[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

August 10, 2005 - 5:25 am

Thanks JKM that was a very helpful post, exactly the kind of information I was looking for.

Since buying this property I have learnt a lot about structuring and would also not use a partnership structure again.

To the people who insisted on suggesting I seek legal counsel, my view is this is technically correct yet practically useless advice.

First of all it’s stating the obvious.

Secondly my point about being a good investor is that you don’t give away all your power and responsibility to a third party merely because they are a supposed expert. You should be aware of the broad issues else you in no position to judge how effectively they are carrying out their role. I certainly don’t do this with my accountant for example and I wouldn’t do it with a solicitor either. My post was about taking responsibility for an issue rather than offhanding it.

Originally posted by JKM:

Ben,

I am going through this at the moment but we are now both in agreement to sell. I asked my solictor the same questions. Basically, you can’t engage a real estate agent to start marketing the property without all parties signatures on the sales agreement.

I have requested a sales contract be drawn up by my solictor, however the property can’t be sold until all parties sign the contract. If it is forced & one party refuses to sign the contract for sale it goes to court. My solicitor advised that the court will probably declare that if you can’t buy the other party out then the property goes to auction & too bad, whatever price you get you get.

The cost of going to court & the auction fees will obviously put you in a worse position so I was relying on my solictor to basically kick the other party in the pants & make them wake up to themselves regarding the offer that is on the table.

Good luck & I hope it all pans out for you. These types of situations can be stressful. I have learnt one thing though, & that is I will not go into partnership to purchase a property again.

Kim

Courage is not acting without fear but acting despite your fear.

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

August 2, 2005 - 3:22 am

Megan,
Thanks but my question was very specifically enquiring as to the legal ability of one party to force a sale. If I wanted to pay for a lawyer before asking for some general information here I wouldn’t be a very good investor!
Ben

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

July 26, 2004 - 11:56 pm

Hi All,

My first seminar of Steve’s also. I found it very good value for money, but I would add a qualifier saying the seminar will be completely valueless if I don’t take any action from it!

The main reason I signed up is I was in the position of many people (confirmed by chatting to others at the seminar) of wondering what to do now the boom is over?

I now have the confidence to go forward with what I will call the ‘theory’ Steve outlined, plus the actual real world practical examples provided by the Mappers. Whilst Steve and Dave make making money look very easy, I found the struggle some of the mappers went through helped balance out that perception. They still achieved spectacular results, but you got a sense of their blood, sweat and tears as opposed to Dave’s nonchalent ‘I made a 100K in 5 minutes’ stories [blush2].

Another benefit was definately the rubbing shoulders aspect. Just hopefully making a few contacts and finding out about other people.

Anyhoo, lot’s more information than I could absorb so am thankful we did get notes in the end! I was also impressed by Steve and his sincerity. I had no problem with Dave’s style either and appreciate the time he took to answer a personal question I put to him.

Will see you in Sydney!

Ben

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 18, 2004 - 6:12 am

Originally posted by GreatPig:

Originally posted by Terryw:

So even tho there is no CGT in NZ, they will have to pay CGT in Australia on any gain

I believe this is the case. However, I’ve had suggested to me that to avoid that you can invest in NZ through a NZ-based trust and if necessary distribute capital gain to NZ beneficiaries (perhaps a company or LAQC owned by the trust if there’s no one else). Then you don’t actually own any assets in NZ and don’t personally receive any capital gain. Of course there’s extra cost in setting up the NZ structures and any gains would have to remain in NZ.

Sounds good but remember setting up structure with the specific intent of avoiding tax is a criminal offence! You would have to demonstrate to the ATO a very good reason for setting up the NZ beneficiaries.

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 18, 2004 - 5:21 am

Bit of a digression, but I like the characterisation of investors that Kiyosaki uses (he borrowed and adapted it from someone else originally).

Bit complicated to explain here but many of you would have read about it.

The idea is there are 7 levels starting at zero and should be at least a level 4 if you expect to do well with investing. Level 4 investors have a long term plan, excellent spending habits and intermediate to advanced knowledge of their chosen investment vehicle (or more than one).

Really they are supposed to be people with all the fundamentals in place, with the main bad habits that detract from success under control.

From there you may like to become a full-blown capitalist and start creating global markets

I think the ‘serious’ investor fits with this characterisation of a Level 4 investor. The lower levels are described as gamblers, cynics, excessive borrowers, market followers that kind of thing.

Ben [buz2]

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 18, 2004 - 4:01 am

My views…

A buyer’s agent is a convenience certainly. But there are two main reasons to avoid using them if possible.

1) You don’t gain anywhere near as much experience in finding the investment. The whole process of looking is very educational especially when starting out. In the long run using a BA is a shortcut that will cost you valuable lessons.

2) Call me cynical but you probably aren’t going to be offered the best deals. If they were great deals the BA would find a way to purchase himself or offered to a closer associate, family member etc. You are likely to be getting ‘hand-me-downs’

On the other hand if someone offered me a deal that I liked (i.e. passed whatever investing criteria I have) then I would have no problem contributing the finders fee. Nor would I balk at offering any deals I find that I have no personal use for to others.

I would imagine most people who use BA’s are those who are short on time, so if you have it I think it’s better to go look under some rocks yourself…

Ben [buz2]

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 17, 2004 - 5:15 am

Hey,
To put it even more simply the body corp insures the building structure and anything on the exterior of the buildings and your job as owner is to insure the internal parts of the property, e.g. carpets, kitchen cupboards, other fittings etc.
I personally do not bother with rental income insurance as this is quite costly and the risk should be negated by having good tenants and a decent property manager.
This means all you need is contents and public liability insurance. The liability insurance is usually part of any policy so for a typical 2br unit you might have $20,000 worth of contents that need insuring which can be had for the paltry sum of $130pa.

