What really annoys me in this scenario is that:

I went to my bank, sat down together with ANZ’s banker (also happens to be a “senior banker”). Did our calculations.

When he checked my personal bank account’s transactions, it is so bluntly obvious that between my and my wife (we both bank with ANZ), after all the monthly repayment and our spending, we still save additional some $3K per month and put those into our offset account to offset our PPOR home interest.

Even when we do take the equity release and the additional monthly repayment of equity release into consideration, the bank’s spreadsheet shows we can still save more than $2K cash per month after all the calculations…

And yet, the answer I am getting is “sorry, your history statement and your ability to save that much money in reality does not count when we do our assessment. We only use our own figure”. In other words, we have a proven track record of our living expenses in detail, that is traceable in ANZ’s banking system and yet, they ignore that and think our living expenses is at an “assumed figure” that is much higher than what is realistically happening. Makes me wonder why bother looking at our transaction history when they are not using it as a source of truth.

• This reply was modified 7 years, 1 month ago by  Steven.

Alberto wrote:

my partner and myself attended the same course two weeks ago in Melbourne. I had your same doubts. The course is good but we did not go on for 35k….

So at the moment we are continuing searching and studying by ourselves. We are very interested in investing in UK and NZ, at the moment we are looking for good Sourcing agents in both countries.

Ahhh OK, we were in the same class then.

A googling on the Internet actually shows a lot of comments, both positive and negative, about them. However, not sure if you noticed, but I see a “trend” in those negative comments. Basically, the way how I signed up the training is:

1. I saw my friends “liked” their free intro course on FaceBook, so I attended.
2. I think the information presented in the free intro course is good, so I decided to attend the 3 day training.
3. I did debate with myself and my family a bit as whether to attend the expensive mentor program, but in the end I decided to attend.

Now, the negative criticisms on the Internet (mostly saying this is a SCAM), the trend I see is that all the negative criticisms are directed at point 2 above. Even then, mostly the negative criticisms are NOT directed at the content of the training, but rather directed at the way how they marketed their mentoring program and how they sounded a bit pushy to get students to sign up.

And I am yet to see any negative criticism complaining the mentoring program itself is a “SCAM” or “a waste of time”. I am yet to see any comments stating “I paid my 35K AUD and I learned nothing from it” or “I paid my 35K AUD and only to find myself got into a SCAM” or something like that.

This to me, is an indication that students to paid for the expensive mentoring, they actually put effort into learning and practicing, and then subsequently got results they wanted in the end. Otherwise in the company’s 20 years of public trading, somebody’s bound to call out and say “the mentoring itself is a SCAM”.

I personally think a fee up there serves as a way to whit out those who are really serious from those who are just trying to make a quick buck.

My wife was initially against me signing up any further.. however after a few days of discussion, she admits the reason she was against me initially is not because she disagrees with the mode of operation, but rather, she didn’t like the way how they market their mentoring program and tried to push the students in a hurry, but once she sees past that, she actually agrees with how the model which the students will be used to run their businesses.

I also agree that there are less expensive mentoring programs out there, and there are free mentoring programs out there too. And some of those less expensive and free options can get us into where we want as well.

I definitely do not think signing up with an expensive mentoring program is the way to do property investing for everybody. Everybody’s circumstance is different, so we all use different approaches.

So yea, I guess it just goes back to where I started: whether people think it is worth it or not, it is entirely up to each individual. Just like how Ben quoted Henry Ford in class: Whether you think you can do it or not, either way you are right.

Hi Benny

I got the clarification re: tax deductible from them.

Probably irrelevant, but more of an FYI for those who are curious to know the answer.

The Tax Deduction doesn’t happen in Australia, but happens in UK or NZ, depending on the choice of investment.

In UK, it can be claimed from the day of payment up to 3 years, and in NZ, it is 18 months.

So basically those who choose to pursuit further would setup their company / trust from the chosen market and write it off as business cost from there.

Hi Benny

What you said is very true, and this in fact will touch base on the next sharing which I will be typing up.

Without going into any details into that topic, the way how the class room was teaching us is that: we don’t try to time the market, and instead we use a strategy that will work whether the market is going up, stalls or going down, because our cash flow is healthy.

So if we get both equity soar and cash flow, that’s fantastic, its an added bonus for us.
if the market stalls and we don’t get more equity, that’s OK
if the market crashes and our property drop in value… well, let’s say we won’t be too happy about the drop in value but we are not worried due to cash flow continues to be healthy and cash flow is what protects us.

