Hi to you all ….investors
firstly just like to say how much I enjoy this forum Im just a P plater investor (very passionate one ) …….and I got a question for you … joint ventures ?? has anybody got nightmare stories or good expiriences out of them ?
I personally think its great to pool your knowledge with someone else provided you get on well and trust each other.
some poeple are money rich /time poor so then team up with a money poor /time rich /knowledge rich person what a great way to speed up your wealth…..however I had a different idea and I would love your opinion on this ..I feel I AM money poor/time rich (now that I left my carreer for good)and aaaalmost knowledge rich some times I feel I have analysis paralasis as Steves puts itanyway I have this very good friend that is very successfull with his day traiding does it full time now and making heaps of bicci’s[computer]as he is so disiplined (no fear or greed )he actually won a shares comp which is not an easy task this is so wonderful to see as he is such a deserving person to say the least.
well the other day I made a proposal to him …no I DIDN’T get out a ring !!!
I offered my knowledge on property for his exertise on multiplying money for deposits he would have to place the same money down as me but of course the joint venture would mean the properties belong to both of us…dose this sound fair??
he doesnt have time to look for property because he is so absorbed in the share traiding game and also seams to think his shares will exelorate his waelth faster that property I told hime he was wrong and needed to diversafy his wealth to 70% prop 30% shares or aleast there abouts he seamed keen on the idea at first but days later he said “why should I get off a concord to take a train !!! that comment blew me over maybe he doesnt beleive in my ability OR he simply doesn’t realise how damm good property can be provided the right choices are made…….well not sure to tell you the truth whether I should pursue this idea…..my prioreity is to keep the good friendship …
thankyou all for reading and sorry for bad spelling [blush2]At a bare minimum he should have a sperate trading account and a ER (emergancy) account, so if he ever has draw downs (when he loses money) he has got money in the seprate account to support himself. The best traders usually risk less than 0.5% when using their RE account (0.5% of protfolio on single trade). I suggest he checks out a guy called Van Tharp (excellent money mgm’t techniques for stocks/options/etc – see http://www.iitm.com/).
As for Diversification – some call it Dwarfication. because it can dwarf your returns. Also who decided what asset mix is best for him? I know some traders who have about 3% of their wealth in property. The rest is in the market…
Also what experience in property do you have? When I talk to potential investors I show them deals I have done (with figures – CoCR), how I have tried to limit their downside, I also show them potential deals I’ve got lined up or ones that I had to pass up. You also need to know how to structure the deal properly (with legal contracts).
If you can’t show them the above – you shouldn’t be raising funds.
You esp. shouldn’t be raising funds if you can’t detail the upside of property either.
Rgds.
Lucifer_auOriginally posted by ridi:[purple]I offered my knowledge on property for his exertise on multiplying money for deposits he would have to place the same money down as me but of course the joint venture would mean the properties belong to both of us…dose this sound fair??
In terms of financial commitment this seems a resonable arrangement – the question is do you both have similar capacity to raise the finances and a simialr desire to invest in property at the same rate?
he is so absorbed in the share traiding game and also seams to think his shares will exelorate his waelth faster that property I told hime he was wrong and needed to diversafy his wealth to 70% prop 30% shares or aleast there abouts he seamed keen on the idea at first but days later he said “why should I get off a concord to take a train
It seems to me your friend is experiencing a degree of success with his current investment choices and as such will stick to what he knows, or will require some ‘educationo’ about property. A ‘throw away’ line will rarely convince someone to throw their hard earned into something new.
!!! that comment blew me over maybe he doesnt beleive in my ability OR he simply doesn’t realise how damm good property can be provided the right choices are made…….well not sure to tell you the truth whether I should pursue this idea…..my prioreity is to keep the good friendship …
It is possible that property is just not ‘it’ for your friend. If this is the case focus on the friendship and do what you believe is right for you. Alternatively you may have to get some runs on the board to show him what can be achieved – but at the end of the day there are people who invest only in shares, or those who only invest in property and then there are those who have a bit each way.
sorry for bad spelling [blush2]
You can get around this issue by typing your post in a word document and then cutting and pasting it into here
Hope this helps.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Thanks guys for taking the time to reply and the good advice …much appreiciated.
