Hi Quasi,

Yes – congrats on your marriage… the most important partnership of all.

Some quick advice… many people work at a job, work at investing, even work at sport. Yet when it comes to marriage, people don’t think that their marriage needs the same amount of work or attention.

At the moment my wife and I are working through a couple of excellent books on marriage…

“His Needs, Her Needs”
“Fit To Be Tied”

Let me know ([email protected])if you’d like me to send them to you as a wedding present.

Cheers,

Steve McKnight

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Hi,

I don’t think that there’s a rule of thumb to apply here. Try to negotiate the best discount you can that still results in a win-win outcome.

Sorry to be vague.

Based on the deal that you mention, I think you understand that if it makes money then trying to save a few sents may cost you thousands if you miss out.

Just be careful with the rebate clause that it is properly documented in the contract.

Bye,

Steve McKnight

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Hi,

Yep – I’ll add this to the list of ‘wants’ when the site undergos it’s next upgrade – which will be in the next few months.

Bye,

Steve McKnight

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It’s nice to receive positive feedback.

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Thanks for answering this post.

Yep – what I wrote for NineMsn covers the issue nicely.

Low ball offers create a lose-lose-win outcome…

The vendor loses (low price)
The agent loses (low commission and unhappy client)
The buyer wins (low price)

If that’s the way you want to invest then fine… but good luck as if you get a deal over the line it will be through luck and you won’t be building a network of contacts.

Seek to do win-win deals and you won’t find the going as tough over the long-term.

Remember that you invest time and money when looking for deals. Money can be replaced… time can’t.

Bye,

Steve McKnight

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Hi Andy,

Yes – I do what you have suggested for finding wrap leads.

In the first instance, I run classified ads to attract leads and then once filtered I qualify them to buy property up to a pre-determined level.

quote:

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If one could make an offer on the property subject to the tenant-buyer going through with the lease option or wrap, it would remove a lot of doubt and risk as to whether one was going to have any vacancy between date of settlement and beginning of Tenant-buyer’s lease.

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Hmmm- it might be difficult to do this as (in Victoria anyway) the Sale of Land Act does not permit you selling a property before you own it.

I’m also concerned that a subject-to clause of this magnitude would be difficult to negotiate.

What I do is buy the property and try to have my buyer remain interested in the deal. The best way has been to get them to pay an pre-application fee (of say $1,000) that comes off their purchase price (or deposit) when they go through with the deal.

If they don’t then they lose the $1,000.

Other non-financial incentives such as getting them to move in asap and keeping in contact with them about the status of the purchase are important too.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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Well said Jason.

There is some thought that the way around ‘double stamp duty’ is to buy an option over the property rather than the property itself.

So, a theoretical case study might be:

Jason finds a property in the market for $100,000. Looking for a win-win outcome he creates a call option to buy the property at $110,000 with an exercise date 6 months in advance.

The real estate market is booming (or the house increases in value for some other reason) and in five and a half months time the property is now worth $130,000.

Jason’s two choices are:

1. Exercise the option and buy for $110,000, then seek financing based on $130,000. 80% lend on $110,000 ia $88,000. 80% lend on $130,000 is $104,000 – so buy doing this Jason has less cash in the deal.

2. Sell the option for between $110k and $130k and pocket the difference.

There are a few concerns I have with this though…

1. This idea a bit of a legal minefield and I don’t know that anyone has successfully navigated it yet.

2. You may need a real estate agent’s licence to profit from property when you are not the owner.

3. There is no CGT 50% discount as you have held the property <12 months… as such, a large chunk of your profit may be subject to tax.

Please note, having never completed a flip… all I can offer is theory.

Bye,

Steve McKnight

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Hi,

Let me point out that this is not a ‘wild west’ forum. It is a moderated forum.

As such, ANY post by ANY member that is deemed to be in voliation (in the moderator’s opinion) of the forum rules will be either edited or removed.

So, Paul (or Tails, or whoever) when you make a post that is defamatory then it will be deleted. If you persist with doing this then, just like last time, you will be banned from making any contribution.

However, unlike last time, should you be banned again, then it will be permanently.

No one objects to an alternative viewpoint that is expressed respectfully.

Regards,

Steve McKnight

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Hi,

Let me say a couple of things…

1. I’m more than prepared for you to have your say, BUT, it must be said in a respectful manner and when you make a statement I think it’s reasonable for you to substantiate it with evidence. If not, then you leave no option but to edit or delete your post as per the terms and conditions outlined when you signed on.

2. The book does contain information on wraps, but it is not a wrap book. It is a book about property investing in general.

Regards,

Steve McKnight

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