The benefits of property developing

So M.Y what is your seminar content and how do u justify the price you charge??

resiwealth

I have know Micheal Yarndey for a number of years. What makes him different to many seminar presenters is that he actually does what he says. There wold be no one with more experience in Victoria on investing with syndicates. If you are going to spend a few days learning something it is well worth while. Remember workshops and seminars are only worth while if you are going to act on the information. If you are just going to be a couch potatoe or you take a synical attitude stay at home. If you want to learn and improve your position Michael at least lives what he says.

Nigel Kibel

http://www.propertyknowhow.com.au

Australian and New Zealand Buyers advocate
service and seminars

You are correct, but it was not instigated by me and fortunately I don’t need the publicity.

I find I am continually asked to justify my business and commercial descisons.

I am comfortable with that and sure it is good for business, but I would rather a more constructive discussion that helps other forum members.

Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.au

Its currently 87 projects at various stages from concept to completion (there are 19 people on our team) Past and some of our current projects are listed on our web site some with photos.
But it has already been suggested that this post has gone way off topic and has become a “spruik fest” for me so let”s leave my business out of this.

Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.au

Dear Robert,

1. I am a full-time property investor from Singapore. I see myself as “living off equity” although I have still not truly achieved my financially free status, as yet. Thus, my full-time job is that of travelling around and doing property investing.

2. I have attended Michael Yardney’s Real World Real Estate Course last year in June 2004. Some of my co-participants were surprised to learn then that I was living off the equity then although I was only having 2 Australian properties then.

3. One year later in 2005, I managed to have 4 properties, excluding the fifth one which I pay A$45,000 for the off-the-plan unit apartment purchase in the Goldcoast which will settle in 2006.

4.When I started with developing 2 properties in April 2003, the total value of the property portfolio amounted to only A$416,759. Upon these 2 house completion some 9 months later in early 2004, the total value for the same 2 property portfolio have grown to be A$595,000. I was also able to achieve more than 100% return a my cash-to-cash basis, within a 9 months period, against my 20% cash deposit upfront.

5. Such is the beauty of development profits and immediate capital gains by the newly developed properties, that Michael Yardney is talking about.

6. I then increased my borrowings from A$333,408 to A$440,000 with St.George Bank, and transferred out a total of a nett A$100,000 in cash into my bank Account to fund my own living expenses and to further invest in more properties.

7. As the equity and bank borrowings is not treated as income, I pay no tax. Thus, I was able to fully use the A$100,000 cash to fund my living expenses and for my further property investment for 2004.

8. With this, I further acquired 2 more pieces of vacant land at the same Anchorage Estate in Rockingham WA 6168 at a total cost of A$231,000, without the need for any further cash deposit upfront, on my part. This is because I was able to use the A$100,000 additional loan from St.George Bank, to pay for the 20% cash deposit for the 2 new vacant land purchases. The remaining 80% loan for the land purchase came from La Trobe Bank. Both the land purchases were successfully settled in July 2004.

9. Upon the land purchase settlement, the land values have further increased. Thus, La Trobe was able to further lend us another A$284,000 for the 2 house construction.

10. To facilitate my cashflow management, I deliberately staggered out the commencement of 2 house construction by some 4 months intervals.

11. In January 2005, the 1st 2 properties were revalued for A$650,000 and I was able to get another A$32,000 loan to fund my living expenses and for property investment/debt servicing purposes, in addition to my rental income from the first 2 properties.

12. The house construction for my third property has now reached the Lock-up Stage and due for Practical Completion before the end of June 2005. Upon its completion, I expect the bank valuation for this newly completed house to come to no less than A$365,000, about A$100,000 more as compared to its basic investment costs of A$264,349… I will then draw out the newly found house equity to finance the completion for my 4 fourth property in October 2005.

13. Likewise, when I completed my 4th house in October 2005, I will repeat the same process, increase my borrowings again to fund my living expenses and new property investment again… Get the general drift and process?

