Forum Replies Created
Hi,
The range that we have seen is low of 5% (Vic) – to a high of 10% (Tas).
Add to this any fees such as letting, statement, inspection, tribunal appearance etc.
The wide range makes it critical that you complete a due diligence prior to buying so you can quantify the likely cost.
Of course, you can save this cost by self-managing… but what you save in $$$ you might pay in hours and worry.
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,
Positive cashflow most often exists when you solve problems.
You certainly seem to have found a problem, but I’m always cautious when there are structural problems since these can be very expesnive to fix.
The way forward has to be to have a builder do a thorough inspection and provide a written quote for the repairs. You can then use this as a point of leverage to negotiate the price lower.
I’d also definitely get some legal advice about the body corporate issue. The last thing you want is to buy into a war. A good question to ask is ‘why is the vendor selling’?
Finally, be sure that any legal action vests with the owner of the time and does not transfer with title.
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,
If you buy land then you’re probably investing for capital gains as, other than adjistment, there is probably low or now income available.
As such, it’s critical that you manage your cashflow (budgets etc.) or else you risk having a giant cashflow leech attached to your hip pocket.
The key to any property capital gains focused asset is limited supply. For example, a vacant block in inner city holds more appeal than a vacant block in say Berwick. However, the price is adjusted accordingly.
A house will at least provide an income…
I guess my bias in this question is that when I was a kid my Dad owned a block of land in Narre Warren. Every two weeks he had to go out there to mow and cut back the blackberries.
When he sold he made a nominal amount of money, but nothing mindblowing.
Perhaps the leasson to learn here is that you need a plan first, and then let the strategy appropriate to achieving that plan dictate what property you buy.
Oh, and just a few more things:
1. Banks lend less for vacant land
2. You might want to consider a JV with a developer as part of an exit startegy
3. What is the likely COCR for the house?
4. What has been the trend for unimproved land values in the area where you are thinking of buying?
5. In both options, what is your worst case scenario exit startegy?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 strongly disagree with this ‘lowball’ comparision. I use it as a filtering tool, not as an offer tool.
When writing offers you need to work towards a win-win outcome. As such, lowballing, which is usually a win (investor)- lose (vendor) outcome is totally different to the 11 second solution.
Now, as for the claim about small towns… this is more accurate. But when you invest for cashflow, location is secondary to potential income yield and quality of tenant.
We all need to be mindful (me included) that we don’t let prejudice or bias get in the way of spotting a good 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
Hi,
Just a heads up… PF seminars has been a topic discussed in reasonable length over the past six months.
If you do a search for ‘Flanagan’ in ‘The Treasure Chest’ then you should be able to find a range of opinions.
For what it’s worth – I thought that Peter’s intro seminar was well worth the time cost of attending (it was $$ free).
However, I wasn’t interested in his bigger seminar, so I can’t comment about that.
If you go I’d be interested in your thoughts.
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
Pinky,
This a perfect opportunity for me to react to your aggressive attitude with cheap point scoring so instead I’m going to do something different… I’m going to try and help you.
Based on this and other posts you seem to have some serious limiting beliefs, including making the conclusion that the strategy I use only worked 3 years ago. I have trouble reconciling this as I continue to buy properties on the same basis, and I know many others are too.
What you seem to be indicating is that you can’t replicate it. I have addressed this exact issue in a recent post (I can’t do it therefore…).
Indeed, I’ve purchased about 60 properties in the last four months that are all consistent with the approach put forward in the book.
You see, investing in the way that I put forward isn’t easy and I can understand that people would give up when finding deals is becoming harder and harder.
Still, I’d urge you to remember the opportunity comes by solving problems, not buying solutions.
Furthermore, if I couldn’t make money using my strategy in property then I’d look elsewhere.
Pinky, if only you could turn your passion into property rather than making a campaign against a resource and people that exist to help you – not shout you down. I have no doubt you’d be an outstanding success.
Now, as for the $990 price tag. I’m certain that the people attending will receive far more value for money as I share exactly what I’m doing right now to maximise my cashflow while also minimising my liability.
Attendees have the option of judging the value of the information for themselves as they can stay until morning tea, then, if they want to leave, enjoy a 100% refund.
Sounds fair to me – and I’d only offer what I thought was fair.
In fact, I’m pretty resolved on this. I’ve spent tens of thousands of dollars on my education – in seminars and financial mistakes. I wish I could have attended my seminar back in 1999… I would have paid much, much more.
