Forum Replies Created
Couple of basics- borrow 100+% of the costs (as this is tax deductable-your ppor is not)
NEVER tell a REA that you are pre approved to $xK. This would be a red rag to a bull. Imagine your barganing power on a 250k house, and the agent (god bless him/her), knows that you are pre approved to 300k.
No, find out your limit, but keep those cards very close to your chest!
Just had another thought.
Maybe the olds could lend you some money and you buy a 4 bed 2 bath place (4 beds always go quickly).
Then rent out two or three rooms for 100bucks a week to some (relatively normal non-homicidal-axe-wielding-maniacs) people.
That would give you $800-1200 per month on the mortgage.
Just dont get the phone connected, and dont let any vegetarians in the house!
My 22c worth. (11 times more than usual!)
Price will always come down to supply and demand. Carrs new tax will increase supply (in my neighbourhood, for sale signs have popped up everywhere, people want to sell prior to july) and demand will have to drop (investing today is a totally different climate from 12 months, or even one month ago). when supply increases, and demand decreases, prices must fall. Yes, there are some who can wait (almost forever) to sell, but for most, a price lower or much lower than expected can probably be expected.
I think that carrs tax will screw him and nsw for a number of reasons.
Firstly, the moronic fools in treasury have counted up how many houses were sold in the last 12 months (in a red hot frenzy), and have then assumed that the same will be sold again in the next 12 months, and a 2.25% bonanza windfall will go to the govt.
But, the new exit stamp duty (and land tax) will fundamentally change the way that investments will be made. Buy and hold will become a lot more promising than buynrenonsell and buyndevelopnsell.
Those of you following my other threads may know that I have been very keen on doing a duplex development, which if successful, would keep doing more and more. Found a site, perfect, and the numbers crunch quite well. Enter car, enter a different climate, particularly in 2-3 years time. Enter skepticism, and my plans are on the outer, and I will either i) sit on the fence (like most of nsw) or ii) go to qld and try something.
You see, carr has just lost the 18K in stamp duty that I was happy to pay him just a month ago, and the turnover of properties will plummet. I think that is the reason for the increase in the land tax, to slug all property owners, those buy and hold strategies I was referring to before.
So, plateau or correction, or a plummet? Hard to say, but with yields at an all time low, units an dtown houses being almost untenantable, it will be an interesting ride in the years to come.
And as for the ‘opportunity is just around the corner’ people, I will be waiting for the prices to drop, then stabilise, then slightly increase again before buying. That could be a couple of months, or a few years
Oh, you lot do complain and bitch a lot about nothing dont you? With your bank bashing, australias second national sport (after telco and net whinging)
Well, here then is the most positive story I can relate to you about my bank, the glorious institution of WESTPAC
We (the better half and me), had a cheque to deposit with our glorious westpac bank. Not any cheque, mind you, not a dodgy smeared potentially bouncy personal cheque, mind you. It was a real cheque, a real bank cheque. So we wished to deposit it into our westpac account, and to access the funds immediately, because, bank cheques are as good as cash, or so we are led to believe. Indeed, this fine cheque was embellised with a prominent bank name, beginning with a red W. Westpac was the name of the cheque, the provider of the cheque, the recipient of the cheque, and yet, due to the high standards of customer (dis)service, they would not clear the cheque straight away.
And, as I say , this is one of the more positive aspects of dealing with my (ex)bank westpac.
Another few thoughts
Where do you live? If you are living in nsw, I think you may be in for a happy surprise over the next 12-18months, as I think that prices will fall/tumble (in part due to the new investor taxes). Thus, saving and not jumping in now could be a good thing for you. I think that the great bull run may be over.
If you are going to buy a house/flat/etc, please promise me that you will see a lawyer re title names/docs etc. (ps- am on your side- you sound v intelligent in considering the possibility of seperation, as opposed to derogoratory comments)
As for nothing down possibilities-
can get delayed settlement ?renovate in meantime
option
get vendor finance 20% deposit
oldies guarrantour (not a good deal for them- they are legally liable for YOUR debt)
oldies lend you/give you some cash for a depositGet started by getting rid of the credit card (oops, I am being prejudiced (?correctly) again), and by cutting out all the crap that we all buy but do not really need.
