Forum Replies Created
(Homer Simpson)
mmmmmmm…. Forum…. aaaaaaarrrrrgggghhhhhh
Tas [
]Hi Carmen, I’ve never heard of a ‘conveyancing report’ so cannot advise you on it, I think you may mean building inspection report, or simply conveyancing.
If you mean a building inspection then you should make it a condition of the contract that the purchase is subject to a suitable building insp report, then arrange one (can be done after you sign the contract).
If you mean conveyancing, then a solicitor will do this for you once the contract has been signed (as part of the settlement process). Conveyancing is where the solicitor checks that the property you are buying is actually owned by the person selling it and there are no ‘hidden’ debts or caveats on the property.
Feel free to ask any other questions before you sign a contract, and you may like to take it to a solicitor to help explain it to you before you sign it.
Tas [
]Hi Andrew
In your example, basically you would pay CGT on the difference between the sale price and initial costs i.e. $60,000.
Because you have owned the asset for more than 1 year, you are entitled to a 50% discount on the CGT. So you would only be taxed on $30,000 at your marginal rate.
If your marginal rate is 31.5%, you would pay about $10,000 in Cap. Gains Tax.
That’s the simple version. You may also be able to reduce the end sale price by the costs of selling (eg if the RE agent fee is $10,000 then your gain becomes $60,000 – $10,000 = $50,000 so your CGT will be lower).
Along the way you may also get many tax benefits, eg depreciation and special building write off, but these will also affect the end CGT.
Tas [
]Hi Shane, I agree with Tim on this one. Nice place to visit, well actually its not – but Strahan is nice (about 25 mins drive away).
There is a road up the west coast from here. In Tassie it is called the road to nowhere.
Seriously.
Tas [
]BB is right on all counts, and I would like to add that the other way you may like to do a deal with your mum is that (assuming you can find suitable properties with high enough returns) you could simply use her equity (the $ she gives you) and then pay her say 12-15% interest on it.
The difference between the two methods is that generally under BBs way your mum would also get the loan (i.e. she would provide ALL the money) and under the above option, she only provides the deposit money and then you arrange the finance for the rest in your (or your structures) name.
Tas [
]Robert Allen is an infopreneur, and by reading his free info and books such as the one minute millionaire you actually get a fair idea as to how he gets his money from doing this all for free. Basically he expands his newsletter base and can then sell more of his books, tapes, paid seminars etc. For instance I started with a lot of free stuff and have now purchased 3 of his books.
I also signed up for the tele confs but due to time differences and cost of calling into them in the US have not participated in one, so don’t know what they are like.
Tas [
]Would love to be there but unfortunately won’t be.
Tas [
]Why? Nothing against Devonport, and yes there are positive cashflow deals to be had, but on the basis of the ferry arriving there?? Think about it:
1. There is already the Melbourne ferry arrives there, so its not that big a deal.
2. Apart from a few lunchtime cafes that will benefit – when everyone departs the ferry at around midday – what’s the first thing people are going to do? Start their drive to the east coast, Launceston, Cradle Mountain or Hobart most likely. Don’t think there will be many stick around in Devonport… there’s not really a lot there. Devonport accomodation won’t be affected much as the arrival/departure is midday not morning or evening (as with the Melbourne ferry).
3. I can’t see people visiting Tas and leaving with the thoughts “that was a great holiday, and wasn’t Devonport nice – and a ferry to Sydney too – I think I’ll buy there.”
There are some new hotels going in on the east coast, more a tourist area that is likely to benefit from the ferry – and hopefully Tas overall will see a boost to the economy, but I wouldn’t buy in Devonport simply because there is a new ferry.
Hey Tim W are you out there to comment on this?
Tas [
]Benson, did you also know that Steve is about to update this website with all new features but its a bit delayed I think with all the other stuff he is doing such as:
Recent wrap seminar in melbourne
First book launch this friday
Mentoring 10 apprentice millionaires/writing 2nd book
oh and buying more properties (25 in the last 5 days)Tas [
]Hi Judith, yes you can use your equity in your home for the deposit (say 20% of purchase price) and then borrow the remaining 80% against the new property.
You would physically need the $$ to pay a deposit on signing the purchase contract (though not necessarily the 10% requested, you can negotiate), so you will need to refinance or set up a LOC with your home equity in order to be able to actually use that money for the deposit. You can’t say ‘I have the money, but its locked up in my house – can I give you some bricks instead??'[
]Normally you pay the deposit if you have the cash saved elsewhere and then arrange the finance all in one hit through a mortgage broker or your lender – but as you say, you don’t have the cash elsewhere.
I haven’t seen the book as yet, so can’t comment on that part!
Tas [
]I agree with RSTARR.
Basically it explains everything about structuring options and then recommends the structure Steve and Dave use for their investing. Makes so much sense and is well presented. Sounds like you will really enjoy it Amitash.