More on that topic in a separate thread.

I think 30-60 minutes per day is an OK commitment. Its not like I need to spend hours and hours for 3-6 months. So basically, it is like do 30-60 minutes study, let things slowly sink in, etc… rinse and repeat.

The travel to Auckland for 3 days does not happen until after those 3-6 months. I was told we meet their team on day 2 and potentially for those students who are ready, they can get into their first deal during their trip, but most students are not expected to act that quickly.

Also, the mentor is not there to teach us for 3 days and then forget about us, nor are we supposed to leave our mentors underutilized. We paid to get mentoring for a reason. So if the sourcing agent presents me a deal and I need a second pair of eyes to check things out, I can ask mentor questions. The important thing is to stay in touch with the mentor the keep things going smoothly between us. So in a sense, I’d say this is not that much different from getting an Australian Mentor who lives in Sydney rather than Melbourne (except for the 28K part).

Now the mentor is not there to do my job for me, so if I am not sure about something, I need to put down my thoughts and specific questions I have about deal for the mentor to be come back with specific suggestions.

By the way, I sent you a private message in this regard. Let me know what you think.

I don’t know many buyer agents in Australia, just as I don’t know any NZ sourcing agents for the moment. So there is probably not a great deal of differences in this regard.

I haven’t signed up for the program though, just that I asked for a 7 days extension for me to think about before they shut me out (they gave me the 7 days to think about, and the instructor who presented the class still gave me homework as if I paid my deposit). So I have until Sunday evening to make a decision.

As for being tax deductible, I don’t think they are referring to Australian tax point of view, but more from NZ/UK point of view. ie: a trust will be setup in NZ if I go and this education expense and travel expense gets written off as part of trust cost rather than my personal cost. But I will clarify on that if I decide to sign up.

Based on my understanding, I think the strategy which they use are not going to work very well in Australia. Many students who sign up will opt to use a “buy and flip” strategy to get started, so they can build up their cash stock before they consider “buy and let” or “house of multiple occupancy (where we have property with 6-7 rooms and we rent out individual rooms)”

The problem with flip strategy is that, in Australia, we have the 2 nasty taxes called Stamp Duty and Capital Gain Tax, which neither exists in New Zealand (not now anyway).

This means:
1. When flipping, we need to consider the extra 5.5% as our cost when we sell the property. So less profit for us.
2. If the property is sold within 1 year (which will be the case if we flip), then that’s 50% CGT and if after 1 year, it is 25% CGT. This one is a killer.
3. Once that is over, the remaining profit gets added on top of my personal income and gets taxed again, so if I have a high paid job, that’s even more tax.

This is just not going to work out very well if I need to do, say, 2-3 flips in less than 12 months.

Anyway, I still have 4 days to say yes to them if I still want to sign up by end of this week.

• This reply was modified 7 years, 1 month ago by  Steven.

No, I randomly saw them on Facebook so I attended their workshop.

At least at this stage, I do agree with a lot of what they say.

I mean really, if I personally run into Robert Kyosaki tomorrow, and he would like to introduce his team to me to do Real Estate, then I’d sign up right away. I know that Robert doesn’t pay his team member in the form of a “pay roll”, ie: they are not Robert’s employees, but they still form a good team working together.

So regarding to their team, the way how they presented is that, the Tax agents, Solicitors, sourcing agents, etc… are not Legacy employees, (that is, they are not on Legacy’s Pay roll so Legacy doesn’t pay them salaries to do business together) but people who they make use of.

To be honest, I couldn’t care less who sourced the properties and from where, as long as I keep in my head that:

1. The numbers add up. (do my math)
2. The numbers make sense. (research the area where the properties are sourced to understand if the property is really below market value or not in that area, and whether the area is suited for such investing)
3. I get to free up my time. (I have a full time job, so there is no way I get to do property investing in a full time manner, nor is it possible for me to dig up those under market value properties on my own. So instead of relying on the unreliable myself, why not make use of leverage instead).
4. The cash flow makes sense. (this is the king of everything. If the cash flow adds up and meets my requirement, then who cares if the sourcing agent and Legacy pay each other or not)

I mean looking at my own situation now, I have 2 properties, 1 is my own home and the other is an investment property.

The amount of time and effort me and my wife spend is insane, and even then the investment property is not a good buy. (we bought for appreciation, not for cash flow, big mistake on our part).

