From a discussion on http://www.somersoft.com/forums.. the comments are from PT Bear…
“When you have a line of dominos and the first falls over, it pushes the next one over, which pushes the next one and so on. If the dominos are arranged in a pattern, the entire pattern gets pushed over. It looks really cool.
In the context of the property market, this might have a similar behaviour. If one area does something, the surrounding areas feel the effects. As the effect on the first area increases, the surrounding areas also feel greater effect. Then the next lot of surrounding areas start to feel a similar effect and so on.
Because of the pattern of localities in the propterty market, it’s often more like the ripples in a pond.
It’s also really cool, because if you can see the effect and the direction it’s moving, it may give some indication of what’s going to happen in an area where the effect is yet to reach.
Prices started going up quickly in inner city areas (< 7 km from CBD) of the capital cities about 4-8 years ago. Before long, prices in the next range started to follow the price increase and thus the price increase rippled outwards, even to country areas.”
If that’s along the lines of SIS’s domino theory (and I don’t know if it) I’ve been practicing it for a while…
Cheers
rso are you looking back at inner city again?
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Hi Guys,
“When you have a line of dominos and the first falls over, it pushes the next one over, which pushes the next one and so on. If the dominos are arranged in a pattern, the entire pattern gets pushed over. It looks really cool.
this is sorta on the same line, but think linear…
… though what was describe is, is a way to predict a boom, but not really close to “domino effect”
Cheers,
sisdamn
Use equity from paid off PPOR to buy IP1,
then use equity from IP1 to buy IP2,
then use equity from IP2 to buy IP3, etc…closer?
Hi Richmond,
close again, but think linear…
…your idea is great, but looks a bit like cross collateralisation…
Cheers,
sisdamn
I’ll ponder it over a few beers as I watch the Tigers destroy Collingwood and get back to you all tomorrow…
Cheers
rPersonally I’m using LOC against PPOR to make purchases that equate to 100% finance, LOC covers 20% deposit and 5% costs, and then taking separate loans for extra 80% … then our salaries go back into LOC to keep it nice and healthy. All loans are stand alone, not cross collaterised. We’re about a month away from having our LOC chock full again, once it’s there we’ll have approval to get finance that will leave us with between $1.5 to 2 mill to spend… I’m sure our way is no different to what a lot of people are doing.
Cheers
rCheers
rbut wiat, there’s more! you two!
The only thing constant is change
The only difference between a weed and a flower is a judgement
BTW- The specific Somersoft thread in point is here: http://www.somersoft.com/forums/showthread.php?t=15015
And the person who should be credited with the comments is PT_Bear.
Cheers,
Aceyducey
Originally posted by richmond:I’ll ponder it over a few beers as I watch the Tigers destroy Collingwood and get back to you all tomorrow…
Cheers
r26/3/2004 19:40 Richmond 9 9 63 3rd Qtr 18:00 4 4 28 Collingwood
Hopefully it will finish the same margin Go The TigesLook like the domino effect getting longer and Richmond can’t have enough of it…LoL
SIS,
I think Richmond on the right track. Maybe you should give him some hints, otherwise he can’t sleep tonight…LoLKind regards
Chan Dollars
[Retire Young, Retire Rich] [strum]how about this for a domino. You have 5 properties, ‘offset geared’ or whatever. You have a problem with one of them, which could be that you can’t get a tenant, or there is a maintenance issue, and for one reason or another, you need a quick sale. Trouble is, if you sell, even if you come out Ok with the price at fire-sale prices, there is capital gains tax to pay plus a fee for discharging the loan early. So you’re stuffed if you sell, and stuffed if you don’t. No way to refinance, as last time you refinanced, it was top of a boom, and not only are banks tightening their exposure in the case of LVRs, but hedging against values going down further, and besides, prices are slightly down anyway, not to mention borrowing costs higher.
So the domino effect says that if the property portfolio is too highly geared or whatever or too ‘rent reliant’ or a person has an unexpected expense or something happens in their life which means they get behind, they might not only – by having to sell at the wrong ‘time’ in the market cycle – by the domino effect not only lose one property but the whole lot.
So how would the bank let you get in that situation? You just keep starting companies as corporate trustees going guarantor for a trust buying a property. Some ‘legal scam’ which means an individual who couldn’t possibly borrow that much as one entity is able to borrow and borrow and gear and gear because of some loophole.
Am i close?
Hi Mini,
Good guess, but guess is not right…
Cheers,
sisOriginally posted by richmond:From a somersoft discussion
“When you have a line of dominos and the first falls over, it pushes the next one over, which pushes the next one and so on. If the dominos are arranged in a pattern, the entire pattern gets pushed over. It looks really cool.
In the context of the property market, this might have a similar behaviour. If one area does something, the surrounding areas feel the effects. As the effect on the first area increases, the surrounding areas also feel greater effect. Then the next lot of surrounding areas start to feel a similar effect and so on.
Because of the pattern of localities in the propterty market, it’s often more like the ripples in a pond.
It’s also really cool, because if you can see the effect and the direction it’s moving, it may give some indication of what’s going to happen in an area where the effect is yet to reach.
Prices started going up quickly in inner city areas (< 7 km from CBD) of the capital cities about 4-8 years ago. Before long, prices in the next range started to follow the price increase and thus the price increase rippled outwards, even to country areas.”
If that’s along the lines of SIS’s domino theory (and I don’t know if it) I’ve been practicing it for a while…
Cheers
rRichmond..
I always new this effect to be the ‘RIPPLE EFFECT’ as described here regarding property prices going up in one area, be it inner city or a new/large developement or new infrastructure going up, this affected prices in the immediate area, which slowly caused neighbouring suburbs to increase in value, and so on and so forth..
As for S.i.S ‘Domino Effect’.. sorry no help, but curious also[blink]
I’ve thought ‘Laterally before..thinking Linear ??’ HELP….
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Sis, I’ll have a quick guess as well.
May be it doesn’t have anything to do with the physical properties as such, more with your actions? E.g. the first thing you do (e.g. research on an area and the property prices within)) has an effect on the next thing you do (e.g. deciding on your offer amount), which has an effect on your taxation benefits, which has an effect on what you can spend on your next property and so on?I’m probably far of-course here but wanted a guess anyway![blush2]
The perfect nipple i mean ripple.
[baaa]
DomHi Guys,
good guesses, but guesses arent right…
Cheers,
sisPoint taken Aceydeucey… I’ll change it. I agree with the politeness issue.
ps redwing, I knew it as ripple effect too…
Cheers
r
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