A Question For Steve

It appears to me as though Steve has invested in improving this web site, the RESULTS program, etc. Not necessarily on Property.

Mal

Getting out of your comfort zone, can help you become comfortable

Dave

Any truth in the rumour you guys are bailing out of Buffalo?

Regards
Tony Young

Good try Martin, but why would Steve disclose his target market for the world to see? I surely would not tell you where I was investing on an open chat-line and open the flood gates to competition

Cheers
Pyramid

Hi Martin

I see from the threads that you seem to have purchased in the States, well done.

At the risk of sounding negative and perhaps putting your nose out of joint, it is a no-brainer to buy and pay retail for turn-key properties from someone who has done the hard work before you and in turn profits from your lack of research or effort. I am not saying there is anything wrong with it, just that it is an easy option, although for those who are money rich and time poor this is probably a good option.

It is also a no-brainer to directly ask an investor where they are investing in order to take the easy option to find out where the good deals and hot areas are. It is perhaps a little arrogant as well. People will volunteer this info if they want to, not because someone directly asks and then has the nerve to say that they didn’t reveal enough.

If you want the good deals, go out and find them for yourself rather than just ‘ride along on the coat-tails’ of people who have done the hard yards, otherwise the option is still there to pay full retail and then some for very little effort.

All the best…Giraffe

“Real Estate – The Foundations of Wealth”

Great reply Martin and it does appear that I have put your nose out of joint.

This forum is about expressing views and I guess opinions if we so desire, so I don’t necessarily apologise for my previous post. In relation to emailing first, I thought that the purpose of the forum was also to participate in and promote active discussion and free for all for everyone. Again I don’t apologise for expressing my views.

Congratulations on building your portfolio and the work you have done and for working for your family’s future, I guess that’s essentially why we are all here.

There are many who are too lazy to do the work needed to find the deals and rely or even sponge off others to get the good info and use their hard work and take their info for free. Considering that Steve and Dave host this site, then I guess in a way they are fair game for these types of questions, but I don’t believe they should be compelled to give away their investment locations nor should they be criticised for the answers, irregardless of how vague they may be. Steve and Dave are investors in their own right, just like all of us.

I remember when I was planning my USA trip and posted here to seek expressions of interest for a travelling companion. I received many replies but the travel dates did not suit most.

There was one person who wanted to come along for the ride and shadow me through the process or ‘ride on my coat-tails’ on the trip because they had done very little research on Rochester and had not made any contacts of their own. I had spent four solid months of late nights and numerous phone calls conducting research and establishing contacts in the USA. This person expected me to just give up this information and come along for the ride, benefit from my hard work and basically bring nothing to the table.

Unfortunately my plans had been two-ing and fro-ing in relation to dates, itineraries and whether or not my partner was able to come with me. In the end I travelled alone and came home early, although the trip was very successful.

I have worked with many people who take advantage, even taken credit for others hard work and I certainly struggle with the ethics of those people.

This is the reason why I find that those who ask questions on where a particular individual or group is investing are arrogant and seeking easy answers rather than doing the hard work themselves. If they don’t answer then fine..if their answer is ‘as general as it gets’ then that’s their perogative. If they volunteer the information, as many good people do on this forum, then that’s fantastic.

Obviously I don’t expect you Martin or many others for that matter to agree with me, considering that you posted the question in the first place, but that is my point of view.

I hope you have a Merry Christmas and a Happy New Year

All the best…Giraffe

“Real Estate – The Foundations of Wealth”

Martin

I see that you have edited your last post and omitted some of the content, which is what some of my reply was based on. That’s fine but I will keep mine the same only to say that the word ‘arrogant’ was probably a bit strong and perhaps ‘lack of respect’ is more appropriate.

Also that paying someone for a service, whether it be buying their books, attending their seminars or using services they provide such as forums I don’t necessarily classify as ‘riding on their coat-tails’ as you are paying them for education, which is their business.

To answer your question on how I did in the USA, I wrote and posted a journal on this forum for all to read. I can forward this to you if you like.

I have purchased in the USA after many months of research and concreting the relationships I made whilst I was there. I have a ‘test’ rehab that I bought in October that my project team has just completed, subject to C of O approval, and they have just onsold it on my behalf for a profit of USD$20K. It certainly pays to have a good team on the ground, who are working with me 100%.

There will be future opportunities for Aussie Investors to purchase some of these post-rehabs or even buy into some of the projects with me but I won’t be ready to progress until next year.

Once again I am not against buying from Bird-Dogs as the buyers are paying for the Bird-Dog’s time and hard work in finding the deals and their services make the purchasing easy for those who either don’t have the time, knowledge or are just too lazy to do the hard yards. I guess that if there wasn’t a market for Bird-Dogs, there wouldn’t be any and this strategy obviously suits a lot of people.

In fact if there are Bird-Dogs reading this who want to on-sell some of my future projects in the states, please don’t hesitate to drop me a PM. My team and I are currently looking at a project to purchase multiple single and multi-family houses for rehab but it is still early days yet.

Anyway, time to finish off my Christmas shopping!!!

All the best…Giraffe

“Real Estate – The Foundations of Wealth”

I have noticed that a lot of investors’ strategy is to ‘buy where you think the market will go up’. So therefore if they have been buying in one market and it’s gone up heaps, they sell off and then try and find another market where it might go up. This is fine and I guess over the years you would become a real globe-trotting investor. Australia, Buffalo, Japan, Estonia, Sweden, Fiji, – etc etc.

