[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

March 12, 2004 - 8:13 pm

“Hi Derek, Can you tell me why you would ‘run away fast’ if there is a rental guarantee? Is this because they have basically built the rent intothe purchase price or insurance cost?? Just wondering.”

Most of the time it is, Mirvac for example gurantees to pay rent for 1 yr. The problem is that is indeed built into the price (One of my mates was a contractor on one of the larger sites, so I was privy to some interesting stuff!).

If you decide to go with thse people make sure you get good independant advice (Esp. in terms of prop. value!!), and as Derek said how much control do you have??? You don’t want to give to much away. Also do NOT accept their figures at face value at all. Always run through them yourself, or ask one of the many contributors on this foruum to help you out!!

With units beware of Strata and management fees, alot of the time these can be avoided but companies skim alot of extra profit by saying they are neeeded, and you can’t do much about these added costs (for holiday lettings there my also be a large advertising fees).

There is nothing wrong with people holding your hand, you just will pay for it (as it is a service) along the way, just make sure there not getting paid too much for the service they are offering.

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

March 10, 2004 - 4:54 am

Q: Are the books Mortgage Magic, Dolf on Property, and Surprising Lessons in Real Estate available?
A: Mortgage Magic, Dolf on Property, and Surprising Lessons in Real Estate are currently in production with a scheduled release date of mid 2004. Once available, we will send an email with all the details to everyone on our mailing list.

(It hasn’t been released yet).

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

March 9, 2004 - 1:22 pm

As crj says “Different strategies suit different people”, so only you can say if you are doing the right thing or not.

My only caution would be, that you can meet the costs of owning a negatively geared property (Please add income protection to that as well), and what is the intention?? To sell off?? Or to pay down the loan???

Just a few thoughts![]

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

March 9, 2004 - 1:10 pm

I would hearlty recommend John Burleys book – it could literally save you thousands. While it dosen’t have that many “creative financing” techniques it will give you solid level 4. I cannot tell you how important it is to understand the steps as you could be doing very creative level 5 dealings but blow it all because you base is so poor (i.e. your base is level 4, where you take control of insurance, super, how to pay off all consumer debt inc. house in 5yrs, how to really take control of your own finances, etc).

If your wanting to get rich quick without real work (i.e. getting level 4 down pat) it won’t probably interest you…. If thats your plan all I can wish you is good luck. Otherwise it is a fantastic read.

I have never read any of Turnbull’s books, so I can’t really comment about them…

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

March 4, 2004 - 1:48 am

Right now I’m doing a RE deal that is returning my investors 40%, secured by a 2nd Mortgage (bank has 1st Mgt @ 42% of Value, Investors have 58% of value).

There is some downside though – minimum investment is in $50K to $100K lots and a holding period of 12mths minimum (stretching further to 6 months if we are having difficulties (though with 9% paid per mth.)). Also we are quite particular about our investors.

Yes there is a risk that the market could come crashing down, but my investors know that I have done my best to protect their interest, and so they should get their money back if the deal goes horribly wrong (though it is not capital guaranteed).

A lot of other deals are mezzanine finance, which offer high returns but usually have little or no security. For that it’s best to get a long-term history of the principals involved.

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

March 1, 2004 - 2:22 am

You also have to remember that Uni holidays last for about 3 months (Dec->March), so you will have to factor that in. Also perhaps reduce the rent a small amount and take a larger deposit to cover any damage.

Also why not buy another property around the area for $250K+ and do the same as the other people are currently doing. Also you can add great services (cable TV, Cable/DSL internet, etc whiuch can boost the rental return).

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

March 1, 2004 - 12:47 am

“Capitalisation tick box – Please Explain”

This is where costs (such as mortgage insurance and application fee) are added to the loan (so your actuall borrowings increase). I thought a tick box was a good way as a simple click and it’s added to the loan.

As I said before it’s a great little program, simple yet highly advanced.[]

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

February 29, 2004 - 2:53 pm

It seems tops! I calculated my COCr a bit higher (by hand), but certainly in the accetable range anyhow .

I think many people (esp. on dial-up!) would be turned off with the 23MB .NET D/L. Even on ADSL it was round 6mins (at a very high D/L speed…).

Also can you put in a capitlisation tick box (as I get all my loan costs where possible). This could add to a saleable difference…

Lastly my help file executor has become corrupt so I couldn’t look up (or figure out) your ‘Deductions’ section, with the ‘memory’ (1,2,3,4,5 boxs) section, but I guess with the help file all would be explained.

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

February 29, 2004 - 1:54 pm

It looks great for negative gearing… but what happens if you are positive gearing???? Of course the figures don’t work out… But wouldn’t your target market be bigger if you could put in option for negative gearing or cashflow postive properties??

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

February 26, 2004 - 3:22 pm

I can see it become one large spam topic – and if that dosen’t happen – can you imagine how many people will be using ‘spambots’ to advertise… well everything!.