14. What are key critical elements in this strategy? Personally, I have identified them to be as followd:

a. Buy vacant lands to develop in a fast-growing suburb. Beside the usual 20% developers’ profit margin and immediate equity growth upon each house completion, I also enjoy fast land appreciation values, thereby enjoying extraordinary capital growth for my property investments.

b. the capital growth from my properties must far exceed the interest rate which I am paying on the housing mortgage. Thus, the average 5 year annual for the targetted suburb should not be less than 10%p.a.. As in the case for the presentlly chosen Rockingham suburb, it averaged around 15.6% p.a.

c. I must generate sufficient income for the banks to continuing lending more monies to me to support my increasing property portfolio size/value.Alternatively, I can slow down on expanding my property protfolio and allow sufficient time for my existing properties to accumulate more than 20% equity before further re-investing. If neccessary and as a further althernative, I can also sell off one of the existing properties, though I will prefer to sell it during the property peak period.

d. I must however, continue to further re-invest the bulk of newly found house equity and the bank borrowings into more property investments/house developments, rather than to fund my own lifestyle choices, at this early stage of the game.(At a much later stage when I grow to be as big a size as Michael, I guess I will be able to afford this life option subsequently.)

e. I must also have sufficient bank facilities on standby to cushion/finance against any unforseen expenses/cashflow problems. As a good guide, a minimum of 10%-20% of the property portfolio total value can be set aside as a standby reserve fund for such contingency purposes.

15. I am now learning to walk my talk/belief and bring it into a successful reality in the near future. I am personally confident that both my wife and I should be able to achieve our financial freedom by 2016, if God be willing

16. If I am able to succeed in this manner, then I an certainly sure that Micheal Yardney’s strategy will definitely succeed too, as the same basic investing principles/process are being used.

17. As I am presently living off the equity, with a much smaller property portfolio as compared to Micheal Yardney, my risks are thus higher, as compared to his, using the same investing strategy, to live off our house equity.

18. I have also known of some real people in Perth, living off comfortably on their yearly property developments profits, year and year for the last 20 years. Today, he is a still quiet and non-assuming multi-millionaire, quietly acquiring vacant land plots to build their houses from time to time.

regards,
Kenneth KOH

Giday Kenneth good post but you said ” the capital growth from my properties must far exceed the interest rate which I am paying on the housing mortgage. Thus, the average 5 year annual for the targetted suburb should not be less than 10%p.a.”.
This will not continue to happen that much is for certain, during boom times it is easily acheivable, with luck over time you would imo get the point you have enough equity that it doesn`t matter a whole lot eating into it until the “next boom”……..if and when there is one!.
But generally I think for those with the right qualities it would simply evolve into a form of fulltime employment, but for the overwhelming majority it would be an expensive lesson in experience.

Just read through this complete post over the course of an hour or so. It had me spellbound.

I’m currently saving 1k a month and living to a proper budget so that I can buy my first PPOR in April 2006. I then need to pour my disposable income to reducing personal debt (other than the ppor) and then I can start looking for my first investment property. Then I hope I can start following the lead of all these inspirational posts.

More stuff on the voigtstr at http://users.bigpond.net.au/voigtstr

Wow, what a really long post! I was spellbound too, quite a lot of opinions and angles to read about. Poor Michael Yardney got a pounding from the suspicious among us and you have to admit Michael, you did actually spruik a little:

Then there was all that stuff about “I don’t need to advertise my services, the workshop only has a few places left”. I’ve sold property (and the associated strategies) too and that is a classic line! It sounds like one of those billboards in front of a residential development site, no wonder people got a bit sus. Mind you it doesn’t help when you also pull out the old “thanks for coming to the $60 seminar, now let me tell you about the expensive one”…

Which is all well and good I guess – hell, if you have a business, promote it. Caveat emptor and all that stuff. Just don’t expect, in this country, on a forum like this, to avoid being grilled when you do.

Now I’m going to subscribe to your update thingy and have a look for myself. I trust that the material is going to be a good balance between tidbits of actual investing/developing information and invitations to spend more money you.[wink] To be fair, I’ve never seen one of your seminars and I hope people really do feel like they get more than their money’s worth. I’ll check out the dates of upcoming events and see if I can pop along.

Also to be fair, yes you do have to spend a little to get the knowledge to even feel confident to dip your toe. Sounds like most attendees are pretty satisfied but even totally unethical characters can get testimonials easily enough – I know, I have been involved with one.

I guess it’s up to the individual to decide if it’s all BS or not, it’s your money as they say. If you behave like a sheep, you’ll get shorn. I guess investing, and especially property, is just like that sometimes.

Bob

P.S. Michael just a little point… on $100,000 income you would not lose half to tax… the Australian PAYG system works on a sliding scale and you pay 48.5% tax on the dollars you earn above $62,500 and 43.5% for any part of your income that is between $52k and $62.5k. For all the income you earn below that, you pay the same amount of tax as the rest of the worker bees. Most of us non-accountants don’t care for such details but I think it looks better to be more accurate than less. Ghod I really am quite anal. [sick]

hi no Stamp duty on mortgages when did that happen Im looking at buying a Factory & was told their is about $8,000.00 in stamp duty help