Now me personally, I have been investing in NZ for years now and made …well the sort of returns that people dream about. but I have made more this year because I know what I am doing these days a bit more, even more than I did ‘by accident’ because the market moved in my favour. I now make the profits I expect to make, because I have a plan and an exit strategy, whereas before I was just sort of ‘buying and holding’ (though still not a bad way to start if you don’t have any properties at all!)

So over the years I have got to know the NZ market very well (and this is an ongoing process – I learn a little more every single day) – and this to me is priceless as it means I can identify a good deal instantly. I also have a network around the country, actual relationships that i have developed, trusted associates, and the buying power and clout with agents that comes when you put in multiple offers on deals Every Single Week. it would take me a long time to get to know another market in this way let alone build the team I need. Using a bird dog is one way around this, and if in the US, Westan is a recommended person I would use myself.

However for me, the better I get to know the NZ market and investing in general – the better I remember something Steve taught at the first seminar I ever went to, and he used the kid’s toy where you stuff different shapes into different holes, to make his point. Point being – that you fit the strategy to the deal.

So at the beginning the only strategy I knew was ‘buy and hold cashflow positive.’ Then I learned ‘renovate and add value’. Next, I learned ‘speculate for capital gains in a growth area even if it’s negatively geared, not geared at all, or has no income.’ Next I learned ‘subdivide and add value, and onsell’. Next I learned ‘build houses and create more equity than it costs you to build’.

Therefore I don’t need to move markets, because I am no longer relying on the market to do anything. If it goes up, great, if it’s flat, doesn’t matter, the profit is in the adding value. if it goes down 10 percent, my profits are affected of course but not so much that it’s not worth doing. So by doing that you become the master of your own investing destiny and not so much a cork bobbing on the ocean of ‘market movement’ that you can’t control.

The only strategy you know is to buy high yielding properties in a market you think will go up, then that’s all you will be able to do, and therefore you will have to travel the world to find your deal.

However if you know all strategies and one market like the back of your hand, you will see the deal that you can subdivide (for example) and you’ll even know how much that costs and the probable value of the sections, and how long it will take. Because you will know the market, the prices, the timeframes, the people to ask, the agents who will do you appraisals – you’ll KNOW YOUR STUFF. You’ll know the future value of the house where you can add a minor dwelling. You’ll know the value of making a 2 bedroom house into a 3 bedroom house can make XYZ dollars difference to your resale value, but only cost you XY to do. You’ll know that by spending 10k you can add 20, 30, 50 to the value. You’ll know that by waterblasting and mowing the lawns and clearing some rubbish (2k max) you can add 7, 10 to the value. If you can get your head around those simple beginners examples you will also be able to get how developers can make 1M by spending 500 in 18 months. And how people can buy and onsell and make 100k before they even settle.

And yes, the deals are in your suburb, no matter where you live! (whether you can afford them or have the skills to do them, depends of course on where you are in your investing career and so on, but you will hopefully at least see that in theory at least, you don’t have to go to buffalo (or even NZ) to get the deals.

all of these different techniques – subdividing, onselling, renovations, strata titling, increasing the rent and therefore the yield, are all fabulous ways to make money in any market (provided you know the market well enough to actually recognise a good deal from a bad deal) and my market is NZ.

Yes you could do the same stuff in Aus, but no, it might not be a cashflow positive deal, and not everyone can afford to pump 500k in to a deal (or service debt) to end up making 1M 18 months later.

So I do see why cashflow positive deals are still a fantastic first purchase as they (hopefully, unless you have roof leaks and so on) should break even and make a small profit so you can buy the next quickly. The more cashflow positive properties you buy the more your risk spreads (good) and hopefully over time you will get capital growth that you can either realise (sell) or borrow against to buy more.

So i am still in NZ because you still can find CF+ve deals in growth areas (there’s your value adding – the town will often do it for you!) Plus entry costs are cheap, no capital gains tax in certain situations, no stamp duty, easy to get 80 percent finance from offshore, etc etc.

So the exact same deal in NZ versus Buffalo might be a lot better in NZ because of the simplicity of purchase (time is money), the closeness of NZ versus US (safer), the purchase price (Nz generally cheaper than Aus so more liquid, i,e. less risk), less in and out fees, (affects the bottom line), easy to borrow on shore with no establishment costs (low grief/stress and of course the bottom line again) – etc etc, it’s called an investor’s paradise in so many ways. For this reason a 40k US deal on 15 percent yield might cost you 4k mortgage establishment fee if you use US funds, and if you don’t you’re exposed to currency fluctuations.
Whereas in NZ it’s easy to go to a broker and get 80 percent finance for most deals (70 percent for some places, or commercial deals or less depending on the lender) without any fees to speak of, no stamp duty, don’t need a structure necessarily, etc etc

I know this ended up being another yay NZ rant and it wasn’t meant to be, and now I can’t be bothered editing it, but the first point is still true which is you can make money anywhere using different strategies, you don’t just need to use one strategy and then move countries when that strategy doesn’t work any more. !

cheers-
mini

Agree she’s done well..and a a smart Investor who took action..

Wasp
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Its not what you earn but what you do with what you earn