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Hi Nooob,
I think you need to determine what you want out of a mentoring program. If you want someone who can explain and guide you through the investing process, teach you about different investing strategies and provide the support you require, and generally help you minimise the chances of making expensive mistakes, then that is one thing. If you want someone who will find and recommend property for you to buy, then that's more moving into Buyers Agency territory.
My understanding of Positive Real Estate is that they will provide all the support as in the first example above, and if you want to learn to locate and research your own properties, they will guide you through this process. But if you don't have the confidence, time or expertise to do that you have the option of the Buyers Agency deals. As with any property purchase, you would need to ensure the property stacks up just right for you, regardless of who has sourced it. Your mentor should teach you how to do this.
I know all the arguments for there being a lot of good, free/low cost information available, whether it be books, seminars, mixing with like minded people or this forum. The reality is that you can spend hours on this forum and you will most likely come away entertained and sometimes bemused, but as a newbie, you could search for hours to differentiate between the gems that are certainly here (posts from the very experienced and straight talking members) and the sometimes dubious opinions or rants of some other members.
The reality is that some people need one on one assistance to get them started, whether that is to help avoid procrastination, or whether its because their limited time is best spent focusing on what they need to know, rater than other more peripheral info. And if spending $9k on a program enables you to start building a successful portfolio and gain the knowledge and confidence you need to continue, then that seems like a small price to pay compared to a lifetime of procrastination.
So I guess if you went to their seminar, and they were not trying to sell you or sign you up for something on the night, and if you were interested in what they had to offer, then investigate a bit further to see if you feel comfortable. Ask about the mentor's credentials, level of experience etc. They should be willing to answer any questions. This goes for any mentoring program.
Good luck.
Wake
It is possible if the townhouses are free standing, and the strata plan shows that each townhouse is completely within the boundary of the respective lot. In this case the buildings are not common property. If there is no common electricity, water, gardens or lawns then apart from any common services running through any of the lots, pretty much the only owners corporation cost would be the insurance.
Its all in the way the strata plan is prepared. Note that this does not mean there is no owners corporation, and technically in order to be able to collect/recover the insurance cost from each owner you need to strike levies. If not, there is no legal recourse if someone does not pay.
We have built 3 small strata schemes like this – 2 x 2 dwellings and 1 x four dwellings.
Wake
Unfortunately yes, without seeking legal advice first
. There's not much equity available so they would fall far short of the final amount, but I guess anything is better than nothing for the Administrator if they have creditors to pay.So, they employed an investing strategy that carries a greater element of risk than some, without fully understanding the legal ramifications (let alone the market they were buying into), did not ensure they had a plan B in case of problems, and may lose everything. Theirs would then become the BBQ story that scares off other potential investors.
We have been trying to tell them that, but they still prefer to employ the ostrich theory. This conflict of opinions from the accountants has just raised the issue again. Mind you, they are just now doing their 2011 tax returns so that may give you an idea of how importantly they view their wealth creation, They have a few other properties and complain about negative cashflow etc but don't follow up on our advice about tax variations etc.
They are good friends and normally I would applaud people taking action to get ahead, but they have merely bought properties over the last few years off the back of successes we have had, without any of the due diligence, consideration of their personal circumstances, strategies etc that we employ to greatly increase our chances of success. And unfortunately they are not very teachable – breaks our heart.
Yep. Their contract states they can be liable for all rates, strata levies etc plus two types of interest daily (don't remember know what they were but it totalled approx $500 per day
) PLUS the sale shortfall!!Approx 1 year ago, before the unit eventually sold, they got a letter from the receiver and had to send details of all their assets etc. They have heard nothing since and are hoping it has gone away. Me – I would rather know than stick my head in the sand.
QLD. I read the contract <moderator: delete language> – which is more than they had done – and all the possible penalties for not settling are clearly spelt out. I truly hope they are not pursued because it would bankrupt them and even then the other party would still not recover their money. Unfortunately the developer went bankrupt because there were so many defaults on this complex and another one he had also sold OTP.
