How do you go from 0 to 130 in 3.5 years? Can this really be done on an average income like Mum and Dad Australia? Or is this a little unrealistic in that it can only be done if you are an accountant, have a ridiculous income and already have assets that leave the average man for dead. I challenge anyone out there to follow the strategy and to come up with this great result. Is this something we all can do or is this a dream – smoke and mirrors? I consider myself a realist, and want to know things that are real or can be actually played out by real people….. So the question is : What are my chances of taking up this book, following step by step and coming out as a real player in this game?…… What income do we require as a starting point?
Did Steve McKnight buy and hold all those properties? I was under the impression he often bought, altered, sold at profit then used the proceeds to do the same thing with more cash and repeated this a few times.(or a lot of times), which would have bumped up his property count without actually increasing the total owned by as much. Also in his book he stated he went to NZ and put offers on 80 houses in1 day and bought 60 of them, all in the one very high yielding town with low house prices and high rental. That was back in the days of 10+% rental yield.
Why not ask him? Hey Steve McKnight. Are you out there? Could you enlighten us on these questions?
It can still be done, just not in Australia, try USA.
Pre GFC lending might have also helped.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
As above with lending, I see too many physical barriers. I do see that it can be done- Akin to winning the lotto……..
I would like to see some evidence, facts, and a real strategy that will work for Mum and Dad Australia in 2011. Who has the answer?
I think it is able to be done. USA. Probably go to the market update and he will tell you all about it.
Also there was an element of vendor financing for cash flow as well as bringing in money partners etc for more cash as the deals got more advanced.
Also you are talking about properties that were worth $30-$40k, similar to what he is currently doing in USA – only he is getting 3 properties for that price. You can follow PI.com on Facebook, he showed a few of the properties he bought some time ago as he bought them.
I have been to several market updates and heard Steve McKnight talk before. I don't think it is spruik (unlike many others) I think it can be done. But how much do most people want to do it? Probably not much as there are many many excuses.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeIt can be done- but I am pretty sure that Steve McKnight did most of his deals using vendor financing on properties that were worth (as D suggested) 40-50k. He didnt adopt a buy and hold strategy and aquired 130+ quality properties in the 500k range. He either bought and sold these cheaper reural properties quickly for a profit or onsold them with vendor financing.
Luke.
I'd be happy with a book "0 – 5 properties in 11 years"
I'm sure Steve did buy 130 properties. Isn't there another book "0-240 properties in 7yrs" or something like that?But for me I'd just like to get to 55 and be in a financial position to say "I could happily retire now! My properties are providing 60-70% of my income, and I should be able to comfortably live on that."
—
MarkVF is one option – at least it doesn’t use all the checks & balances that the banks undertake. If using conventional finance you’d quickly exceed serviceability limits.
The vendor finance was done as Steve being the vendor, and as I understand it he did a few that way. You'd still have the control of the property until it was refinanced out of the agreement. Probably a nice way to have a lot. Also I think he was never afraid of selling. Plenty of other 'gurus' tout the 'don't ever sell' message.
We did 0-5 properties in 6 years (it was supposed to be 5 yrs), now we have culled to 3 and it will be 0-15 properties in the next 2 years lol. I'd just be happy with a couple mil to chuck at commercial tenants who don't bug me
Oh yeah and an island, race track, Bugatti Veyron, corporate jet, blue chip house on acreage…….wish real hard hahah!Quality not quantity….
There is another book as mentioned above, and the illustration is how when you get plenty money and plenty houses you need something else as well. Still good reading.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeI think half of Steve's book should be looked at for how he did what he was going to do, rather than how many properties he dealt with. I have no doubt his figures on what he did were real and accumulative rather than summarial (a final total). But .. from reading his book, I went back to Wendouree in 2006 when the properties were 175k for a 3br brick house and bought eight of them as rental investments. Price is now 250k (roughly) and from that i'm sitting pretty. Refinanced the 3 yr loan already so I own one of them outright. They were cheap .. TOO cheap .. and so i bought in.
The whole idea of Steve's book is to train you to recognise an opportunity and how to approach it. I've seen three people approach the same investment strategy and two of them lose on it, the other made a small fortune. What Steve recognises is that there is more than one way to make the deal .. but the whole idea is to find the deal .. then make it work for you.
I had a block of land that i purchased and divided into smaller blocks. I then went to an agent and he worked out a fee per block for selling this land. I suggested that it was a little much and could he be flexible on the commision? (he'd still have got the deal). After getting a rant as to how much his time was worth and he was a specialist in what he does, I left. And rented a campervan and a large sign for the road. Professional looking of course. Made up land contracts with a lawyer friend, sold the blocks over 3 weekends. All of them. Without an agent .. and with almost no negotiation downwards. The agent lost out on about 70k worth of commisions. I earned that for myself in the three weekends.
From Steve's books you'll learn what a deal looks like, how to make a deal .. and how to finance that deal. The rest will come from your ingenuity and your time.
We used a technique that Steve used when he started out, i.e. vendor finance.
Our thinking was pretty simplistic at the time. We were working in a $200K average priced market and I was on an expat wage so we needed approx $40K to buy a place (20%). We thought that we could make around $40K out of the transaction in anywhere from one to three years. This then left us with enough to do two (very approximate but close enough for our thinking at the time).
