I have read steve’s book and loved it. What he did in 3.5 yrs is fantastic. However, its a misconception that steve and his partner went from 0 to 130 properties in 3.5 years.
Banks have 1000’s of people who have borrowed money from them to buy houses. But the banks don’t say we own 1000’s of properties. Techincally they do.If you can’t continue with the loan repayments ie you forfeit your contract you lose the house. Y? The bank holds the title to the house.
Steve has gone from 0 to 130 properties using WRAP’s. He has the title to the properties but has none of the responsibilities in the maintenance and up keep to the properties. Just like banks don’t. Steve is the middle man. He makes 2-3% in interest on the money people borrow, just like banks do. If it wasn’t for this method steve wouldn’t have done or come close to what he says.
If steve purchased 130 properties at 50 000 and paid 10 000 (20% of each property and we ignore all the other added costs) for each property.
Then he needed to have earned or had 1 300 000 in 3.5 years.
If he makes 50 week for each propery. Then he will make on the 130 properties 338 000pa. The interest to be paid on the 5 200 00 borrowed at 4.5% (bit lower than current rates) will be 234 000.
Steve is left with 104 000 and tax has to be paid on this money.
(All other expences such as land tax, rates etc haven’t been included).
If the tax paid is averaged to 25%(more might have to be paid) 26 000.
Steve and his partner are left with, 78 000.
They will each end up with 39 000.So take home pay will be 750 week if there are no added costs.(and there are, heaps of them, vacancies,even a few of them , repairs, even if there cheap, we are talking about 130 cheap properties…etc)
People make this kind of money now… without the headache.
Can’t be done, and if you had 1.3 million to invest you’d be a fool to do this.So steve with his accounting business/background he has become the middle man and works like a bank. The buyers (ie renters) wear the costs .
Good luck to him, but we should not get too excited about PI.
Just to get you off the paradigm, our (Steve and I) portfolio consists of wraps and buy and holds.
It can be done!!
Dave
Michael you’re not concentrating! argyle was showing what it would have cost if Steve didn’t use wraps. Dave dare I ask what percentage of your properties are wraps?
JI have to agree with Arygle, if Steve hadn’t used Wraps, and done some quick buying and selling to generate quick capital then it is impossible for accumalate 130 properties in 3.5 years.
I think a lot of people are maybe under the illusion that all you have to do is find a +ve investment property, rent it out, and you’ll be home dry. If that is all you done, it will be a very slow road to wealthy future !
Michael,
No where in the book does Steve quantify the number of wraps, b&h, and leases he has. So where you get your figures from I don’t know.
The book eludes too that a majority of his wealth was done through b&h. Only towards the end does he talk about wraps, and leases. If there was a Joe Average on the street, the book would give the impression that b&h was Steve’s main strategy, but this is far from the case.
Steve has been very clever in composing and structuring his book, as well his marketing. Good on him, I reckon.
I also look at it in a pragmatic point of view. 3.5 years ago he started his venture. He has made significant money, but being a prudent business person I am sure he saw that the property market was slowing and exceptional deals were getting to hard to come by.
Steve throughout his book is an advocate for making money with least effort. So considering the property market, and Steve being a smart guy, he has now sold and marketed the strategy he had been using for the last 3.5 years. Whether it is applicable now, well… it probably is but not with the rewards that Steve initially reaped… ie. it takes alot more time and effort, and the rewards are probably smaller than 3.5 years ago. So Steve has compensated for this now, in doing the book !
Smart guy if you ask me
Thats my morning thoughts
Cheers
Rob
I think you will find Steve and Dave’s mix is more like 40 wraps the rest Buy and Hold. Also not all would be residential.
Also, Steve never says that he owns them all at one time, he has control over them then gets cashed out does it again. Holds a seminar…does it again, sells some books…does it again.
And keeps playing the game!
P.S. Why r we all so concerned about what Steve is doing instead of doing something ourselves.
I also look at it in a pragmatic point of view. 3.5 years ago he started his venture. He has made significant money, but being a prudent business person I am sure he saw that the property market was slowing and exceptional deals were getting to hard to come by.Steve throughout his book is an advocate for making money with least effort. So considering the property market, and Steve being a smart guy, he has now sold and marketed the strategy he had been using for the last 3.5 years. Whether it is applicable now, well… it probably is but not with the rewards that Steve initially reaped… ie. it takes alot more time and effort, and the rewards are probably smaller than 3.5 years ago. So Steve has compensated for this now, in doing the book !
Smart guy if you ask me
Well said. [
]you should read think and grow rich by napolean hill
Argyle610
It’s great how you can become such an “expert” in Steve & Dave’s business, simply from reading their book!
You obviously have it all worked out.