Thanks Terry. Yes, for both properties they are tenants in common 50/50. Pretty sure everything happened in the same financial year, although in theory the loss, which happened first, should carry over anyway. Hope for their sake the 2nd accountant is wrong. There is still the chance that the receiver may chase them for the shortfall (and all other costs as per the contract) as the unit eventually sold for $250k LESS than they were buying for. The situations people get themselves into….
Hi,
There are a few things to consider. As with many locations, once a place is identified as a "Hotspot" investors tend to flock there and the supply and demand levels can be altered. There have been a huge number of new homes built in recent times which has resulted in a lot more rentals coming on the market. I know the media is still saying the vacancy rate is extremely low (can't remember the exact figure) but based on my recent observations, properties are not leasing super quickly and there are quite a lot available.
My daughter built a 4 bed, 2 bath, DLUG house in west Orange and it took 3 weeks to get a tenant (approx 6 weeks ago). I thought that wasn't too bad considering how many identical properties are available. She is getting $460pw unfurnished. If the house is well located, in good condition, and fits the demographics, it should rent OK, all things considered. Not sure what the demand is for 5 bedders though?
The demand for furnished accommodation has greatly diminished because many of the contractors employed to work on the expansion of the gold mine have now left town or are otherwise unemployed. Some have taken up work on other projects eg construction of new retail centre, but I would certainly not be looking to buy/rent a furnished place there at the moment.
I also know of someone who bought, and is trying to rent an older unit that has been renovated. However, because its at the lower end of the market, the PM has advised that while there is plenty of interest, most of the applicants are either less desirable, or cannot comfortably afford the rent, so it sits there….
Having said all that, Orange still ticks a lot of boxes for a good investment – if you have the right type of property and realistic expectations.
I just got insurance on a new IP in Emerald through CGU – but I had to do it over the phone. Their website system balked at the postcode (due to flooding I would assume) but over the phone the girl could override that.
After reading the link above, it seems to be referring to a particular scheme have 33% of owners in arrears. That would be an exceptional case!! In my experience, across a strata management portfolio it would be more typical to have perhaps 3% of owners more than 30 days in arrears, and perhaps 1% more than 90 days in arrears. It should also be remember that, in NSW, if a levy is due on 1/9/11, the owner has 30 days in which to pay before interest starts accruing. So it's due on the 1st but you can't take any action until the 1st Oct.
Not in NSW. Don't know about other states.
I would have thought the prospect of bankruptcy might be an incentive? However, that still does not help the other owners during the lengthy period required to get from initial arreas to finalising bankruptcy.You are correct. This is just one of the risks associated with buying strata title.
This can be an issue, but fortunately large $$$ arrears and lengthy proceedings are not that common. In NSW there is legislation that sets out the procedure for recovering levy arrears by the owners corp. It starts with reminder letters/letters of demand then moves to a solicitor/debt collection agency who can issue a statement of claim, then have judgement entered and then there are a few options such as sending the sheriff (next to useless), garnishee rent/bank accounts if detailsare known, issue an examination notice where they are required to provide details of all assets, liabilities, income, expenses etc and if they decline to do so can be arrested and taken to court, and finally there is bankruptcy. In NSW the bankruptcy threshold for an individual has just risen to $5,000.
If the proces is followed correctly, all costs are recoverable from the defaulting owner. However it can take a long time if the owner does not/cannot cooperate. If someone is seriously in arreas you can bet that they are also behind in rates, utilities etc however those companies can wear it longer so will be less inclined than the owners corp to take action. In past times, once it got to a certain stage you could sit and wait for the mortgagee to take possession, knowing that you would get your money on settlement of the sale (if the arrears are not paid on settlement the new owner legally becomes liable so you always get the money) However this seems to be becoming less common these days. Not sure why – perhaps lenders have a conscience (haha) or don't want the publicity??
Now if the process is drawn out then yes, it is likely the remaining 3 owners will have to make up the shortfall for a period of time, especially if the funds are low to start with. Not fair, but that's the way it is. It can make paying the bills a real juggling act for the strata manager too, but they are unlikely to quit unless the remaining owners fail to take the necessary action to deal with the issue. The recovery process is the same for any size scheme. A good strata manager will keep track of arrears to try to avoid debts blowing out.
Hi Mike,
Yes it appears that you will be better off. If you PM me, I will ask you a few more questions, and then I can give you an estimate of your after tax position in this scenario.
