Hi Leigh,

We did just what you mention here on the basis of telling our financier what we were planning to do and them agreeing before the project commenced.

We received 80% of the purchase price + 80% of our renovation costs.

Bye,

Steve McKnight

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Hi,

There are two focuses you can have in property.

1. On the Property

This means you focus on the property, usually seeking capital gains returns. As such, position becomes very important.

Things that will increase the value are variables that add to perceived or actual value which cause demand > supply.

In the house vs. unit debate – everything being equal I’d buy a house because land appreciates while buildings depreciate.

2. On the Person

You are not so worried about the location of the property as you are the yield and the quality of your tenant or wrap/lease-option client.

It’s not just a matter of where to invest… you also need to clarify what you’re investing in too.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

My experience is the same as Nicks, which is not to say it can’t be done, just that it might be difficult.

Worst case scenario is to buy, wait six months and then refinance.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Selling it to yourself, living in it for one year and then selling it again sounds a lot like a scheme to avoid tax and you would likely fall foul of the taxmans green audit pen IF you were caught.

The way around this is to mount a reasonable argument for why you had to move into the property and then why you decided to sell after a year. If you could do this then you might get away with it.

The other option, which avoids CGT, is to just access your equity by refinancing your loan. The downside of this is that you have more debt (higher risk) and have to pay interest.

Finally, remember that there is a CGT discount of 50% provided the end taxpayer is an individual. I think that if you make money you should expect to pay tax – just so long as it is as low as possible.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi EmmaB

Welcome to the forum. Thanks for your post and I wish you well with your searching.

As far as a glossary goes, try this one:

http://www.ljhooker.com.au/buy/buy_one.php?list=gloss

Bye,

Steve McKnight

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Terry –

Yes please! I’d love to know how it all works out. This is an excellent ‘case in progress’.

Bye,

Steve McKnight

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Hi,

There is some pre-reading to complete which Brent should have notified you of.

If you haven’t received it then please contact him at: [email protected]

Beyond that… I think what AD has said about having an open mind is all that’s required. The notes provided are quite detailed.

Cheers,

Steve McKnight

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Hi,

What’s the secret?

There are two reasons why I run seminars.

1. I don’t have a job as such, however I still need to generate capital to continue my investing to achieve my goals.

2. I actually enjoy sharing with others and have an interest in trying to help them on their own journey to financial independence.

I’m not a charity. What I know has cost hundreds of thousands of dollars to learn. I’ll not cast my pearls to swine (that’s a biblical reference, not a slur on any member), which is why I put a fair price on attending my seminars.

I’m all about education and completing a property due diligence before doing anything.

The bottom line is this… if you want what I know then you’re going to have to pay for it. You’ll either pay me and leverage off my mistakes and knowledge.

Or you’ll do it alone and pay for it indirectly by making your own mistakes.

The choice is yours. I offer a ‘take it or leave it’ service – there is no obligation to buy… yet I will point out that this website resource is 100% funded by the profits it generates.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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Enough!

I’ll not let one person with a chip on his shoulder cause the integrity of this forum to be questioned.

AD is right, if by my actions history deemes me a fraud then let it be so. But until then, let’s ALL focus on helping other people achieve their goals with helpful posts.

Steve McKnight

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Hi,

Apologies for not responding sooner but I am on a deadline for the book.

Paul277, to answer your post directly as requested…

The point where I get confused is where you write:

quote:

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Now if i have a budget of say $200 per week that means most houses are going to be worth between 170k and 200k

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At this amount the property would not be cashflow positive since rent would maybe only just cover interest. As such I would not buy the property.

The properties I focus on are generally cheaper in regional areas. When I began investing, what I found was that the property where I rented cost us $200 p/w in rent and was worth approx $270k, yet in Ballarat, I could buy a house where the market (not inflated) rent was $120 per week for just $44,000.

Because my focus was yield rather than capital gains I decided to invest in Ballarat rather than Melbourne.

quote:

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now for it to be cash positive to recieve $200 rental per week you would have had to purchase the property for 100k.

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Yes, this is right in theory when you apply the 11 sec solution. Just be careful though… as property becomes more expensive, borrowing more money might cause the property to be -ve cashflow. It’s important to do your due diligence.

quote:

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Surely a renter will be ably to see the difference between a property worth 100k and 200k.

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I agree with you. However, the difference is in the market where the properties are. A $100 p/w property in a market where rents are normally $200 p/w/ might mean that the dwelling is of lower quality.

On the other hand, a property rented at $200 p/w in a market where the rents are $100 p/w suggests that it would be of superior quality.

In the end, the point of the matter comes down to what market are you investing in.

The REIA has data for median rentals for houses and units in most markets.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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