Hi Guys I wonder if you are able to help.
I have been to one of Steve’s seminars and bought the Wrap Library which I have found good. We have sorted out our affairs by selling a negatively geared property that was costing us too much money.
Enthusiastic and with finance organised we have been looking for properties that fit the No Brainer Plan on the video.
We have found a number of properties that meet the 11 sec solution but when you run all the numbers, you usually get about 9% cash on cash return. Watching the video again I can see that the example was used with a house for $50k renting for 140pw rent.
The best I can find so far are ratio’s like a 70k house that rents for 145pw in rural NSW towns like Wagga Wagga.
I guess what I want to know is, are you guys just low balling properties like the example above in order to get the ratio right?
Am I just not looking hard enough? (I looked at every place for sale in Wagga)
I know it can be done but my wife and I are getting a little discouraged as we cant seem to make the numbers work.
Would someone be able to post the figures for a real life deal they have done so that we can see what we should be looking for?
We currently just wanted to start with rentals to test the water before we moved onto wraps.PS. My wife has made an excel spreadsheet that works most of the numbers out in the financials eval sheet. If anyone would like it I would be happy to email it.
Thanks in advance
Peter
Hi Peter,
I’m not sure what the NO Brainer Video is even though I have the wrap kit, maybe I missed that.
Have you put any offers in for these houses or are the prices advertised the prices you are using for your calculations?
Steve might correct me here, but not always will the calculations fit the 11 second solution. The interest rate might also make a difference to the equation.
I’d love to have a look at your wife’s spreedsheet. I’ve been waiting for 6 months for my husband (who’s into computers) to get one together [
] !!!Are you going to Steve’s seminar in Sydney?
Cheers
Sooshie [
]It’s all our imperfections that make us perfect!
No Peter, you wont find people are lowballing to get 50k properties. The real estate market has moved in price, but the rent has stayed the same. Your deal looks ok to me as a straight rental. Dont get to wound up about 11 sec rules or you will suffer analysis paralysis. Just go and do it.
Thanks for the replies guys.
Sooshi:
The guys mention a straight rental plan called the No brainer passive income plan on the “milking not being milked” video in the wrap kit. In order for the plan to work, you basically need a cash on cash return of 37% (or 50per week net) on each property with a total of 20 properties to get a $100 000 passive income at the end of 10 years.Im finding that a cash on cash return of 37% is … well, very challenging to find.
I am working the figures out on the asking price. If Im looking at a house for 119k thats renting for 245pw , maybe I could get them to knock off 10k but even then its not going to get anywhere near 37%.
Ill send you the spreadsheet now. The only thing to watch out for is I havent figured out the formula for the loan monthly payments yet so you will need to use one of the online calculators and then enter it manually.
Darren:
Dont get me wrong, im keen as beans to get started, but my enthusiasm got me into a negatively geared property the first time (An expensive learning experience to say the least)I vowed that I would do my homework properly before I buy the next one. Im just frustrated that I cant find even one that comes close to the 37%. I know Steve says he has done much better than this, but it seems it must come down to some heavy negotiation on price?
If anyone is interested, I wouldnt mind posting the numbers as a case study to see what would need to happen in order to get the necessary returns. Wagga’s a 5 hour drive for me from Sydney so I want to get it right before I drive down there again [
]Hi Peter,
It would be great to see the numbers. I’ve got to check out the video…not sure I got it..will find out.
Let me know when your sending spreadsheet.Cheers
Sooshie [
]easy access email to me [email protected]
It’s all our imperfections that make us perfect!
Hey Pug,
Great to hear that you are getting things in order. I Think you are doing your due diligence vaery effectively from the sounds of it. In practice I started out religously using steve’s calculators and such in the memebrs section and was disappointed that not many deals fit the bill but what I did find was that it made me think about ewach deal more and more and over time I could start to do deals in my head. I still use the 11 sec solution for my realllly basic think but now I look at the deal and think where does the profit lie in this deal? What is my exit strategy going to be ? Am I interested in this deal and what it has to offer ?
I am currently negotiating deal nnumber 7 (I started 6-7 months ago) and am finding I enjoy the challenge of looking behind the deal a real buzz. For eg. the other day I saw a house for $90K needs reno on a 32 perch block. Other done up houses are selling for $150K(this one is a better property and would fetch around $q65K). From my experience of just about having finished my first reno(builder doing it) I know the reno will cost about $25-30K. This says to me that it is worth doing. This house is also a two street frontage and a block in this part of town sells for $50-60K. So even if subdivision costs me $15K (ish) then I put a removal house on the block and fix it up too. I could wind up with two properties worth around $300-330K and it has cost me around $180-200K.
I guess the key here is to find what you are good at. If you re still dead set on the no brainer you may have to wait for the right deal or hunt a little harder but you may also just need to thnk a little laterally. The rent from these deals would be worth around $400/week (both) so they would still meet the eleven second solution and I would have great equity in the deal. I have bought other properties and would be glad to share the numbers if you would like and the reasons behind the purchases so let me know if you want to here more of my rambling thoughts.