The only thing, you are quite incorrect.[
]Del
Ultimately everyone’s right! Steve, being an asute businessman, leverages his skills and expertise to produce various income streams and optimise income while spreading risk. The book etc. is part of that.
Anyone who has hit upon a system to make serious money keeps it to themselves until either
a. They have enough money, or
b. The system is no longer as profitable or as applicable as at first.Either way, the best way to profit further is to sell the system to others. This is what Steve has done and good luck to him.
I have learnt a lot from Steve’s book. Yes, I was disappointed that the majority of his properties were wraps – as I am seeking a long-term buy and hold strategy, for income and capital growth – and wraps don’t give you that. But nevertheless the value of the book far exceeded the cost.
And yes – putting the strategy into a best selling book does increase competition for potential properties, but the good news is that 90% of book buyers never read past the first ten pages!.
Cheers[
]I can’t believe people got too much negative thoughts about PI and Steve etc. why all are worried about 130 property in 3.5 years. Have you seen lot’s of people buying even 30 IP in 3.5 years. Guys learn what he wrote add your tricks and other people tricks ( read books, attend seminars etc ) and create your wealth your way. On top of that stop thinking negative and if you are with negative mind then 9 to 5 job is best for rest of life.
Amit
Well said Amit !!
Del
c’mon amit
its funny now we are having the same discussion about steve as we were about rk (rich dad) earlier on in the week
qte
I think a lot of people are maybe under the illusion that all you have to do is find a +ve investment property, rent it out, and you’ll be home dry. If that is all you done, it will be a very slow road to wealthy future !
unqte
im sorry but this is my feeling aswell
good to see some critical analysis on the forum.
if steve is a good bloke which im sure he is, he wont take it personally. maybe its a monster a little out of control that needs some clarification
cheers
Amit,
You are reading the posts incorrectly. People aren’t being negative, or worried about Steve. I am sure no-one on here could give two-hoots about Steve and what he does. They are just exploring, commenting, and sharing opinions about the book.
Its good to talk, and get different views from others.
Rob
Hi All,
I know some people who bought more then 100 property in short period of time. I am not saying that they used their own money to put all the deals but they control that many property and keep on buying more. I think it’s all depend how hard we are working for properties ( may be term change from investment to business for these people )and how much risk we are ready to take.
Good luck!
AmitI have enjoyed reading all the healthy dicussions. It’s good to see that Steve’s book if anything has made us think about our money, how we use it and how we get it to work for us.
Unfortunatelly we all don’t have time on our hands or the funds to travel 130km out of the city to find these gems, let alone interstate, on the weekend.
This shouldn’t stop us from buying IP’s, but we should be a little more realistic.
Hey all.
Brian don’t be to disheartened as Steve and Dave’s mix is not a majority of Wraps, rather of buy and holds.It is an interesting discusion though and I just couldn’t hold back. Haven’t been on much lately as I have been busy but this one caught my eye.
As I was reading I was thinking that the numbers and the structure are somewhat irrelevant. For Steve and Dave it has been Wraps and Rentals but for me it has been rentals and renos (not that I am in Steve and Daves league). Over the last year and a bit we have bought/buying 25 properties. We have sold 5 of these as well. Could I have bought a lot more along the way….too right but I allowed my self doubt to win in the early days.
Numbers and approach/style are irrelevant but they are good to show you it can be done.
You have to find your own niche and comfort levels and invest there. Don’t try to be another Steve or Dave as you are a very special person yourself and you will know your own levels of need and comfort in investing.On this site we have heaps of great people all with different approaches and different ideas…
Crashy does shares, Steve rentals by the dozen and Mini in NZ to name a few.It is good to see discussion as Argyle said and lets take it as a gee up and get active in what investing is right for me…..or is that you????
Enjoy
AD [:0)]
(Andrew)“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”
Well said AD,
Everyone has to find their own niche. And as you progress, you’ll probably find that that niche will grow and expand as knowledge and experience increases.
Rod.
Argyle610It’s great how you can become such an “expert” in Steve & Dave’s business, simply from reading their book!
You obviously have it all worked out.
The only thing, you are quite incorrect.[
]Del
I think Argyle is stating what a lot of people are thinking when they read these forums and he has expressed an opinion that has benefitted the readers.
I really think Del you should read what is said before you actually post a reply as you seem overly defensive of of anything you perseive as negative against Steve. All the posts ive seen you jump the gun on have actually lead to very constructive postings in this PUBLIC forum.
The other thing that people should probably recognise is that Steve has not bought 130 properties on his own. He has a partner, Dave.
In comparison, it is probably more fair to say that he has bought 65 properties in 3.5 years, being his 50% share.
If you know what I mean. [
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