Firstly, why are you refinancing? Break costs on fixed interest will be huge, and savings will be nowhere near what you are told.
Secondly, well done by borrowing all on the ip, and bugger all on the ppor. Very intellegint.
Ring your current bank up and ask them for a list of valuers on their panel. It is useless to get a valuation done by someone they wont accept. They probably have 3 or 4 valuers. Choose them one by one, show them all of the wonderful things you have done it, throw in a few lines of recent sales, and you should get a decent valuation.
Total cost in terms of time, effort and money-bugger all. Time an hour off work, effort -minimal, not much stresse, and money about 230 dollars.
I was under the impression that banks will lend to a lvr of 70-80% with minimal hassles. Talk to the person in charge, not the checkout chick at the teller
My 2c worth on a topic I know v little about.
If you have termite in a wooden fence, why the hell would you consider spending one cent to treat termites. Get a quote for a metal fence (about 40-60 dollars/linear metre) and dig out the old posts. A metal fence will never have ‘evidence of past termite activity’ in a future pest report.
As for whether you got a good deal, I reckon you did, assuming one thing. And that is that you are able to hold onto that property (ie not be forced/want to sell) until you knock it down and build another house. Check with council, and build a duplex (attached) if possible in ten years time.
If you ever need to sell, people will walk for the most fickle of reasons, and the mention of the WA words will send them fleeing- hence my surprise of somebody trying to treat a fence!
Best of luck, but please promise me you will be conservative in your borrowings and never rely on selling the block.
Prices will certainly move north after m7 is built, and I reckon you got a good deal.
Thanx re the duplex help- hadnt thought about that!
I think the comment regarding selling in 5 years relates to this. If a building is sold, it has a guarrantee of (I think) 6 or 7 years. If you are owner/builder, then you are liable if something goes wrong with it (because you probably dont have builders insurance) After 7 years, not your problem.
THought about your predicament a bit more, and have come up with a solution, but you will NOT like it, and neither will hubby. Have your oldies move in with you. That way they get to free up some cash, you get your mums cooking. But dads farts may put a damper on things.
BUt seriously, have you considered building another duplex, where one of them has two front doors and access, which could be turned back into the one house by knocking down a wall. Ie build a five bed, three bath house with a combined central wall, and they have the 2bed 1bath area while you get 3beds, 2baths and no farts? This would allow them to free up cash, downsize and live close (but not too close)to their daughter.
Milkman, I assume that you are asking re rick getting early access to the house, under the guise of cleaning, decorating, etc. The real reason is that you can advertise, screen potential clients, and show them through the house on the vendors money (interest), not yours. On a 200k home, 7% interest =$300 per week. If you get three weeks ‘access’ you have saved a grand, and are three weeks ahead of the game.
But, you cannot sell something which you do not own, so rick suggests getting holding deposits, and then get the buyer to do their dd, and then exchange on the same day
Over ones head could mean a couple of things. Lets say you were in debt 45k, and wanted to borrow 100% (be it 10/20/30% vf) Is this too much? Kay may believe so (and so would I in most situations)
But what if the client was a recent medicine graduate with 45k of hecs, not a dollar to his name, and about to start a job paying 100 grand minimum. In that scenatio, I would think that sooner would be better than later
Must admit, I have not been to somersoft, so have no comment.
Regarding this site, I believe it is wonderful for many reasons.
i) firstly , it is basically unmoderated to the site owners wishes. Some OS sites are hopeless, and EVERY post is praising the site owners system. What a load of crap. Bec’s postings on vf sites would be deleted in a millisecond, and Steves name is blacked out. Is this really a conversation flowing between members, or does everything get posted three days after being posted so it goes through the gestapos filter to remove unwanted thoughts about his system.
ii) diversity of people in background, knowledge. Everyone has some input, even if it is a comment viewed as ‘stupid’ by someone else.
iii) advice received is generally answered by multiple people quickly, and at no cost. Sure, we can front up to the 2-300 per hour suits and get the answers, but I always want to have a certain amount of knowledge prior to meeting the suits. That way , they can iron out the inconsistencies in my thinking.