Still, there is an element of risk in paying $990 for a seminar. I can’t eliminate this, all I can do is reassure you that the feedback from prior events has been outstandingly positive.
However, you seem to struggle with it again because of some (limiting) belief where you want or need justification.
Now, as for changing your details. The software will not allow this and for you to continue as a member. To that extent, I can remove you from the database, but your posts, stars etc. remain. It’s your call, what do you want me to do?
As for people staying or leaving… that’s up to the individual. If they want help then this forum, website, products and seminars are a resource to draw upon.
If not, then so be it.
If this was your last post then I wish you every success with your investing future.
Upwards and onwards for us all.
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 again,
Well, for what it is worth, the change was made at 5:30pm on Friday – so you are in fact right, we did keep it open until close of business Friday (end of the quarter).
I’m sorry you feel that way, but in my eyes, unless I had of kept to my word (to end the earlybird offer within the reasonable time frame mentioned) then my integrity could reasonably be called into question.
At the end of the day, I’m just honouring what I said I’d do and if you feel that’s too harsh then I guess we’ll just have to agree to disagree.
There are lots of other seminars to choose from where promises mean nothing – mine is not one of them.
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 Muppet,
Thanks for your comments.
Yes – it’s been high time that the forums were tightened up.
I had been holding off until the new forums went live, but sadly this has been quite a saga that might still be a month + away.
While I don’t always have the time to post, I’m here many times a day reading and moderating behind the scenes.
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,
Yes – commercial properties are normally a lot more cash intensive because bank’s will lend on a lower LVR to residential deals.
A possible way around this is:
1. Commercial property is more of a ‘no rules’ environment where the creative can truly go crazy. Vendor finance, 2nd mortgages, delayed settlement terms, kickbacks (er. incentives) that are properly disclosed etc. are quite common. This means that the lower LVR is not so much of a problem if you can negotiate creative terms. Of course, this isn’t something that can be done 100% of the time… you need to pick and choose your deals.
2. I tend to do IO loans on commercial properties as term loan term is usually a max of 10 years. If you did P&I then you’d probably blow yourself out of the water as your repayments > income.
To reduce risk what I do is to take a portion of each rent receipt and put it in a mortgage offset account. This means that even though I don’t make principal repayments, I’m still allocating reserves to pay off debt.
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,
Well said.
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,
Thanks for your honest and direct thoughts.
I agree that it can be confusing… but at the end of the day I always come back to this:
PropertyInvesting.com was created for people to share information that assists is more accurate and profitable property investing.
In short – it’s a tool to help people with questions.
We welcome a diverse range of opinions and thoughts, however I for one am (was?) becoming worried that posts were becoming more aggressive and far less constructive in the criticism.
Yes, it’s your right to be negative, but it’s our right to protect the integrity of the forum and take action to ‘keep people on track’ in terms of gently guiding discussion back to investing matters in such a way that we can all learn.
Certainly, I’ve received a lot of feedback from veteran members that they shared my concerns and want to see a return to prior days of helpful guidance upon which the success of this forum is based.
If you’re having a bad day then do the best you can to get through it, but don’t take it out on the forum.
Once again, remember that this is an investing forum and not a public slanging arena.
I’ll jealously protect what many have worked hard to build here by adopting fair but firm moderation when needed.
And the bottom line is those that don’t like it… tough.
Have a lovely day.
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 Arty,
It’s important to remember that this is a moderated forum.
To keep order and respect in these forums I’ve asked several senior and respected community members to join with me to moderate the posts and where necessary edit, lock or delete any contribution that is not in line with our rules, or, where it is deemed not to be helpful to the spirit of the community.
This is certainly not to say that we are seeking to control what is said… diverse opinions are fine and indeed welcome, but just not to the extent that they become irrelevant or degrade others.
‘The Soap Box’ has been created for people to voice general opinions. Yet again, all posts will be read and where needed moderated to ensure they comply with our rules.
We do this to protect the integrity of the site and to ensure it is used for the purposes intended in its creation – to serve as a source of useful pro-active information.
Regards,
Steve McKnight
P.S. Re: the post you mentioned, it has been unlocked since being transferred from the General Area.
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
lol
No house hunting until after exames… what a classic [
]!People with the existing product will still be able to print off the templates – people with the new product will have to photocopy them.
