Hi Bob,

Thanks for your post.

You ask:

quote:

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Does Aust have this type of encumbrance on a property and where would I start to look for these properties in WA

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No, tax liens do not exist as such in Australia. The circumstance giving rise to the lien (ie: default on paying rates etc.) certainly does happen from time to tim, but the recovery process is different.

For example, most councils recover rates by getting the sheriff to take other take other property and if worst comes to worse then it is usually sold at auction.

I have not heard or seen of a position where you can pay out the debt and take a claim to the property.

One avenue you may like to follow though to get a ‘heads up’ on foreclosure property is to ring up your Sheriff’s office and ask them how they advertise ceased property auctions.

In Vic. it is in the Saturday Age. I’m not sure what the protocol for WA is.

Be sure you understand the process thoroughly though b4 buying anything. In Vic. you buy the property with the attached debt and the first thing you have to do is pay it out.

Good luck,

Steve McKnight

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

One of the advantages of lease-options is that because you are just setting up a normal residential lease, it is much easier to get finance as banks assess the loan under normal lending criteria.

So, you’re right!

Bye

Steve McKnight

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Tails277,

OK. You’ve had your say, unsubstantiated and without basis as it is.

My opinion is that it is much easier to be Chicken Little than it is to be Nostradamus.

Please honour your word and don’t come back.

Regards,

Steve McKnight

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Please read the forum rules that you agreed to before posting!

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Anything worth doing is worth doing well!

50 properties sounds like a lot until you get there!

If you can develop a system rather than a deal-by-deal focus you will find that it becomes a replicable process and as such your results will accelerate.

This will be wise words to people with a system, and cryptic nonsense to those without.

It’s difficult to describe the view from the top of the mountain if you have never climbed before.

Bye

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

My immediate reaction to Leigh’s question was that it was a bad idea.

The only way that I would consider doing something like this is in the full daylight of complete disclosure to the bank.

It’s a tricky issue. But I think there is a difference between answering questions and deliberately creating a situation with no other intention other than to gain a financial advantage.

As for would a bank go for it? The valuer having already provided opinion might not count for much as in my experience banks take the lower of valuation and purchase price. Still, it’s worth a try []

I think the idea of rebating closing costs sounds promising, so long as it was included in the contract.

The bottom line is that sales incentives can be created, but if you are doing it to deceive (as opposed to fully disclosing) then you are in dangerous territory.

Bye

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

This sounds promising to me. Remember that good tenants exist everywhere.

Population growth is certainly a factor that I watch closely, however it pertains more to capital growth than it does to cashflow returns.

I’d like to know the rent before commenting further.

Bye

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

I noticed that PropertyValue have recently taken down some of the median house price data that was previously a part of their free postcode profile report.

Luckily, the information that is missing can be found via the free sample report at:

http://www.homepriceguide.com.au

Cheers,

Steve McKnight

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Hi Tails277,

Thanks for contributing your opinion. And thank you Matt for your contribution too.

Please don’t lose site about the nature of this post. Tails277 has a valid criticism of my lack of years experience and it is expressed fairly.

It’s healthy to question whether or not an investing technique is appropriate, and if my approach is flawed then lets flesh out possible causes for its downfall.

The property market has certainly seen significant capital growth since I began investing in 1999.

However it’s important to remember that I invest for cashflow and not capital gains.

Given the 30 year average interest rate is above 10%, it is not unreasonable to expect interest rates to rise soon. Maybe not tomorrow or even this year… but I don’t expect interest rates to remain where they are now in 2010!

That’s why it’s not just important to invest, but to also adopt a a risk minimisation strategy for rising interst rates.

For me, I reinvest a large percent of our +ve cashflow to reducing debt. This has two effects:

1. As debt falls, positive cashflow increases; and
2. As debt falls, impacts of higher interest rates diminish.

I believe you are right to suggest that the good times won’t last.

However I feel that the people who stand to lose the most are those who have maxed out buying a home or highly leveraged property.

As for experience, yep, I guess four years is not forty years. And 7% interest is not 18% interest.

All we can do is wait and see whether the Steve McKnight way stands the test of time. I’m confident it will.

Regards,

Steve McKnight

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Hi,

I am putting the finishing touches to a product that will answer your questions in this area.

I expect that it will be ready in March.

Bye

Steve McKnight

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Remember that success comes from doing things differently.
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