Hi
I am a QLD’r (with 4 investment properties in QLD bought in 01-02) half way through Rich Dad’s Success Stories. All examples show absolutly unbelievable positive cash flow returns each month!!These examples are of properties purchased between 00-03, an example of which is a Duplex buy price $70K; Loan (P&I 30 @ 7%) $63K. The rent is at least $420/wk and the loan repayment $419/Month. This person is receiving a net monthly cashflow of $744.00!!!!
Also, many examples cited show vendors accepting offers made that are nearly 1/2 the original asking price (ie price $150K offer $75K accepted) then the investor renovates and resells for $200K!
I have to ask:-
1. Are we looking for ‘deals’ in the wrong country???
2. Has anyone out there ever received a cashflow that high from any property they have ever purchased in Oz even before our 01-02 property boom?
3. How many Oz investors have made really low offers and been accepted? (ie sale price $150K you offer $75K and they accept)Of the 4 properties we own, 3 have a buy price and rent that have allowed us to have rent cover IOnly repayments, insurance & rates. I have found that is about as good as it gets here in QLD and even that is nearly impossible now other than in really remote country towns.
I would be interested in other’s feedback.
Cheers Karen B!
Don’t forget that RK’s aim was to write a best seller. I would suggest that these opportunities are not typical and were the result of some pretty intensive searching.
I would imagine that with the level of IP enthusiasm in the last few years that these are as difficult to find as are examples of the properties Steve bought in his early days.
Just my two cents worth.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I spent 12 months in the US in 1999. Thats when I first started to look at investment properties and looked at their market.
– The cash flow is better in the US mainly because they do not have negative gearing. Investors here in Aust are prepared to pay more for quality property because they can factor in the tax benefits.
– The US has more slum areas. ie areas you may feel uncomfortable if your car breaks down. Therefore someone may inherit a place and just want to get rid of it for any price. You may even get the property NO MONEY DOWN for the asking price.
– In the US people can claim the interest on their own PPOR.
– The US has a population of around 260m people. So there market is larger and more opportunities may abound.
– Most of the US land space is populated too. Many towns, many opportunities.Just my thoughts.
The US banks also have a nifty little system whereby if someone is silly enough to default on their repayments owing say $50,000 on a $300,000 property guess what the banks asking price is – $50,000!! And there’s nothing the owner can do about it, crazy.
Their defense is that if the owner was silly enough not to try to sell the property for more than the outstanding debt before the bank repossess it, tough cheese and I suppose the owners are a bit culpable, but you can see how it would catch out the very uneducated and/or emotionally attached elderly etc. I hear also that there’s a lot of cheap deals picked up under this scenario in towns like Las Vegas where gamblers go belly up fast and lose everything fairly regularly. The delusion of gambling gains has a lot to answer for in this country too – the Aussie banks view problem gambling debts as an untouchable problem, a zillion times worse than bankruptcy for obvious reasons.
Do your homework and invest with your eyes wide open for some weird opportunities appears the key.
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Mel
[email protected]Yes the yields look good on paper and higher than OZ, but the expenses are higher.
(Any country is better than Oz for cashflow)
For a block of flats expect a net yield of 8-9% (after expenses) in Florida, Texas. Forget California. Neg cashflow.
You can get 20% plus yields in north east New York and properties (duplexes/triplex) as low as $20,000, however you will have zilch capital growth, and declining population.
Finance isnt easy, but not impossible for non residents.
Im looking to buy there in the next 3 months.
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