Hang on a minute… I wouldn’t go so far as to recommend home loan analyser. It is just the software that we used when we started.
We have always pointed out that the purpose of the software is NOT wrap specific, but to calculate the interest component that should be charged.
What we used was HLA to calculate the interest between two dates, and then imported that data into Excel.
This was clunky and a little time consuming, but it nevertheless gave the right outcome. But for <$70, it was an excellent way to begin.
AD has correctly identified that we now use WAMM. This is not without its limitations, and is priced much higher… but when you get over about 5 wraps the additional cost is worth the time saving IMHO.
Please do not misquote me.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Thanks for your post and welcome to the PropertyInvesting.com community.
In respect of tips for beginning I certainly want to encourage you to continue working on clearing up any past financial glitches.
The essence of successful property investing begins with successful personal finance management.
In this respect I’d spend some time analysing what went wrong and in doing so trying to identify the specific mistakes you made. Once you know this then you can avoid making the same error in the future.
I have not read either of the resources you mentiond, although I feel it is wise to read widely to educate yourself about the different investment possibilities.
It seems you have taken lease options as a chosen strategy. OK, that’s a good place to start. The next thing is you need to put a deal together. I’d imagine the product you purchased outlines this?
Mentoring? Sure… post your questions here and I’ll certainly lend my experience to your problems.
I’ll even give you some homework to begin with… I want you to find an area within an hour where you live that would provide a positive cashflow outcome.
Might I suggest that you look for properties priced $90,000 and less… and where you could seek a rent return of say $150 per week plus. This is outside the 11 Sec. solution, but it will be a good starting point for you.
Might I also suggest two more resources… if you haven’t already done so, invest the $25 odd dollars for Fast Track.
Also, check out the outline of the different investing strategies, beginning with Lease Options.
Thanks again for your post and for having the courage to make a start.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Cardinia Shire Council rates are based on the Capital Improved Value of each property.
A rate in the dollar is declared by comparing the total valuation to revenue required. Rates are then apportioned against each property on the basis of individual valuation.
The formula for calculating general rates (excluding any additional charges and arrears) is the valuation multiplied by the rate in the dollar.
For example if the Capital Improved Value of a property is $250,000 and the council rate in the dollar is set at 0.0042 cents, the rate bill would be $1050 ($250,000 x 0.0042).
Councils determine the rate in the dollar as part of their budget process.
How your rates are calculated will be set out on your rate notice.
Re: commercial lends… every lender has a different policy. For example, I’ve found the CBA policy to be the most restictive and Suncorp Metway to be about the most liberal.
You need to check it past several lenders and shop around for the best deal.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Does the non paying scenario tend to happen a lot?
Well, in my opinion if it happens once then it happens too often.
As such I take the approach that it is best to carefully pre-qualify the lead before entering into an agreement.
I wouldn’t call the process of getting a defaulter out of a property easy, still, if you can work through the issue still looking to create a win-win outcome then it can happen with a minimum of fuss.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
I don’t have much experience with getting developments financed from scratch.
However, some general advice is to approach the lender in advance and ask them what sort of information they require and then shape that into a professional submission.
Remember that a bank wants to eliminate risk, so from their perspective they will want to know what happens if you default. They wouldn’t want to be left with a partially completed site.
As such, finance for developments is usually offered on a progress payment basis depending on the % of completion, rather than 100% up front.
Accordingly, you need to specify how you require the payments and I’d imagine providing this request in some kind of budget form would be appropriate.
Remember that the best person to ask is the lender.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
I’m very pleased you enjoyed the tape… for $15 it’s a no-brainer, right?
Anyway, I thought that since you wrote such a nice comment I’d write some detailed feedback for you (even though it’s late!) []
You ask:
quote:
Do you all see merit in purchasing a property, doing the basics of rehabbing it, forcing capital growth and then drawing on the equity to fund the 20% down deposits for wraps?
The short answer is yes, I do see merit… lots of merit. However I can also see one minor ‘fly in the ointment’.
And that’s lenders in my experience usually want to wait about 6 months before doing a revaluation and then you’ll probably only get 80% of the increase at best. Then there’ll be some application fees and other costs too.
quote:
Or, is it wiser to use the smallish money put aside to fund the wraps etc fisrt off and eat up most of the money after say 3-4 wraps?
As you’d expect I also like option 2 as well []
So what I’d be asking is: How can I do both? Why not do one of each? That way you can test the market with real life experience and then make up your own mind.
quote:
I tend to think more along the lines of the first. I guess what inspired me was an article in the latest Aust Property Investor Mag about student accomodation etc.
Hmmm… how were you inspired? What did it say?
Well mate, my final comment is that whatever you do… do something! Don’t sit on the fence! Make it your New Year’s Resolution to have your first deal stiched up by 31 Jan 03.
I can see that you have already started looking for properties in line with what I said on the Fast Track tape. Excellent. Action creates momentum.
quote:
Anyway, any feedback, positive insights etc would be most appreciated.
Matthew, you have done the research and have taken some tentative action. If it’s meant to be then it’s up to you. I believe you can do it. Do you?
Warm regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Welcome to the PropertyInvesting.com community and thank-you for your post.
While the investment you outlined in your post would not be something that I would buy (as it is likely to be negative cashflow…), I nevertheless feel that being in the game makes you well placed to go on to investing success.
Nobody scored the winning goal by sitting on the sub bench…
But don’t stop at one!!! Take what you have learned from this site and your existing investment and go on to acquire another 40 in 2003. []
Remember to post your questions here and I look forward to seeing more from you on the forum.
Bye
Steve McKnight
P.S. Why not post what you have learned from your first investment?
**********
Remember that success comes from doing things differently.
**********
what is the best lender for wraps now that ANZ are much more difficult to use?(they did not accept me) – eg int rates and get in / get out fees included…
Sadly, the process of seeking finance for wraps is never easy and is more often than not a case of trial and error.
I believe it is best to network with mortgage brokers and tap into their network to find a willing lender.
The people that we use are not generally open to the public since we get wholesale treatment as we own so much r/e.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
A solicitor would normally draw them up on your behalf.
I’d imagine that it is just a standard Word document on their system that is tailored for your particulars… but nevertheless, it would be smart in the first instance to have a solicitor advise you as it will need to comply with the relevant Consumer Credit Code and other financing parameters.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
I must admit that I am not a fan of John Burley’s site since the policy adopted is one of heavy censorship.
Still, if you pick up one new piece of information that makes money then it’s worth the time to wade through all the “acceptable spam” posts which cater for big egos.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
There will be two legal documents in a 2nd mortgage.
The first will be the normal sale of land agreement.
The second will be the 2nd mortgage agreement.
Re: the issue of being left high and dry… I would either include a clause in the sale of land agreement saying that if the seller pulls out then s/he must pay all legal costs for both parties.
Or, if this is not the appropriate leagl form (that is, procedure) – then draw up another agreement that outlines the intent.
If you are worried about collecting the money then ask for the funds to be held in Trust by a solicitor as a sign of good faith.
Bye
Steve McKnight
**********
Remember that success comes from doing things differently.
**********