I have a copy of the PATTERN (Property & Tenant Tactical Evaluation Resource Network) Property Analysis Worksheet. It says its Version 1.0, but since I can't recall how many years I have had it, I don't know if its the one you are looking for?
Hi Jarad,
You don't have PM turned on. Would be interested in chatting about Orange.
Joe, the owners corporation and body corporate are the same thing so not sure what you mean. If the invoice says it is from the owners corporation, and you are expected to pay the owners corporation, I would politely tell them to go fish. If its an invoice from the strata management company, asking you to pay them directly, then unless they can show you their agreement with the owners corporation stating that they can charge individual owners for such issues, then tell them to go fish.
Generally, the only expenses that can be recovered by the owners corporation from an individual owner are those stated in the legislation eg debt recovery costs, rectification of non approved works etc.
My suggestion would be to document the problems, and take photos. identify which by-laws are being breached and ask the strata manager, in writing, to address the breaches, in writing, with the offending owners, and provide you with a copy. If the letters are ineffective, then either you as an individual owner, or the owners corporation, can lodge an application with the relevant body seeking a remedy. This might be mediation, a fine, or an order. In NSW you apply to the CTTT however each state will have slightly different rules for how this is done and their website will explain the processes and provide the application forms.
Unfortunately, it is one thing to write/speak to an owner or resident asking them to comply with the by-laws, but actually having the by-laws enforced is an altogether different matter and requires the applicant to be committed to the process. The strata manager cannot enforce by-laws beyond writing threatening letters. That responsibility lies with the owners corp or affected residents. However, whatever is done must be in writing so there is proof that the offenders have been made aware and given the opportunity to cease.
Colin, that is called Company Title, and as flawed as the Strata Title system may be in NSW, it is infinitely better than the old Company Title system. The expense and process involved to convert an old Company Title scheme to StrataTitle is big enough. Even if it were possible, no owners corporation would do the reverse process.
I doubt many owners in NSW are worried about unlimited libaility because they don't realise. There is a simple solution – maintain adequate strata title insurance at all times.
If your scheme is in NSW then the roof is usually an owners corporation responsibility (quite rare for it not to be). The strata manager should get quotes to replace the roof with the same as existing materials (unless something unsuitable like asbestos of course) as the new work needs to be in keeping with the appearance of the rest of the compelx. The owner of that unit has no right to have the only say in what happens. Hhe would be stupid to choose to pay for it himself because there is no way of hin being excluded from paying for other roofs. All strata levies, whether normal or special levies, have to be paid by unit entitlement. You cannot chosse which you pay and which you don't.
Dafnny, there is no greater "sin" than the owners corporation being underinsured. A levy needs to be raised yesterday for this to be rectified. No discussion to be entered into. Not many owners know, but an owners coporation has unlimited liabilty, which means that there is NO limit to how much each owner in a scheme can be up for in the case of an insurable event where the insurance is inadequate. This could be a building fire, or a legal liability claim 15 years after a child gets hurt etc. That cannot be stressed strongly enough.
If your scheme is in NSW then the roof is usually an owners corporation responsibility (quite rare for it not to be). The strata manager should get quotes to replace the roof with the same as existing materials (unless something unsuitable like asbestos of course) as the new work needs to be in keeping with the appearance of the rest of the compelx. The owner of that unit has no right to have the only say in what happens. Hhe would be stupid to choose to pay for it himself because there is no way of hin being excluded from paying for other roofs. All strata levies, whether normal or special levies, have to be paid by unit entitlement. You cannot chosse which you pay and which you don't.
Dafnny, there is no greater "sin" than the owners corporation being underinsured. A levy needs to be raised yesterday for this to be rectified. No discussion to be entered into. Not many owners know, but an owners coporation has unlimited liabilty, which means that there is NO limit to how much each owner in a scheme can be up for in the case of an insurable event where the insurance is inadequate. This could be a building fire, or a legal liability claim 15 years after a child gets hurt etc. That cannot be stressed strongly enough.
. There's not much equity available so they would fall far short of the final amount, but I guess anything is better than nothing for the Administrator if they have creditors to pay.
) PLUS the sale shortfall!!
