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I went to Dymphna s semminar at Sydney in early feb wasted 2 days and a $1000.00 in travelling expenses, there was about 2 hrs of useful information. The rest well if it wasnt blatant SPRUICKING it must have been a bad attempt at comedy and I didnt have a sense of humour. Al though it was a Joke I dont think it was meant to be. She was making some bold claims about returns you could make on over priced property in the USA. You just had to wonder why she did nt buy these properties herself. She could help you buy these properties but you couldnt do it yourself or get any-one else to help you because it was too risky and she was the only person who knew how, and not to talk to any-body else because every-body else would rip you off and no-body else had the expertise. 1st she made it sound like such a good deal you cant knock it back. 2nd she tried to scare you into only trusting her, then came the motivational speakers( absolute crap abuot confronting your fears) then the big sell Books expensive videos, courses to learn what I thought you were supposed to learn at the semminer etc and something like$ 8000.00 dollars for them to sell you an overpriced house, I am not sure if that included the quick tour were they fly you into towns show you houses herd you on to the next town, before you can gain an understanding of the real situation where they are trying to sell real estate. I did some research on the web and made some phone calls to agents and a guy I had already bought a house from, they just laughed at theprices in such locations. The amazing thing was the hordes of people signing up to all the salesmen at the back of the room without doing any of there own research. The main reason I went to the semminar was to learn more about financing off shore and all I got was erronious crap. She is supposed to specialize in asset protection but made ridiclulous statements like you cant get nonrecourse loans in Australia. I suppose because she wanted set up complicated trust structures so she could justify the necessity of her services Heather the wealthy people I know , dont talk about mindset. The only people I hear talk about it are spruickers, authors, and wanna bes who dont want to do the hard yards or take calculated risks.
How long is a piece of string ? Some will go up and some will go down. Some will do neither. Some will do both,go down then go up 6 months later.
Tommy I went to one of roltons semminars and could not get satisfactory answers to questions talking face to face, he was just dismissive, and tried to make me look stupid. He was selecetive about who he took questions from. Dymphna Boholt was another spruicker who was selective about who she would take questions from, they all seemed to be acquaintences. When I asked a question she didnot want to answer she had to go to the toilet.
Hi elliipitical, I would consider getting in to shares, as your income may not high enough to get enough tax deductions to make property viable in the short term. I think the coming months could be an excellent time to buy shares if you want to take a punt. the market is fearful, at a low point,but yeilds are ok 4 to 8 %. Use dollar cost averagging by starting small and if/ when prices fall keep buying. you can get capital protection by hedging with derivatives or options(insurance)
you can gear up not only your capital but also your yeild by using instalment warrants the worst you can do is lose your first instalment payment. When you have a share portfolio you can use this as a buffer for your property portfolio and can be used as colateral for property investing. Property investing can help realize gains made in the share markets while reducing taxation.Hi , Badger and Dan Congratulations to Badger on your investing sucess. I actually agree badger on his comments on semminars and the morons who take notes on B S. May be I was reading between the lines but I was refering to comments about Tim, and comments like I am wily canny and flexible etc . that made badger sound like a smart arse but when he explained his stratetgy he didnt seem to be as sophisticated as the impression I was getting. It is good to see some robust discussion for a change and some-one finaly challenge some of the propaganda and myths pushed at semminars. My philosophy is I started with nothing and I cant take anything with me when I go, so I am prepared to go with nothing. Just enjoy the ride. I can be be happy with nothing and was, I have a property in asia where I can live on virtually nothing if if I come undone . I could make it into a back packers and make good money. I am lazy and dont like working and dont understand why people do. I am an accidental investor I would see opportunity and think I should buy that and kick my self that I didnt. So I decided I wouldnt die wondering. So when I see an oportunity I grab it, they seem to come along every few years usually in bunches of about 3 which can make it difficult at times. My second property was bought using vendor finance I found out what the vendor wanted, at a time when property was hard to sell they wanted a little more income than their pension but not too much that they lost the pension and other benefits. so they were very happy to accept a low price and a low interest rate but guarrranteed income for 20 years. 2 years ago I wanted them to take advantage of the coming property slump but I had to get them to release their mortgage, to get finance from the bank. so I went to a solicitor and got a contract drawn up I had to double what was paying each weak and instead of the loan terminating in 5 years , I had to pay for the rest of their lives. A win win situation. I immediately went and found some tennants found out what they would pay then bought one house and some land to build another. then last year bought a house, and an option on some land for development, just to day bought an option on a house with large block I hope to subdivide. I also bought a house in 1997, two blocks of ground in 2003 sold the one I was going to build on for 20% more 3 Weeks after signing contract and didnot have to pay any stamp duty. Then built on the other. The deposite was part funded by some of the 100k 1 had made on the share market by buy 5c and 25c shares in companies before they were floated. Started with$ 2000 some went to be worth $13 now about $5 My first invest was pivot shares for 50c for a while they were worth $180 now probably about $60 Now my share portfolio is probably about 300 k but l have only put in about 30k of my own money. I got into property because I didnt know how to acess money in the share market with out paying huge capital gains tax. The bank will still consider them as assets when you get a loan. I have also dabbled in commodity futures market and lost 17k.once but also made a bit. Yes I have 1.3million in equity whatever the relevance of that is.