Tas [
]I think this comes under ‘other comments’ ha ha…
There is a block of 4 units for auction at Bondi Beach this weekend. For details visit http://theblock.ninemsn.com.au/theblock/
I think they are overpriced!
Tas [
]God what a negative article! I have come across it before – still havent read the whole thing as its too negative.
All I can say is that reading RK’s books have opened my eyes and I’ve had many Aha moments as I read something he has written that is relatively controversial (eg. your house and car are not assets, an asset is something that gives you cashflow) – but which makes perfect commonsense.
The only problem with his books are that my outlook on life is so different after reading them, I will never be happy with a ‘job’. As many of us dream about the $100,000 passive income just coming in without having to do anything, and retiring early… I want it now, and I am not getting there fast enough. Very frustrating RK you bastard!
I wonder if I had never read them how blissful life would be [8D]
Tas [
]Hi Di
In my experience, using a property manager, the tenants have been no problem (4 out of 4 properties) [
].All properties have been clean for inspections, they have had work done in the gardens (inc. new plants etc). Normal wear and tear.
The only problem I had was with one property (it must be jinxed) when the neighbours car went out of control and smashed through the front garden and fence, and a couple of months later the tenant did a runner leaving the place empty over Christmas. With landlords insurance and bond, there was no problem.
Tas [
]Classic Del! That line cracked me up [
]You’re right – the wraps help fund the buy and holds (by providing the deposits for more buy and holds) and I am sure Steve said somewhere that buy and holds are the long term key when it comes to passive income.
Be flexible with your exit strategies everyone…
Tas [
]I’ve come across a good website that you should take a look at…
Its a US site, but has heaps of tips on book writing, publishing and promoting (both online and printed).
I’d like to write a book too someday!
Tas [
]Hi Tess,
I don’t have a LOC but I have been looking into them recently and I found the ANZ one to be the one I would have chosen too (I decided I don’t need one in the end).
A mortgage broker told me the interest rates and fees are similar across major lenders, but there can be some variation as to how much they will lend (their lending criteria can differ depending on a number of factors such as their current total loan breakup)
The $295 annual fee you refer to is for a professional package, and these are pretty standard across the major lenders as well.
All up, I think you have picked a lender and got a deal you sound happy with, so well done.
Tas [
]I read her positive cashflow book literally as I was starting out and it was the best thing I ever read (at the time). It all made so much sense and really is one of the things that got me into this. I realised that the one and only property I ever owned (and which is now rented) is actually +ve cashflow, and I had never even heard the term before.
Suddenly all the stuff I read from Robert Kiyosaki made more sense, and the next book I read was Dolf De Roos real estate riches. A powerful combination!
I recently started to read her latest book, hoping to get more insights – but to be honest its now sitting half read next to my bed (under a lot of other books that I want to read before it). Yawn.
Edestiny is her ‘financial planning’ business that started at her home on the Central Coast of NSW and is now being franchised in NSW and I think Qld? Soon coming to other states too. From what I gather (I am in the industry) she is not looking for qualified and experienced CFPs, so it is really a mortgage broking operation promoting positive cashflow properties. A lot of her clients are simply those who have seen her speak, or read her book. I think we can do better…
Tas [
]I wholeheartedly agree with AussieRogue bigtime in that Steve is fully aware of the potential impact of these circumstances and has taken steps to minimise risk where possible, eg he mentioned at the recent wrap weekent that part of his total loan portfolio is fixed (not variable), to minimise the interest rate risk. Obviously the other key factor is that he is using ALL surplus cashflow to reduce the debt on his investments now (and hence reduce interest costs). Should interest rates reach 12% (18% come off it Crashy), Steve could probably afford to reduce the wrap purchasers interest rates for a short time (say 12 months) to maybe 9% and STILL make positive cashflow out of the deal, because he has correctly structured it in the first place. I also think that the market has changed, I am looking to sell at present and have not bought anything for months as the market is so high.
Westan, I like your thinking too. If the market is too hot – find another market! And stick to what you know works.
But who knows, this boom may continue for another 2 or 3 years yet and we may (in hindsight) look back then and say, why wasnt I buying in 2003???
I mean we all agree cashflow is the go. We’ve had -ve geared property and realised that doesnt work, so we now want positive cashflow property, and if that doesnt work because interest rates may rise what else is there? Super happy 100% fun mega positive cashflow?
Tas [
]thanks for the last couple of tips – I will make sure when I get offers I really stick it out! I am not desparate to sell, and I really am selling to get the highest price possible in the current market. Hey if people are silly enough to buy over the phone – thats their problem. You’ve reassured me Kooringal [^]
Davo70 – hindsight is a VERY powerful thing. I hope that you were able to use the proceeds from the sale profitably somehow though?
Tas [
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