Keep up the good work moderators, thank you very much for your time and consideration.
Two parting thoughts/shots
If you dont like it, leave
The only stupid question is the question remaining unaskedYep, yack, I cringed too. I didn’t scream at the tv, because I was fairly sure the segment was pretaped[wink] I think jenmans books are fantastic in terms of buying, selling, negotiating, etc.
It all comes down to the dollar. If a sale was made, the agent would have earnt about 2% ($20k), if it was not sold, they would have got zero. This makes the dodgiest used car sale look decidely wonderful.
Its like all of the other agents desperately trying to get their bidders to win the auction. Of course, they would crap on about ‘healthy, strong bidding’ to ‘secure your dreams’, ‘youve come this far’,’another thousand is nothing’. When the reality is this. They might be paid nothing on a missed auction, and half of 2% on a winning bid.
Oh dear, I am about to get myself into some very hot h20.
When one is choosing athletes, one can be totally objective, or subjective.
Years ago, a lot of sports were subjective. Weightlifters had no chance of making the team unless they were very good friends with the coach. There was a female rower who was ousted by her three teammates for another lady, despite the fact that she was not as good in all objective measures. Rob de castella got to defend his marathon despite being way down on the objective list. My problem with this? We usually sent only 2 runners, but made an exception by adding Rob. My problem? What about the third ranked marathon runner BETTER and more able on current form than de castella? Well they miss out.
A bit like Anna Kournikova and all of her wildcard entries. Fair enough when she was a young prodigy, and not really yet up to scratch, but time and time again she got the wildcards. The press loved it, the sponsors loved it, the papers and the tv loved it. So why does wrappack not like this scenario? Because each time she competed, she took the place of another lady higher ranked, with a greater desire, ability to win, simply because of her better looks. Legally, we cannot discriminate against race, religion, sexuality, but we can certainly discriminate to our hearts content over ugliness.
All athletes should know the rules. Those who do not are either extremely naiive or absolute morons. On the weekend brisbane fields and extra player and scores a try. Is there a problem in counting? Why can they not wait for the man to leave the field PRIOR to first stepping on, or is it just lazyness of the coach, team manager and the dickhead who ran onto the field? Idiots in league will continue to do spear tackles and swinging elbows head high. The cost? stuff all fines and maybe a week or two off. The potential damage? Spinal damage. In todays SMH, a scrum collapsed and a player died of spinal injuries (NZ, I think). So wheres the outcry? Old and young players still seem to be of the opinion that the manliness of scrums should not be reduced. Let me ask this. How often does the feeding team win? Almost all the time. 95+%. So where is the ‘competition’ of the scrum? If the ref gave the feeding team the ball, same result almost all of the time with less probs of spinal injuries.
About a year ago, our female swimmers jumped into the pool in celebration, a gesture which is, I feel, the very minimum, very rude. Ahhhh, but after the were disqualified, there is an outcry in the press. Why? Because they ‘won’. But, even in horse racing, first past the post does not always win. Protests can always be lodged by anyone before correct weight is called.
Which brings me round to recent swimming events. I must admit, I love the rule regarding false starts in swimming. Loved it yesterday, and agree that it should be kept today.
Many years back, I remember watching the olympics. The swimming was atrociously boring. Let me fully explain. There was the 2 false start rule. That is, two false starts could occur, and then, if anyone false started after that, they would be disqualified. Thus, if No1 massively false started, then no1 did again, then no6 did, then no6 was disqualified. And guess what happened time and time again? False starts would happen that were so blatently obvious, jumping in lazily by over half a second, and swimming back to the side. In almost all events it happened. It slowed things down to a silly game of tit for tat, I know someone is going to , so I will. On one occasion, I can remember three obvious simultaneous false starts! Made doing the washing interesting by comparison.
The reason for such stringent rules in the olympics is because of these idiots streaching the rules far too often, far too much.
Now, with instant disqualification, there are almost no false starts at all.
So, I do believe that thorpe should have been disqualified. My hat off to him on his graciousness in defeat. I can only imagine the angst and heartache that he must currently be feeling
I really believe that all athletes should face objective measures, but that it should not be based on a SOLE event. Thus, if there were two or three meets that could be used for times, then ones best time should go forward.