My idea is only just thought up so it needs lots of fine tuning not to mention knowledge on the legalaties…but i beleive it will be worth it.
the other day he told me the idea has been growing on him so he must be giving it some thought
I decided to purchase some more property for myself first to gain more expirience first not to mention more education[grad]Originally posted by Lucifer_au:
Also what experience in property do you have? When I talk to potential investors I show them deals I have done (with figures – CoCR), how I have tried to limit their downside, I also show them potential deals I’ve got lined up or ones that I had to pass up. You also need to know how to structure the deal properly (with legal contracts). If you can’t show them the above – you shouldn’t be raising funds. You esp. shouldn’t be raising funds if you can’t detail the upside of property either. Rgds.
Lucifer_auHi Lucifer
I found your post so good I copied it to my “Forum Gems” Word file to remind me to check out the Van Tharp fellow you mention. But hey, give poor Ridi a break, mate. She says she’s just a P Plater:
“Firstly just like to say how much I enjoy this forum I’m just a P plater investor (very passionate one)”…and I know you probably didn’t intend coming across like a hard nailed professional who tells it like it is, but we all have to start out somewhere, right? From your always excellent posts, I know you better than that. Don’t frighten her away, okay?
Ridi, for my money, I loved your post. My advice? Keep reading, don’t skimp on spending money on seminars and you too will one day soon have the track record as a professional investor that Lucifer and many others on this forum have. Go for it, girl!!
Cheers
GregHi again Ridi
In case you haven’t already been “adviced out”, I thought I’d copy another post I put on a recent forum to Immortality, a keen property investor like yourself.
Lucifer ALWAYS gives good advice, so listen to him too, okay? (come on Lucifer, show Ridi your funny bone [biggrin][cap])
Cheers
GregOriginally posted by yack:
Make sure you also read Peter Spann and Jan Somers to get a well rounded view on property investing.Hi Immortality
As you’re obviously DEVOURING and LOVING stacks of books, my tip is to spend approx $2,000 to set up your legal and tax structure asap (ie., don’t make the mistake many of us on the forum made when we started out of skipping the 2 most crucial steps: 1. Goal writing and 2. Getting your structure right, namely set up your Family Trust).Note in the beginning of 130 properties, Steve and Dave wrote out their goals and set up their structure, and only then did they “go for it”.
The absolute “must reads” are Steve McKnight, Rick Otten, Peter Spann, Jan Somers and Dale Gatherum-Goss’s “Trust Magic”. There are a few books out there on trusts, ALL of them totally mind boggling EXCEPT Dale’s books. I paid a discounted $168 for both his books (Trust Magic and Tax Battles), and they both have pride of place on my PI bookshelves, alongside Steve’s Wrap Pack and Rick Otten’s Wrap Pack.
If I had my chance to start from scratch again, my wife and I would JOINTLY:
1. Stop pinching pennies and set aside around $5000 – $10,000 for our self education RIGHT AT THE OUTSET (ie., where you are now).2. I strongly encourage you to go to Rick Otten’s http://www.webuyhouses.com. Click on EVERY link, download all his raves, read them exhaustively and get yourself off to one of his “Boot Camps” asap (Rick’s an aussie, despite the Boot Camp jargon). He’s awesome (and in case you were wondering, I have no connection with either Steve or Rick except as one of their many highly satisfied clients).
3. AFTER attending the Boot Camp, value your relationship further by jointly WRITING DOWN your Goal Statement (see Steve’s book, and pay $695 to buy Steve’s Wrap Pack: 3 months ago it cost $2,195: BARGAIN!). My JV partner and I are going through this Goal Setting exercise right now. Not many do it, yet ALL the guru’s urge you to do it. If you’re REALLY serious about amassing an awesome portfolio, DO IT!
4. Do not pass Go, do not collect $200 until you have completely fulfilled Steps 1 – 3 above
5. Carefully check out the distinction between a Hybrid and Discretionary trusts re which one allows you to offset -CF income as well as +CF income
6. Check that your accountant (and Mortgage Broker, by the way) is what forumites call “+CF savvy”. Not many are, and it is CRUCIAL you get an accountant + mortgage broker who GENUINELY fits this description. The mortgage broker should also be able to source “full disclosure wrap finance” at the drop of a hat. If your broker can’t do this, or asks dumbly “What do you mean?”, get the hell outta there fast.