It was this compounding idea that got us going We read Steve's book along the way and that was great for positive reinforcement. It worked so we kept at it
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
I see that Steve has accomplished great things, the philosophy is great, the thought processes are impecable, nice guy and the negotiating skills are great. But what I cannot see is that this can ever be repeated. There is no strategy for Mum and Dad Australia. I hear that you can do 5 in 6 years or sub-divide several blocks or vendor finance (that is all good and I do not wish to down-play this) ….but again 0-130 (although arbitrary numbers) are they really possible in 2011 or do we play lotto given our chances of ever accomplishing this …… Everything mentioned above suggests it can be done- but again- there is No blue print. Yes, I am looking for a blueprint or else I cannot pass on this message, look someone in the eye and say read this book as a guide to making you wealthy. Who has done this today? Following the Steve Recipe or any recipe for that matter as an Average Australian?
Questions must be asked? What income is required originally? What ongoing income is required (do I have to sell books or be famous to improve my income to keep this up), What is my job title (Do I need to be an accountant, complex network or friends or have extensive knowledge, as the fees may eat into a large part of the yearly profits)? etc etc We cannot jump to the wealthy stage and say it can be done because Steve did it….. We are average Australia's. What can really be achieved and how? These questions have to be asked in case we are all sent down the wrong (if it is wrong) path.
I bet Nathan Birch could do it in Australia if he set his mind to it. He is the most creative property investor I have seen.
http://www.nathanbirch.com.au/index-1.htmlYes I have seen how he is all about making money. Nathan Birch (X-Real estate agent) was also selling property to clients (as a buyers agent or like) in Mt Druitt (not exactly a top pick) for a large fee. An average Australian has a regular job, works 9-5 etc etc The question would have to be phrased: Why do you not back yourself Mattnz? Is this something only an extraordinary person can do?
Let's dissect the 'average Australian'.
9-5. Generally ok in their job. Goes out and has a drink with friends on the weekend. OR has dinner out or take away. Happy with a nice new car or reasonably new car. Maybe paying for private school for kids.
Has a hobby. Goes to an event once a year. Has not really much ambition above eventually paying off the family house and moving to the beach in their state.
How big is their drive to be financially free? How ambitious are they? What are their views of money? Do they scorn wealthy people and say oh money 'it's the devil'? Are they financially educated? How motivated are they to actually leave the safety of their jobs or get rid of the nice car?
Will they make cuts in lifestyle to get ahead in the long term?
Is there still an average Australian?
Everyone is different, you cannot bake the same money cake even if you follow the same recipe. What works for one person doesn't work for another. Peoples age, risk, ability to access funds etc, etc makes it hard to do one size fits all investing.
What about mindset? What about a positive or negative outlook? People become extraordinary when they step outside of negative and change mindset and do what they set out to. Obviously Steve could have stayed an accountant however he made a change and a conscious decision to step outside the box he was stuck in and become and extraordinary investor.
How many average Australians even want to try that?
Just some thoughts.
D
Ps. Welcome back Number 8 it's been awhile
also..I thought you were already financially free, what was your own experience?DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeThank you for the Welcome back! in line with this website, I did a major renovation on my property…
There has to be a cut off point between dreams and reality…… And there is the answer…. Dreams sell, reality does not…..
I believe wealth cannot be created overnight for the average Australia, it is a 15-20 year deal and there is a blue-print for this- achievable for everyone. Those that say otherwise (shorter time-frames) have got the boundaries of dreams and reality blurred or are the extraordinary. That being said, I am happy to be told otherwise and will always be open to a new blueprint.
I have 3 investment properties, but I am planning to sell 2 of them this year. The third I intend to develop using the proceeds of the other 2.
I don't have a desire to manage 130 properties and see it more likely as a road to bankruptcy in Australia. The market here is ridiculously overpriced.
If I was inclined to try anywhere, I think the best market by far would be USA.
Hi team,
Nice to see the discussion about the book.
I guess it is still theoretical to buy 130 properties in 3.5 years. In fact, I am on track to do so buying in the States about 18 months ago.
But, the real questions is not the number of properties you own, but what the portfolio delivers. You may be able to achieve your investment objective owing 5 properties. Or 2. Or even 1 (think office building!).
Indeed, the premise of book is not about owning 130 properties. It is about looking at real estate a different way: cashflow rather than capital gains.
So, to answer your question… could a person on an average income in a full time job own 130 median priced Aussie properties in 3.5 years (based on 2011 values) – and contributing 20% deposits along the way. Yes – but not on a buy and hold basis. They would need to do something creative and have a team behind them. Also, it is unlikely they could all be held at once, but, then again, I never did.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
It is still concerning to think the average Australian may step into the property market armed with the motivation of a book, creativity and a team they may or may not have.
Using an example of Mum and Dad Australia, they have sold their family home being a little creative, to fund a development/ buy & sell, purchase an office building or like, move forward 5 years down the track, and they find out they do not have the necessary skills / blue-print to tackle this game in the correct manner.They lose the lot.
I guess my point is it can be done, but you have to be the right person with all the skills and associates. Like many topics and ideas in finance (not limited to the book mentioned above). We all need to be aware that marketing has a key role and your finances should be well thought out, have a clear plan and most importantly be realistic.
Oh yeah and an island, race track, Bugatti Veyron, corporate jet, blue chip house on acreage…….wish real hard hahah!
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