Intregue, One of the main reasons people invest in property is because it is a great way to store and create wealth, the main ingedients for this is inflation. While the value of your property is hopefully going up the value of your loan in real terms is going down. ie if inflation is 3% p/a a 300k loan after a year needs only 291k in buying power to pay off. other words inflation is paying off your loan to the tune of about $200 dollars a week. So why pay it off with earned money when it can be done for free. Any extra money can be put to use to buy another property so then inflation can pay of $400 a week of your debt, also the less you pay off the more the taxman will be paying off for you. At the same time you have 2 houses gaining value which is equity(money) you have gained which you dont have to pay tax on if you access it with a LOC but again inflation and the taxman can help to pay for this increase in wealth.
Well what a disapointment that turned out to be badger. I thought maybe your were a clever investor. I guess you just dont know what you dont know. May be you better read some more books. If you are as smart as you pretend you wouldnt be paying CGT or selling costs , especially if you bought quality investment property in the first place. You should get at least 10% growth and 4% yeild. Use low intrest rates in the UK to levearage in to the UK market with a 1million deposite. To sell a property last year wasnt very smart there was no real down turn only good buying opportunities. Also if your so smart you would know the fx rate is not an issue as it can be hedged. also I dont consider putting money in to super a smart move perhaps it is ok if it is self managed , but it is too restrictive and the fees are too high. If you property prices are falling obvoiusly you were not smart enough to buy the right investment grade property , it is still growing strongly. Property is usually at least a10 year investment why puy a heap of property if you plan to sell it after less than 4 years, must be bad investments and you cant pay for it. That is the only reason you would sell property. Your strategey seems very unsophisticated to me.
As a presenter at the ultimate susccess seminar I would assume Mark would have been given free tickets to the event as have other speakers, but unlike others speakers and passing on the tickets for free I noticed mark is selling them for $200.00 each. If this is the case, should some-one who has $500 million in property sell tickets, given for free?
Novice I would look at units in carlton. From experience and looking at data CG on units either exceed or at least equal that of houses. if you buy new units you will get a lot of depreciation. but with 50k you would only by older units that have already depreciated. With units generaly they are sitting on higher value land perhaps worth millions. The land to asset ratio is higher. If you buy a house in the suburbs the land component is small may be only be 100k and the house 300k then you have mainaince / garden issues to worry about. With a unit there will be a sinking fund and manager to keep it in good condition so depreciation isnt an issue, infact it s value can be increased by good management wanting to do improvements. There will be Body Corp fees but this is compensated for by low rates and Insurance.
James , with 10 k I think you should look at leveraging that up as quickly and safely as possible. A good way to do this is with a DPP (deffered purchase plan) You could get a loan to of $70,000 to buy units in the ASX 200 or if you prefer property the Dow Jones real estate Index. You can get a lot more bang for your buck it s quicker easier and you can get a lot more leverage than buying property directly and you get alot more diversity. The Royal Bank of Scotland will give you a non recourse loan (meaning you dont have to repay the the loan if the asset goes bad, a risk is that if the bank goes broke you have lost your interest payment)with 3 years intererest in advance for $8,0000 for a $50k comprizing of 3.3%, interest, you will need to pay another 1% for hedging you would need insurance for capital protection to make a total cost of almost 6%. Because you take out capital protection insurance the bank has little risk and this is reflected in low interest rates. I suggest you google JB Global they can facilitate these kinds of loans, and give you no bullshit advice. If you are in Melbourne I can recomend you speak to Jason Bibby . The only financial planner I have meet that I could recomend you at least hear what he has to say. Their fees are performance based ,10% of any profit you make.