If you’re married or in a strong relationship, the “togetherness” aspect of both of you going along this exciting journey together is important. It really helps if you are of one mind, united in your determination. My wife and I, plus our 20 year old son, set aside 3 nights a week to JOINTLY study Steve’s Wrap Pack, listen to the CD’s, and take personal notes. We started with 1/2 an hours private reading time for each chapter, then switch on the CD, and take personal notes.
Hope this helps
GregHi Greg
Tried to access the above site but only got this
You are not authorized to view this page.Any ideas
Regards
Although, I’ve had a quick look and it seems to be a steer to another real estate perhaps? I dunno.. i’ll have another look and tell you otherwise if i’m wrong.
Cheers!
Tam
Originally posted by timtam:http://www.webuyhouses.com.au Although, I’ve had a quick look and it seems to be a steer to another real estate perhaps? I dunno.. i’ll have another look and tell you if i’m wrong. Tam
Hi Muppet and Tam
You got me on that one, Muppet. I’ve never had any trouble getting onto it, so can’t figure. If you keep having trouble getting onto Rick Otton’s
http://www.webuyhouses.com.au , try some of his other sites:
http://www.rickotton.com
http://www.rent2buy.com
http://www.financiallyfree.com.au/rent-to-own.htmI always seem to misspell Otton (correct) with Otten (incorrect). Terrible, especially since I write Spelling books for a major publisher! (Shame!)
Cheers
GregHi Derek ! thanks for your post
My day traider friend has always wanted property I told him he should of puchased some years ago with little money down and his eqiuty would of grown.(money for nothin …checks for free[strum])Anyway …my opinion for what it’s worth you must always have property BUT yes there’s a huge BUT(haha)always sand bag yourself by having some shares on the side IF unforseen expenses accur which really can put you in a pickle if your income won’t cover it (major panic[ohno]) of course shares are very liquid …you can have your money in 5 seconds if you so wish… carnt do that with the ol bricks and mortar !!!
when I get the joint venture plan together which won’t be overnifgt but it will happen[hair2]
then I’ll lay it all down and talk turkey to my day trader friend.
Mr greg f
thankyou for the sweet comments and thanks for that extra infor….I actually copied it one other time because it looked interesting I’v been sponging good information on this forum it’s totally auwsome[suave]
greg you are very lucky that members of your family are equally as passionate as you thats wonderful may all your dreams come true[party]
all the educational resourses you mentioned are at the top of my wish list some I’v covered already
EXELLENT ADVISE greg but tell me …with finance so easy to get theses days are wraps really really really in demand….I hope you say yes because I would love to take the Rick Otten boot camp ..he adds humour too.. which is good” happy investing its the best thing “
Originally posted by ridi:Mr greg f Thank you for the sweet comments and thanks for that extra infor…. I actually copied it one other time because it looked interesting. I’v been sponging good information on this forum it’s totally awesome[suave] EXELLENT ADVICE Greg but tell me … with finance so easy to get these days are wraps really really really in demand….I hope you say yes because I would love to take the Rick Otten boot camp ..he adds humour too.. which is good
Hi again Ridi
A few key points about wraps:
1. After dutifully preparing, studying, networking, linking etc, we’re almost ready to do our first wrap. This, however, is linked to a detailed 5 year plan currently being finalised with our JV partner involving many, many, many wraps (I’m just a school teacher, but I’m also an experienced investor currently getting into land sub-divisions).
2. Wraps will always be in demand. As house prices keep increasing, entry to the property market is fast getting out of reach of millions of aussies who desperately want their dream home. Wrappers provide a crucial service to this large group of people.
3. Wraps make you money REGARDLESS of the state of the market. With wraps, you can generate +CF in rising, falling, and static markets. Average people in average jobs need a way to keep buying lots of properties when servicability bites most property investors on the rear end.