In summation it is b=very hard to get deals that turn the numbers Steve was talking about and I think that if you ask Steve he would agree. You may still find them but they may require a little travel (or a lot) as you suggest. Whatever happens don’t be disheartened just keep plugging away and you will find your deals and after one they do become easier…sort of.
Hope this helped.
Enjoy
AD [:0)]A great deal of talent is lost to the world for want of a little courage. Every day sends to their graves obscure men whose timidity prevented them from making a first effort.
-Sydney SmithThanks AD,
I found your post really helpful and encouraging. 7 deals in 7 months? Thats the sort of momentum I want to get going.
Sounds like Im doing the figures right but need to be a little more creative. I would really appreciate the numbers on some of your other deals if you have them in soft copy and its not too much hassle.
my email is [email protected]The Reno sounds like a great idea. You could depreciate the improvement as well.
So when you bought the place, did you just say “I want an extra $30k to improve the property” and they add that onto your original home loan? Or did you just fund that seperately?
I want to try and buy a property this month to get the ball rolling. Ill let you know when we get the first one.
Thanks again
Peter
Glad it encouraged you Peter. You are your greatest asset and after many deals (I’m not there yet…) you will spot them really easily. Keep looking and reading and asking questions. I did. Steve’s info is great and it will help you now look for other stuff to broaden your perception. Use your library to the fullest extent….(my library card is always on fire from overuse).
I will send an Email sometime when I have a chance to. Must go the wife is looking threatening…Hope all are well and this week provides awesome challenges and opportunities.
Enjoy
AD [:0)]
A great deal of talent is lost to the world for want of a little courage. Every day sends to their graves obscure men whose timidity prevented them from making a first effort.
-Sydney SmithHi,
Just a word to clear up the confusion re: the video.
When we did the Wrap Library we did it in two releases.
Version one came with Video and audio (CD and Tape)
Version two came with audio (CD) onlyWe made the change for two reasons:
Reason #1: The cost of packaging with videos was very high and the caddies that we used were difficult to store easily.
Reason #2: People seem to want the audio more than the video.
Sadly all of the first versions have sold out making them somewhat of a collector’s set. Never thought I’d say that about something I created.
Regards,
Steve McKnight
P.S. As for the numbers… I agree with Darren. Don’t get too hung up about the 11 sec. solution. This is just a filtering tool and not a law unto itself. I’d be asking how you can get a better return from deals close to the line. And that’s what the Master’s seminar is all about.
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Pug:
quote:
ll send you the spreadsheet now. The only thing to watch out for is I havent figured out the formula for the loan monthly payments yet so you will need to use one of the online calculators and then enter it manually.The formula you are looking for is :
PMT(Interest rate per payment, Number of Payments,Amount borrowed,Ballon payment,Advanced/Arrears).eg. For a loan of $160,000 over 25 years at 7.5% repayed monthly in arrears.
PMT(7.5/12, 25*12 , 160000, 0, 0) = $1,182.39
Hi there,
Thanks Steve for clearing up the video bit. I spent 2 hours thinking it had gotten mixed up with my son’s collection of Teletubbies and Thomas the Tank Engine videos. No wonder I didn’t find it! [:0)]
Okay, so the next point is. Anyone want to lend it to me, so I can watch it. I’m more of a visual person, considering my mum is deaf in one ear and my dad deaf in the other, their voices were pretty loud and as a result, I think I’m going deaf. Or is it just selective hearing…hmmmm? [
]Peter, could you email me the spreadsheet again please? I’d like to have a looky looky.
Have a great time all of you heading up to Sydney
Cheers
Sooshie [
]It’s all our imperfections that make us perfect!
Sooshie,
I emailed it both to your hotmail and yahoo adresses awhile back.
Did you spell your yahoo address wrong, because you should have received it. I also sent it to [email protected]
As this was the most logical typo.Which state do you live in?
Im in Sydney and can send you the tape if there is no one closer.PS. Thanks for the formula askegg. Ill give it a try
Hi Peter,
Emails were never received. I have high filter on so I made new email at yahoo.
[email protected]
or [email protected]Let me know if you get a return to sender message. I wonder if anyone else had this problem emailing me?
Cheers and thanks for trying [
]Sooshie
p.s. Sooshie is not always very logical!!! [
]It’s all our imperfections that make us perfect!
ah sooshie….I wish I could watch Thomas the tank….
Some of us with daughters are confined to the world of Hi-5, Rocfish and the wiggles. And joy upon joy my daughter (4) discovered Nikki Webster the other day……yahoo…..All a bit much for someone with 3 brothers and all male cousins. Oh well I love them even with Nikki Webster on the CD….
Enjoy
AD [:0)]A great deal of talent is lost to the world for want of a little courage. Every day sends to their graves obscure men whose timidity prevented them from making a first effort.
-Sydney SmithHi AD,
I think I’ll stick with Thomas and the Teletubbies thanks… Hi-5’s okay although they’re a bit too ‘plastickie’ for my liking.
So where am I going to get this video to watch???
Email me if you can spare the copy for a couple of hours [
]Cheers
Sooshie [
]Hey all, look at the time… [|)]
It’s all our imperfections that make us perfect!
] !!!
]
]
]The topic ‘Having trouble with the numbers’ is closed to new replies.