Vinay, I would be cautious. there is often over supply of innercity apartments and not much scarcity value hence not the best capital growth potential. The tennants are usually young and mobile and will quickly want to move to the latest new fancy building, other words short term tennants. New buidings will be built and the older ones may become less desireable. I also agree with what Kate says.
I went to one ot the C&N semminars, at some expense and inconvenience, and was rather disapointed with the quality of some of the information. Some of the information was excellent, but some was inacurrate and I learnt I was doing things that they said cant be done. Even though my acountant says they can and the ATO never had a problem when they did an audit. I felt they were just pushing expensive and unnecessary products, though some have aplace in certain situations.
Pascoe if you buy a property through metropole it would be a good idea to lodge a caveat on the title, it only costs about $120.00 and could save you tens of thousands. They probably wont advise you to do this. Must agree with V8ghia I think they will push whatever property they want to unload, and only buy in expensive suburbs I guess so they can get more commision and ignore perhaps better deals in other suburbs. I have noticed some areas they warned about buying in have performed better than where they recomend, at least in the short term.
Yeh Pascoe , I went to Metropole with the intention of doing a development, but instead they insisted I should by a rental property. The finance broker they set me up with was a dud and wasted months getting a loan that was just way too expensive to sign up on. In the mean time prices went up 20,000k, two of the staff were very friendly and enjoyable to liase with but I was always getting some-one different to deal with and I found it impossible to develop a repoire or relationship with them. I felt just like a nuissance to them and they just wanted to get their job done as quickly as possible and get me out of their hair. I could go on and on. I found out I paid top of the price range, found minor faults they could not detect even when pointed out , and I was not happy with the leasing of the property as it was vacant for too long and the promised yeilds could not be acheived. Just a shame their performance is not as good as their self promotion. But I am sure they probably have many happy customers. Do a search on Metropole you should get more info.
Darvio If you are going to invest in proprety you are going to have to start thinking like an investor. Depreciation and tax deductions depending on tax rates means Peter and Paul can be paid at the same time, by Peter having less tax taken out of his pay packet. By leveraging of one property Peter is also doubling his assets meaning he can also double or tripple or more his capital growth . 10% increase on 1.2 m is a lot more than 10% increase on .5m. So Peter is getting paid twice. Peter has the ability to pay of his PPOR in perhaps 5 years instead of 30 by using income or more likely increasing equity in his IP. Giving Peter more tax efficiency by not havin to pay non dectible debt for very long third time Peter gets paid . The big pay off though is that Peter can Save 25 years interest on his PPOR.
Jim an astute investor only pays 5 or 10 cents in the dollar in income tax , they get tax free wealth through capital gain and pay their taxes through stamp duty. I prefer 3 sligthly – geared or neutral properties , more dollars worth apreciating. then one grossly neg geared property where you will have to actually go and have to do some work to pay off.
Clover I was hoping you would refute my figures and show how these units are cashflow positive. It appears as if you are having trouble selling these units and have resorted to devious methods to market them. You mention Aztec Devolpments under every topic, even under finance but don t mention who you got finance through to make these units +CF you would need to get finance at 5% to make these units CF+. It would be useful information for us all. But you mention Aztec developments organized it. Why is this post posted under investing in Mildura . Has this Marina been approved by council my understanding is it hasnt.
Yash , The name of the broker to not use is called, The Money Depot. A good broker can be hard to find, if you think one is not giving you an excellent deal dont be afraid to try another. The difference to the bottom line can be huge. Good luck.
Yash, I can tell you who NOT to use unless you want high rates and fees, want to repeatedly lodge papper work and want to wait months and waste time, the money depot.
Rob it appears to me in the examples the +CF is smoke and mirrors. The figures on the first example dont account for the borrowing cost or opportunity costs the of $ 59,000 deposite. Especially on an LVR of 90% the interest rate will be higher then 6.25%. You should account for a least 7% probably more. Interest on 425k @ 7% is 30k Income even with grant is 25k. Even with a loan of 365k the cash flowing in wont match the cash flowing out. I also notice you have to factor in tax deduction at a rate of 41.5% to make this appear CF+. and also count capital gains as cash flow. AS a stand alone investment I dont think it stacks up. There are numerous more efficient ways to minimise tax without deliberately making a loss. Another poorly implemented scheme from the Krudd government