4. Growth makes you rich, cashflow doesn’t. CASHFLOW FROM WRAPS ETC HELPS YOU SURVIVE, BUT NOT GET RICH. I copied this recent post from Terry @ Discover Home Loans into my “Golden Gem” MS Word file. Terry has a high profile on this forum. He’s an experienced wrapper lamenting the fact that he sold an excellent house (his PPOR?) in a rising market when he would have been better off holding onto it. I assume he’s still doing lots of wraps, especially as the market has now gone bellyup /static:
“Don’t do it! I sold a good home about 3 years ago to ‘wrap’. If i had held onto the bloody thing I would be rich now. Wraps only produce a low income for the risk and work involved and you don’t get much of the capital gains. Growth makes you rich, cashflow doesn’t. Cashflow helps you to survive, but not get rich. Terryw Discover Home Loans”It’s crucial that you get to your bookshop and read Peter Spann’s “$10 Million Property Portfolio in 10 Years”. You need a balanced perspective (+CF with -CF). Spann’s growth focused, and very scientific about it. I especially love the way he uses median prices to work out
a) Which suburbs he’s going to buy in and
b) What stage of the property market he buys into specific suburbs.Brilliant, inspired use of statistical data.
Cheers
GregThanks greg f
that is exactly what my thoughts were about wraps
capital gains is king[king] providing its not N GEARED
ALTHOUGH FINDING THE CAKE AND EATING IT TOO IS TRICKY
reading Peter Spann at the moment…top stuff Ive been wanting to buy it for a while..what he says about leap frogging is so true ..your either helping someone else with their sucess or in control your self.
I admire you for having to juggle work with mastering the art of investing …I hope it gets easier for you soon as I know what it’s like to juggle…..aTleast you got a good chrissie break comming !![xmas]…….catcha later from the P PlaterYes, capital gains is great, but don’t discount the value of cashflow. Nearly 3 years ago, when I started on the wraps journey, we could have bought one, maybe two more properties maximum, hopefully with a little bit of positive cashflow. We’d have had some good growth (hopefully!), but hubby would still be slogging his guts out 70-100 hours per week in a job he hated.
Thanks to wraps (and a nice package!) hubby has been studying full time this year, and will be going on to work with primary age kids at risk – and is unlikely to be paid for it.
Wraps has made this possible – the ongoing cashflow has replaced his job income.
Has it made us rich? Nope, not yet. But it’s made us time rich, and that’s worth a huge amount.
My next goal is to take the cashflow and start to build our buy and hold portfolio which will generate the long term wealth, including capital gains.
Everybody who comes to property investing is at a different point in their life, with different dreams and goals. You have to look at what your most immediate goal is, and work out which property strategy will get you there the quickest.
My 7yo son summed it up best the other day – he’s seen both sides of the coin now – “mummy, I’m glad you have lots of houses that make us money, because I never want daddy to go back to a job again”.Keep smiling
Felicity
Originally posted by FW:Everybody who comes to property investing is at a different point in their life, with different dreams and goals. You have to look at what your most immediate goal is, and work out which property strategy will get you there the quickest.
My 7yo son summed it up best the other day – he’s seen both sides of the coin now – “mummy, I’m glad you have lots of houses that make us money, because I never want daddy to go back to a job again”.Hi Felicity
What a great story!!! I love your happy, [cap]optimistic, [biggrin] uplifting [bonjour]outlook. Newbies will be impressed (not to speak of we old timers).[buz2] Keep up the lovely posts
Cheers
Greg[blush2]
Keep smiling
FelicityOriginally posted by ridi:.you can have your money in 5 seconds if you so wish… carnt do that with the ol bricks and mortar
Hi Ridi,
If you set yourself up with a LOC you can access the required money very quickly and easily, and retain the asset, if ever required.
We have some spare cash available in a LOC that we keep up oour sleeve. This is separated off into a separate LOC so that we can use the money for personal expenditure if the situation necessitated such an input. This way our personal and investment expenses are separated and we can identify interest payments easily and also can pay back the ‘personal expenditure’ without compromising oour investment deductions.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
HI FW ,thanks for your post !!it was interesting and yes true wealth is having time (and joices)
I ve been raking my brain in deciding whether or not to spend the money to educate myself on wrapes esecially because I feel If I spend another cent on educational stuff hubby will freak out[angry2]
My line to him when I just purchased on expensive resource is “babe we carnt afford NOT to do it”
sound convincing !!well it’s true[eh]Derekthanks for the info I find the finance side of things very tricky but thats how they (the banks )want it to be[evil5]
thanks for your reply[specool]Originally posted by ridi:the finance side of things very tricky but thats how they (the banks )want it to be[evil5]
thanks for your reply[specool]Hi Ridi,
That is why having a good broker as part of your team is fundamental to your long term success. They will get you organised correctly from day one. Suggest you email some of the brokers who regularly post here – they should be of assistance.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
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