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,
When I made the offer it was my intention to end the offer first thing Friday morning.
To this extent the wording was clear… the earlybird offer was available for those ordering up until midnight on the 2nd, but we would have held this open until start of work Friday.
Unfortunately, with time pressures and a hard disk failure, we only got around to changing it on late on Friday afternoon, so some gained an extra bonus.
Sorry if you were caught up in any confusion.
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 Muppet,
Let’s leave it in the general area for the time being. When I transfer the forums to the new site I’ll add more categories.
Just want to tidy all this up – it’s getting a little out of hand.
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,
Thanks for your post – it would be good if more people could post the numbers on potential deals so we can analyse them and learn.
I’d add the following comments:
1. Just because the property is currently rnted does npot mean that it is rented to a good tenant. It’s important that you seek independent confirmation that the tenant is indeed a future (rather than a historical) long-term tenant by looking at how much of the lease is left to go, rather than how much of the lease has expired.
Simply ask to see the lease and also ask the tenant how long they intend to stay in the property.
2. It’s not what you can see that will hurt you the most. You have done a good job of checking out the numbers, but the gaps are that you need to be more specific rather than just have a $4k budget.
The two points raised re: vacancy and also mngt fees are well made and will decrease your cocr.
However, what I’d also like to see you do is ensure that the $200 p/week is a fair market rent (ie. not inflated). You can do this by seeing what the other apartments rent for or by calling local agents and asking them.
3. Finance… it might be wise to make your offer ‘subject to finance’ just in case the bank will lend you <80%.
4. Think about your exit strategy too. At what point (c/flow and cap. gains) will you sell? Furthermore, also have a plan for how you’ll use the weekly cashflow.
OK – that should keep you going for a while.
Generally, the deal looks interesting and deserves more attention.
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,
Let’s move back to Apr 1999 and I put a post on creonline.com about the 11 sec. rule.
A received a host of replies telling me it was a aste of time.
Good thing I didn’t listen to them… who knows where I’ll be now.
11 sec solution deals do exist… we bought one in Ballarat just last week. The problem is that people let their bias and ignorance get in the way of seeking out problems.
Sure, 11 sec pretty houses aren’t falling off trees like ripe apples, but great deals exist in every market.
Of more importance is having an investing plan and regularly looking for deals in a variety using a variety of tactics, including pounding the pavements yourself.
As for small towns… rememeber, it’s about cashflow first and capital gains second. Good tenants live everywhere.
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 recommend you do bi-annual property inspections to ensure your property is functioning as expected.
Here’s a thought… even if you self manage, perhaps you could pay a local rental manager a once off fee to complete a condition report for you or to report back with any problems.
Remember that time is precious – and if you pat $150 to save 3 hrs of travel + the time on the ground doing the inspection… it sounds like value to me.
On that note, it would pay to actually go to the area at least once a year to get a feel for any changes to the community/area in terms of price, infrastructure etc.
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,
Presumably we are talking about Henry Kaye here?
I noticed that he is featured in a front page story about the ACCC and ASIC doing investigations.
You know, a lot can (and has) been said about Henry Kaye. But I think it is a very long shot to suggest that he is responsible for the property bubble (as put forward in The Age).
Remember that all Kaye is doing is selling his system for investing. I don’t know whether it works or not – that is a question for the individual investor to consider.
From personal experience though, I think that he hard sold the notion of positive gearing when in fact the properties were badly negatively geared. Still, five minutes of financial due diligence would have brought that glaring problem to the surface.
Interesting quote from H. Kaye though:
quote:
I believe in karma. Everything that happens to me in a negative way I believe is deserved.”Let’s see what happens and how much of it is deserved… one thing is for certain… a trial by media is anything but fair or appropriate.
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 Doug,
Thanks for your post.
quote:
1) Is the Deposit that is used to purchase an Investment Property tax deductible?No – it forms part of the cost of your property.
quote:
2) Is the amount of cahflow received that goes into paying off the loan on an IP also tax-deductible, or is it purely the amount that is used to pay off the interest rate component?Your cashflow will have a portion of capital (ie. loan repayment, capital repairs) and a portion of income (profit). Only the income portion is taxable – the capital portion is adjusted in terms of any capital gains tax when you sell.
This is a little complicated… perhaps a 1/2 hr chat with any properly qualified tax adviser would be very helpful and worth the $100 or so dollars.
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
]!
