Hi – I have been investigating my local area of Newcastle NSW and have yet to find a property that obeys the 11 second rule. So of course I keep looking but I was wondering if the 1000 multipler should not be more like 1500 or 2000 for the current year. My reason for this is property prices have increased since time of print.
Example of what I’m trying to say. The place I rent is $280 p.w. By the 11 second rule (280/2)x1000 means the I should pass it up if the sale price is more than $140,000.
Now the house next door that is exactly the same sold for approx $300,000. Too much if you ask me, as I think they could have negotiated to $250,000. And thats before reading McKnights books.I’m new to the game but see the property would never even get close to the 11 second rule result of $140,000. Does anyone have any comments to clarify this for me?
Thankyou,
LukeThe idea is not to change the rule to adapt to the market, it is to adapt your buying methods to adapt to the rule. In any case, there is a new 11 second rule but you will need Steve to explain it to you as it can be confusing.
The properties in your example are negatively geared. I find that to come close to positively geared, you have to get away from highly populated areas like Newcastle.
Try out in the sticks maybe 20 minutes or more out of Newcastle etc. Try other States. Try New Zealand. There are loads of options if you go looking. Maybe a spotter might be useful for you.
I wish you all the best.
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
Luke,
If you bothered to do a search on the 11 second solution this thread would have been among many to pop up and was posted as recently as only yesterday:
https://www.propertyinvesting.com/forum/topic/14386.html
In it, Mr McKnight offers an explanation of same, and even suggests that if you have further problems understanding this theory, you may like consider re-attending the masterclass seminar.
If you conduct a search using keywords such as “11 second solution” or “11 second rule” and selecting the “subject title” as the preferred option, you will find pages of information that may help enlighten you further on this theory.
Good luck with your application of this rule / solution / yardstick, regardless of whether you apply it to the market or to the property, you’re going to need it!!![eh]
Cheers,
Jo
Luke,
The 11 second solution was something that Steve & Dave used as a guide to purchase lots of property from about 1999 to the “BOOM”….
There has been the biggest boom in Australian Real Estate history in the last few couple of years, and although it IS still possible to find properties that meet that rule in smaller towns, Newcastle is “more than likely” not one of them.
These days you “probably” need to be using different stratagies to make money out of property…
Finding a property that straight away meets the 11 second solution these days, may not be the best addition to your property portfolio!
Good luck,
Del
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