Truth be told, I myself have very low confidence in my own ability to find under market value properties, whether in Australia or overseas because: a) I don’t know how to find out whether a property owner is deceased or divorced or defaulted on their loan. b) I don’t have any connections with any agents or otherwise. c) Even if I do, I don’t get the time to do that.

So basically the way how it is structured is:

1. The expensive part is the studying. (think of it as a uni fee)

2. When you do properties with them, each time a property is sourced:

a) you will be charged a sourcing fee. From what I see so far, it looks like usually it is around 4-5K NZ dollars
b) you will be charged legal fee, etc… obviously (I didn’t take note of a figure, but it is quite negligible compare to the rest)
c) you don’t pay stamp duty in NZ (my parents’ NZ friends verified that to be true)
d) currently there is no CGT in NZ. The NZ government are trying to introduce it, but whether it will be successful or not, we don’t know.
e) The assumption is that property management will be at 10-15% of rental income. (might as well assume 15%)
f) Once again, the monthly operation expense (such as insurance, water bill, rates, etc…) will form between 10-15% of rental income, depending on each circumstance. (again, might as well just assume 15%)

——————————————-

One thing that the instructor repeatedly stressed is that we do not want to use our own money to invest. Unfortunately there are 2 fees that can’t be avoided, and they are:

1. they learning fee (that expensive 28K fee)
2. the first deposit for the first property — this one we will have no choice but to transfer from Australia to New Zealand as this our starting money.

However, the important thing is once the first deal is done successfully, we do NOT need to transfer any more money from Australia to New Zealand to do further deals, because we can use the profit we generated from the first deal in New Zealand to keep us going. In other words, we make our initial investment using our Australian money and that’s it, and from this point onward, we are supposed to make more profit by using the profit gained within New Zealand, we should not need transfer money from Australia each time we want to buy our next property unless we messed up. This also means the first deal has to be done very carefully to avoid messing up. Once the first deal is done correctly, not only does it give us the leverage to use our profit in NZ to keep us going, it also gives us confidence too.

If a student has to transfer the deposit from Australia to New Zealand every time that student is trying to buy a new property, the that student is doing something terribly wrong.

The instructor made it very clear multiple times during the weekend: If you need to take cash out of your own saving account every time you want to buy a new investment property, then you are asking for bankruptcy, because the amount of money in your saving account is finite and they increase at a very slow rate if all we have is our 9-5 jobs. So you need to make use of leverage, use the “money in, money out” approach (with Australian property yield at record low, I am not sure if money in-money out approac really works that well in Australia, but then I won’t find out how well they work in New Zealand either until at least I give it a go).

Terryw wrote:

My hunch is that they offer buyers agent services

Yes and No to that.

They know some sourcing agents, but they are not in a “employer and employee relationship” with the sourcing agent.

Kind of like the real estate agent who sold my property, he knows some good conveyances, but he doesn’t pay the conveyance and neither does the conveyance pay him. They both charge me instead.

Hi Nigel

Just visited your website and sent you a private email.

Cheers
Steven

Hi Nigel

This is not to say I will do it, but I am trying to put this picture as well as the numbers in my head at the moment.

The way how she describes how she does it, is due to her advantage of her position and relation with who she deals with. ie: she maintains good relations with developers and real estate agents.

So when a new project runs into issues, such as a property fails to settle due to marriage break down or due to the buyer unable to finance, and the property needs to be disposed off quickly at lower price, the developers and real estate agents notifies her of the situation, and she then subsequently either buys them herself or refers to someone who she knows wants to invest, to buy those properties at lower value (sometimes ridiculously lower value than if the property is sold conventionally).

So this way, not only is finance not a problem, but cash flow is also very good compare to if such “student accommodation” are bought in a conventional manner.

Eventually it gets to a point where she really only needs to look at her rental income because she has so many of them as well as due to her buying at a much lower value, her rental income exceeds her cost, to the point of even if the capital growth is low, so what?

Essentially she can retire already if she wants to.

She owns her accounting firm and from what I can see when I was in her office today, her employees are doing bulk of the accounting work for new / random clients and she pretty much only does accounting for clients who have been using her accounting service for a long time (such as my parents, who make use of her service for the past 20 years).

Now today, she mentioned that she’s happy to make referral to me if she knows such scenario happens again (ie: property fails to settle due to problems mentioned above)…

Not to say I will definitely do it that way, but just thought it might be an option if this “buy at lower value” really works the way she makes it sound like.