THis would allow all athletes to compete on even footing, and allowing for the odd bad day/stuff up.
The reason aus only sends two swimmers is cost, plain and simple. I personally reckon it should be at least three, and probably four for all events. Particularly in swimming where we are so dominant.
Many thanks for your ‘ramblings’ regarding duplexes. Highly informative and feel free to continue to ramble on as much as you like! I am about to attempt a very similar thing north of sydney. I agree with the low maintenance backyard, that is not stencilled concrete in units/villas!
Just a thought. You mentioned it was a wrap to lose money, not a money making one. How much cash do your parents need? If they sell for 400k, they will probably get 385k (after legals+agents). If they give you 350k, they have freed up only 35k. Is this all they need?
How about this. Sell them the house at under market value, and see if you could have an increased share in the estate which they may leave you. They get the bird in the hand, and you get the 3 birds in the bush. But, if they have no other significant assets (which should be deeming) then you are left behind.
Its a tricky question of yours, because they are upsizing and wishing to free up extra cash – much easier to do it the other way around!
Good on you afloat! That many in that short a time starting after the boom could not have been easy!
Could you share with the rest of us mere mortals what your niche is -reno/cp/develop, etc?
Talked to dad re this (a chartered accountant), who said
i) unit trusts-good if you are sure of raising the money (about 10M+). Cant easily raise additional money. Hopeless for my situation.ii) Unlisted company. Easy and cheap to set up, can add cash, use for interest, architect plans, etc. Asset could be revalued after da passes, and shares sold to other people. This would not be a public offer or an ‘add in the paper’, but people that I know, some of whom have expressed some interest in the concept. Company can be agreed to be wound up at a certain point in time, or shares bought.
iii) problem is in valuing the block, and best way is to see what you can sell/value the duplexes at, then subtract what they will cost, subtract the profit margin and interest, and make sure that the block is priced cheaper than that. And I cant yet crunch the numbers because I am only part way through my feasability study (but the gaps in my knowledge are closing!)
Then, decide which way to proceed.
Michael, when you say to use an institutional lender, are you referring to mezzanine finance to make up the gap in which banks will lend?
Must do’s
i) earmuffs- how many thousand bangs in a vacant loud room do your ears want to hear. Likewise with the eye protection and face mask.
ii) Use a shovel to rip up the old bits of wood with nails on them holding the edges of the carpet near the skirting boards.
iii) Just got our floors done, but we should have really ripped up our old shitty skirting boards first. THen, sanding would have gone all the way past the new boards and looked much better. Then again, I may just have to replace the old skirting boards with wider, fatter ones.
Another horrible thought. If you do sell one of your duplexes to the oldies, you will be up for some CGT.
In retaining it, you could revalue it (and your own house) when needing money for another purchase.
Oh what a tricky question, full of permutations and combinations.
Some things to consider (random thoughts of mine)
A saying is never to work with friends and relies (and for good reason). The egos, the friction, the fact that how would one’s father feel if they were an employee to his son, etc.
Other siblings. If you are an only child, then this wrap may work. But, if you are in a family of ten children, how will the nine others feel about their (potential) inheritence?
Remember, occasionally, no good deed goes unpunished.
The word ‘just’ usually means exactly the opposite.
Do you need to sell the oldies home? After all, if their 400k house was rented out, wouldnt this would be almost the same rent your oldies would need to pay you to live in a 450k unit? If that is the case, then you may have saved yourself 35k in stamp duty, legals, etc.
But, If you were to do it this way, they would have to pay some income tax on the rent
I would try to keep all the properties- unless, of course you have a desire to help your fellow australians by voluntarily paying another 35k into consolidated revenue!
BTW, I am fascinated by duplexes, about to do one myself, and am researching everything I can about them. If you could tell me anything regarding planning, ideas, and building times, I would be much appreciated. Please feel free to post here or PM me.
Terry, is that 10-12 % on the whole amount, (borrowed in stages according to the building), or is there a standard variable rate, and then you pay 10-12% on the building costs. (clutching at straws here, and I think I know what your reply will be!)
