what it was back when I started.
But that is not to say it was easy back then either. I think people misunderstand how hard it was… they didn’t just exist on every streetcorner.
No, you had to try and find a property and work a solution so that you were comfortable with the risk.
To this extent, I think the way people are trying to find deals is leading the astray. The key is to seek problems, not solutions. By solving problems with the appropriate strategy then you stand to make money.
Furthermore, you can still stand to gain from capital appreciation too. The important thing to note is that you need to exit strategy rather than holding for the long-ter.
Finally, remember that we are at the tail end of a seller’s market. Things will change as market conditions alter from the current boom.
How to prepare for change and what to look for now and into the future are the main topics of the upcoming seminar.
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 reminds me of the old accounting joke.
There is an economist, engineer and accountant all going for a job. They are all worthy applicants.
The interviewer asks the same question of all three… “what is two plus two”.
The engineer thinks and replies “Well, the answer to 2.00000 + 2.00000 = 4.00000.”
The economist thinks and replies “Well, assuming that inflation and taxation are nil, the answer is 4.0.”
The accountant smiles, winks and says “I can make it equal whatever you want.”
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
[
]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 taking the time to write this.
It just goes to show that at least some (and perhaps most!) of the techniques that worked 3 years still work today.
Good luck with the rental.
Perhaps you can now get the word around the Cop Shop and see if some coppers want to share a property that’s local to the station too!
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,
Ah (says Steve with a wry smile)… someone in the 1% of people who will actually use the information given.
Sensational effort!
Now imagine how much other useful tips are in the book just waiting for you to road test.
Cheers,
Steve McKnight
P.S. Thanks for the feedback… it is much appreciated [8D]
**********
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 Peter,
Thanks for your post and welcome to the forum community.
Re: /2 and * 1000… this is just the equation that always results in a 10.4% return.
Re: Interest…
Purchase Price = $250,000
Loan @ 70% = $175,000.
Interest on loan @ 8% p.a. = $14,000Cheers,
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,
Just to clarify…
IMHO, being negative is being overly pessimistic without any suggestions for imporvement.
Being constructively critical is identifying problems and then offering solutions too.
I’d like for this forum to be full of posts of the latter rather then the former.
quote:
My criticism was about a book that, in my opinion, sells itself on the premise that anyone can become a millionaire, when the truth is only a small percentage will actually go on to be millionaires. It’s about making a shed-load of money based upon a situation that is unrealistic for the majority of those that buy it.You need to make your own conclusions about the book. I remain steadfast in the belief I’m just an ordinary guy who faithfully followed a system through the good and bad times.
I’m in the minority because I didn’t let people telling me that it couldn’t be done stop me from giving it a try.
And in the end, that’s made all the difference.
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,
Not that I know of… I pay my rental managers out of my cashflow profits.
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 Christopher,
Thanks for your post. I also saw your other post, but at this stage, to be fair to other similar posts that were edited, I needed to edit yours too as external advertising is not allowed.
But please don’t see this as a put-down.
In fact, I’m greatly encouraged by your post. You have a bright future ahead of you if you can overcome the doubts that will arise when you find it hard to make a start (too youg, not enough money etc.).
Anyway, I think you are on the right track re: finding deals rather than investing in deals yourself. Just start with local people you know or attend local investment seminars to start building your network.
Trading shares might be a place to start… there is a lot of informartion on this topic in your bookstore. Also visit: http://www.marketmad.com
I can’t tell you what to do, but I can say that there are no limits to iniative. Other people may box your mind – but don’t you do it.
Keep researching and make a montly action plan in the following areas:
1. Knowledge
2. Finance
3. Action
4. RelationshipsAll the best.
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
] It’s just the way things ended up.