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

February 26, 2004 - 2:07 am

Good info Bryce.[]

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

February 24, 2004 - 3:05 am

Lucifer, it is my understanding that there isn’t mcuh difference these days between investment and owner occupier loans.

->There is if you want FHOG.

“Also, the bank should be more than happy to see written down anything about extra income to support the payments. It may help the loan across the line.”

->The Bank will want it to be put down as a IP loan, rathr than a normal housing loan, making it more diffiult to get FHOG. Also it’s harder for valuers to define a rental income from say just one room.

“Banks still do accept guarantors, but they will assess the income of the guarantors. Unless there is none, they probably will still let the deal across.”

-> According to my Mgt Broker they will accept it, but it won’t make a major difference in whether your loan gets accepted or not.

“Don’t forget the CGT ramifications. If the property is only in your sister’s name and she lives there initially then she can exempt any capital growth from tax. A 50:50 arrangement will expose half the gain to CGT.”

-> If you place it into a trust/company structure, your parents could buy the IP (i.e. the bank will look at their income) and your sister could pay the deposit, but she still keep the FHOG avalible. Shares could be given out to your sister, and a family RE empire could be born!

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

February 22, 2004 - 12:42 pm

Just to clarify they don’t like Garauntors because of bad publicity / media when they are forced to take over other property.

Also there are two ways of going either a Investment loan or a house loan. If it is a house loan she would proably get the $7K FHOG, but will not get rental income factored in (from the bank), if it goes investment loan she will get rental income but no FHOG (she can also get IO loans rather than P&I which up the repayments)… I would go with the home loan (though you lose major points in servicability). Also do NOT inform the bank you might rent out one of the rooms – they will demand you turn the home loan inot an investment purposes loan.

Also Family and Business….

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

February 22, 2004 - 12:35 pm

Banks want to see long term stable income, and so currently they wouldn’t lend to her (unless she went with a 20% or more deposit, and even then they might not lend the money req.).

Banks also don’t like going Garauntor mainly because if she stops paying they might be forced to liquidate the property holding of the garauntor (i.e. the home you live in), also there are certain legal issues banks don’t want to deal with if possible (usually they will accept it, but this will have no major bearing if bank finance is approved or not).

A possible way of doing it is to go 50/50 into a property deal, that way the bank will feel a lot more comfortable. You would also be able to start a trust with company trustee to stop your assets being involved in any personal lawsuits.

Or she could wait (while holding a job) for a month, banks would probably lend to her, without needing garauntors, if she had 3 payslips.

I would be making services of a mortgage broker for this kind of deal mainly because lack of a job and the short time if she is employed again.

So anyway, summing up 50/50, very large down deposit, or wait approx. 1-2 months get income from employment and then approach bank through a mortgage broker.

Also factor in repairs and higher vacancy rate than normal property.

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

February 18, 2004 - 11:38 am

According to Neil Jenman agents collect alot of $$$ from media kick backs. They show a RRP to you (and you have to pay it) and they are buying it for 20% less (or the media gives them a comission or kick back for it).

To chose an agent, and your not in a hurry to sell I would see which ones recommend a auction – and then I would steer clear of those (some times it’s easier to eliminate the bad, rather than trying to figure out the best).

I would pick up one of Neil Jenman books as it gives the reasons why with real life cases – quite scary reading some of it….

With advewrtising I would demand a written fixed cost for what they have in mind, then figure out how much you want to pay and then fix the costs round there (after you’ve taken into consideration what they think advertising will be).

But then I’ve never sold a house (and never intend too!).

Just be aware he is extremly negative on any type of real estate transactin that dosen’t involve a RE agent (like wraps, buying off plan direct from the developer, etc – although all these are quite legtimate).

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

February 17, 2004 - 12:19 pm

A trust is an entity, just like a corporation (or company), as an entity it is seperate from you.

Usually a trust is used to avoid have to pay the full 30% CGT that companies have to pay (individuals & trusts only have to pay 15%). It is also used for asset protection, as if you are sued personally it can be much more difficult (almost impossible) to claim assets from your tust. Usually you hace a trust that holds the property and a company as the trustee.

A LOC, is a Line Of Credit. It is where a bank allows you to borrow at a ccomparible low interest rate (compared to credit cards, etc) from your property’s equity very quickly. You have to set it up with the bank before you can use it. As you can imagine you can quickly put a deposit on a property without having to save up.

Rgds.
Lucifer_au

[FFCommMember@ffcommJoin Date: 2004Post Count: 627]

February 12, 2004 - 9:55 am

Well it looks like I’ve lied!!! The first one is P&I!! AARRGHHH… [:0][8][:0][8][]. Well the next ones will be I.O. So the repayments should be around $68p/w. Apparently though they don’t like the risk (rather than a serviciability issue).

Again ANY HELP much Appreciated.

Rgds.
Lucifer_au