Hope this helps,

Ben [buz2]

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 17, 2004 - 4:58 am

This post has me very interested… are we sure rents are going to rise? They seem to have been fairly stagnant for some time.
If this is true it could change my investment strategy. Instead of searching for the elusive +ve geared IPs it may be more worthwhile in the long run to pick properties that are close but will have more rental gains.

Ben

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 11, 2004 - 4:43 am

Some may find this a little strange, but since reading Rich Dad and not being ready to fork out for Cashflow I have started playing Monopoly again.
To my surprise I had a much deeper understanding of how to win from reading the book and in the first game was able to utterly destroy my opponents [baaa].
Seriously though, it shows how simple the principles of making money really are – acquire assets that give you income and look after your cashflow.

Ben [buz2]

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 11, 2004 - 3:13 am

Thanks Winandel,
I have only recently learned just how important this part is! As kiyosaki says success in the real world is based on co-operation not doing it solo.
Thanks for the encouragement Monopoly [biggrin]
Ben

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 11, 2004 - 1:52 am

Have been working on this lately, but as someone mentioned I am still in a very steep part of the learning curve and this is subject to change.

I think goals should be specific where possible however, and should be looked at several times a week.

1) $500pw passive income in 5 years (any asset class)

2) Have a great network of mentors/friends

3) Have a strong and well protected asset base

4) Have developed my ‘financial iq’ and investment experience substantially. Know something about all the investment vehicles, different strategies, market trends etc.

5) Have developed my sales leadership and other skills in preparation for starting a successful business

As you can see I mostly focused on learning but through action as much as possible.

regards,

Ben [buz2]

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 8, 2004 - 1:02 pm

Originally posted by westan:

Hi Muppet

as usual you have all the info,

i suppose being a dentist or for that matter a university student doesn’t disqualify you for finding good deals.

regards westan

It’s not just the fees it’s the contract terms I am not impressed with.
If your finance falls through you are still expected to pay the fee.
Makes business sense of course but I feel they are charging a lot for me to take on that risk.

Main reason I didn’t sign up though is I don’t see the educational value in someone else doing my shopping

[exhappy]

Ben

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 8, 2004 - 12:58 pm

Looks like balanced commments to me.
There wouldn’t be much point in him trying to influence the market with those comments – if he was he’d be so slick most people would miss it
Ben

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 4, 2004 - 1:32 pm

My 2c worth Lil man,

Keep you eye on the goal and prepared to be BORED.
At 13 it is boring to save and develop good spending habits. But these skills will set you WAY apart from your friends.

Try and stay motivated by reading books and using the forums like this one.

Just think of staying committed to the goal as doing your future self a massive favour. When you are 18 buying your first investment you will definately want to thank your 13yo self

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 4, 2004 - 1:41 am

Thanks all,
I’ll pass on the comments.
They do require finance to build but their home is worth more than the land. I suppose it doesn’t hurt to name figures. Say about 550k for the house, 415k for the land and 250k to build.
The reason I say rare is just because it’s the last good block in this part of rapidly developing western sydney, but for some reason homes and land in the area are mostly listed at now unrealistic prices. That means they can probably get the land at the price they want now but if they wait they will have to look in a completely different area.
cheers,
Ben Carbery

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 3, 2004 - 8:25 am

Hey Petersemail,

Kiyosaki defines this and the other 6 levels of investor in his book Cashflow Quadrant.

Well worth buying the book IMO. Helps if you have read rich dad poor dad first.

cheers,

Ben Carbery

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

June 3, 2004 - 8:23 am

If you purchase with two names on a contract, that’s automatically deemed a 50/50 partnership. I believe you can have a solicator draw up some documents to make it 70/30 or whatever you like but remember this will only split your income, NOT your liability. You are always 100% liable as a partner in a partnership (if you’re partner bails to Costa Rica) for example.
Note this my understanding from WealthGuardian so feel free to correct me

Ben Carbery

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

May 31, 2004 - 11:34 am

Thanks All,
I will talk to my conveyancer.
It is a small block of 4 so should be able to get some action on a new BC – the agent’s in the area say this guy is notoriously bad!
cheers,
Ben

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

May 30, 2004 - 5:54 am

Steve,
Thank you so much.
By some strange co-incidence this month’s newsletter has helped answer the exact question I have been asking myself lately…should I sell and realise some of the capital gains I have made in the last 18 months or continue with a buy & hold (accumulate more debt) strategy.
This article really clarifies a few issues for me.
First of all it is good to hear it is ok sometimes to sell! I guess it’s common once you have read a book or two on property investing to think this is always a bad idea.
Secondly it seems very timely advice considering the current market climate. Many people have made big capital gains in the last 2 years and are concerned about securing these gains and minimising their level of debt in an uncertain market.
In my case I bought several small negatively geared properties (albeit profitable after tax) and am looking to convert my portfolio to true positively geared over the next year. Selling one property was an option I had considered but was concerned that a) I would be paying CGT and b) it was counter to my strategy.
Thanks for the working example showing how this can be actually be a beneficial situation!
cheers,
Ben Carbery

[banderosParticipant@banderosJoin Date: 2004Post Count: 46]

May 25, 2004 - 1:07 am

Ok, thanks Michael.

Informal partnership simply means there is no additional formal agreement, only what is provided by law, so in this case I would be dependant upon the other party willing to sell.