INVESTOR CLUB- GOOD, BAD OR UGLY

Hi Hrm,

Try the search function on this one as it seems to come up often. Best of luck.

Cheers

I would have to agree with the Mortgage Adviser, if it’s the Investors Club and you are not getting service from them, you need to make a fuss about it! They are supposed to be there to help you go to settlement.

I would also agree with Mortgage Hunter, they are quite good in that they can “hold your hand” all the way to settlement and a good way beyond that – great if you are new to it all. More experienced investors can handle it themselves (and are more likey to be in a position for wheeling and dealing for greater profit).

I have found most IC support members to be friendly, sincere and available – though some are better educated/ experienced than others.

Just one thing though – unless they have changed their approach, the IC advocate -vely geared property, with the cashflow shortfall being compensated by pro-rated non-cash deductions like depreciation savings. If you’re a disciple of Steve’s you probably won’t find this strategy too appealing.

Oh and another thing – the cynical among us may be heard to imply that the IC get a kickback from developers – and that the purchaser (you) pays for that kickback in the price of the property you are buying. I have never seen proof of that myself but if you know your values for the area you are looking at (as you should!) or if you check against valuer-general data you should spot any inflated prices.

Bob

Never Sell?

I agree so far as I would prefer to own more assets if/when possible. However, if you never sell you miss out on being able to afford more assets.

If you have bought negative geared property and never sell then you’d have to wait until you’d payed down enough of the loan that it has become positive before you could service more debt. I prefer to think of buying “never sell” property and “allow growth and sell” property. Take the profits when you can apply those profits to their best.

still can’t figure out how they get away with being called a ‘club’ as it really is quite deceptive. There must be a clever structure in place as I know all sorts of government departments have been thru them. The only thing they could ping them for was the ‘no tenant no problem’ guarantee which I think was a breach of the TPA or something like that.

Think of the bright side chris…

If it keeps dropping in value and the rent stays the same, it may become positive cashflow!!!!!

The Mortgage Adviser

A few comments here. I know of a woman who vbought a property 3 years ago in sydney- camperdown- negatively geared- and is now selling it as she has no tenant- and the highest price she hasbeen offered is 500k- a 100k loss- boom boom! (the basil brush boom boom- not the real estate boom). It’s a myth that ALL property has to double every 7-10 years- it’s just a marketing way to sell books and talk up RE as an investment proposition. Some property will triple in a few years, and some will decline. In decline, some people will say they have been ripped off or two-tier marketed… reality is- RE is just another market. Compare a ken done with a Norman Lindsay…

The Investors Club seems likes it;s been around a while, and started off as investors who hung out with other investors and sold properties- not sure what the harm is in that really. Buy and sell? well, i guess we all do that. They just got together and recruited others. My feeling is, it isn’t the most shonky thing I have heard of.

Never sell? well, that used to be the vogue notion. The whole beginning notion of negative gearing was buy and don’t sell. Now, there are just newer ideas on the market. Remember reading those stories of people years ago who would say “I wish I had never sold… I bought a property for 2 and 6, which is now worth a squillion blah blah.”

Some people will make money in RE, and some will lose it. I just see the IC as a buyer’s agent or spotter type thing- flogging off their own properties. Remember, the IC was around before RE.com.au was in vogue… now most of us find our own properties. But i think the IC was for more localised buyers in Qld who wanted support and more localised prices than two-tiered marketing which was rampant at the time.

As for me, I am not a “clubby” type and I find my own ways of doing things, but on here, people are always talking asbout joint ventures and building alliances to make money- not sure there’s much difference between what many people have been doing and the IC.

kay henry

These stories coroborate my thoughts.
Alarm bells go off for me regarding any type of herd mentality with regard to R/E.
I checked out the IC a while ago and spoke to someone from there and was surprised (not really) that they had very conflicting beliefs to mine with regard to buying and selling houses.