Forum Replies Created
Try Steve McKnights 2nd book, as there he goes into how to “find” opportunities and create +CF.
Hellman
If she will carry, why don’t you get a no docs at 65% LVR. That way she gets a big hit upfront.
Hellman
Is property the absolute best way to make money?
Yes, where else can you find a way to make $$$ while u sleep and still capture Cap. Gains (many peoples houses have double, or risen 100%+ over the last few years).
As for share trading, it can be good, but I know many more failures than winners. And with property unless you have done some thig extrodinarly wrong you will never lose all your capital (unlike with options and derviatives – when the market turns – Ouch!). In my opinon the risk are alot higher too (look at NAB forex losses – and those were small – look at Long Term Capital creating a $1Bn black hole using options!).
As for the 1,400% that would mean that your friend on $1Mil (which would not be hard for your friend to get from either private investors or a trading firm) would make $14Mil.
Also Warren Buffet dosen’t trade shares. He buys companies. When the sharemarket valuies companies to high he buys other assets (such as oil pipes – no shares there!) or buys companies that aren’t listed on the stock market.
My Q – Take a $29K Cap Gain or $25 p/w for the rest of yr life.
Gross Relisation has proved a perfect outline of the pros and cons. If you were going to go through with it (though as I said before I seriously suggest you take GRs advice) would be to triple check the vacancy factor as well as the rents you can get.
Also there was no managment fee or maintainance fee in your figuers. If you had a plasma TV and it broke, that would seriously eat into your cashflow for a replacement.
Hellman
Or of course there is Steve McKnight’s Investment Detective.
-> https://www.propertyinvesting.com/resources/24.htmlHellman
“How do people feel this affects the investment?”
If the are is in demand from those type of tennats then it shouldn’t be a problem.
Also it being residential could mean you could see to a developer.
Hellman
Commercial
Pros-
~Higher CF
~Tennants pay for outgoings (usually)
~Sometimes higher depricationCons-
~Higher Deposit Required (Minimum of 30%, usually more like 35%)
-Once a tennant moves out it can be much harder to attract a new one (unless you offer cash backs, which decrease your yield – city offices).
~Can be much higher risk:
-Can have much higher highs and lower lows than residential.
-Commercial RE Markets can be very independent from the general property market (so just because residential rises don’t think commercial will – though it can).
-Smaller market – with residential you can always sell to a home owner or other investor, but usually with commercial there is alot less buyers (only other investors).Of course this is rather academic as it depends on what type of commercial property.
Hellman
29,000 public sector job losses…. I read recently a senior labour figure quoted approx 33,000 PS jobs were not needed.
I am delaying alot of gratification for long term gain. But it won’t be long before it tilts to gratification over money. Though I must say doing deals is fun.
Hellman
Thanks Hellman,
“So is the thinking the same when it comes to general residential property?”
>Not really, see if you select’established’ house suburbs, usually developers aren’t going to target those areas (and flood the market). Also you usually get a higher density of home owners which means you’re never going to get a flood of sellers (due to a down turn – home owners tend to do what ever they can to keep their house). Also another big factor is that with units unless your property is radically different from another in the same unit block it will go to who has the cheapest price, where as with houses you can always differentiate your property from other sellers (to a large degree – of course you do have to be mindful of the average of that area, but you can do more than an apartment).
Once you get a few IP’s under your belt, is the bank still “assuming” you need to cover the repayments on every single one out of your income?
>Ironically you can get to a position where banks see you as too rent reliant! In the end it’s about presenting a strong case to the banks and working within their lending policy (no matter how wierd they are). As a side note usally banks will look at your total rents then either take 80% (or as low as 50%) of that, to factor in vaccancies and other costs (repairs).
And so basically, it would be better, easier and possibly?? just as profitable to look elsewhere (outside inner city). But in saying that, how do people end up owning inner city apartments? Is it a case of having way too much of their money tied up in them?
>I know many apartments were sold to existing home owners as investment properties. They were sold mainly on the high deprication rates. These people had a huge amount of equity tied up in their homes (since they basically increased by 50%+ in the last 4yrs) and pulled that out to pay (allot of the time they wouldn’t even have to throw in $1).
Also banks were throwing alot of money about so there were few lending restrictions, these seemed to have been tightend. Now they are being sold more to (usually first) home buyers.>In the end I’m not saying apartments are bad (or good) I just think you really have to make sure you’ve selected the ‘right’ one (more than just say a regualr house). Usually this means close to shops, transport, etc and your proeprty isn’t going to be built out or have a massive supply come onto the market near where your buying.
Of course buying the ‘right’ one might your buying at a significant discount and so there is enough ‘fat’ in the deal so that you won’t go backwards (even if prices stagnate or even fall a bit).
Hope this helps a bit.
Hellman
Because of the massive amount of supply for these type of apartments, banks are very reluctant to lend on them. Also when they are 2-3yrs old they tend to rent for less than ‘new’ apartments (which are seen to be newer/better by tennants).
As for -gearing your servicability comes mainly from your income. In the ends the bank only care that you can afford to meet repayments, even while the apartments is empty.
Hellman
As long as you charge market rent, what you are proposing is very achievable.
You may have to prove to the AT0 that the rent is market rent. Simply get a few RE agents around an ask for their opinons of what the proeprty would rent for.
Hellman
The con with land banking is two fold. 1) No income; 2) It can take a very long time (which can also have it’s bad points in terms of different Gov./Council agendas).
Hellman
My guess is that you are repo’ing the house to pay the solicitors debt and when you have stumped up the full amount for what you paid for the property, that will pay off the 1st mortgage.
Perhaps the same solicitors had lent out the funds (some solicitors have funds of client’s money which they lend out) and are now selling the property because the owners have defaulted. And as such perhaps they don’t care whos in the house, they just want their money back…
Or perhaps there actually just selling the house and not the land (so the land has the 1st mortgage on it).
Can you contact the solicitors?
Helllman
I just was thinking the same thing!
Creepy Hellman
I don’t use a bank manger for finance (although I have a ‘personal banker’ – I just don’t use them) because I find mortgage brokers to be better. The mortgage brokers on this forum are in my opinon great. Their high level of knowledge and eagerness to help and explain is a fantastic resource.
As for other team members (lawyers, property managers (PM’s) and RE agents) you can always ask peoples advice right here on the forum. Most times they will suggest someone who can help.
Being young does have it’s downside but it does have an upside – youth. You’ve got time on your side which is probably the most valuble reource in itself.
You only need a couple of runs on the board to get you started.
Hellman
pabbs73 – “Does anyone know of a ‘Switched On’, financial adviser/broker”
—
Beast – “actually Im looking for the same thing but I’m in Sydney.”
—
Beast – “I never said I wanted a broker.”
—I’m confused! Beast if you are looking for an advisor it is very difficult to find a finacial advisor whom knows about property, because they make no income off property. They make their money (or comissions) by recommending managed funds (very few financial advisor will even recommend stocks).
My mortgage broker is my advisor for a whole range of issues, because he spends alot of time (and money) getting the latest info and giving it to his clients.
As a side note he has never advised me to do anything, he has simply let me know what other investors are doing, because if he did ‘advise’ me he could be legally liable (i.e. I could sue him) if I went bankrupt or made a bad investment decision.
Hellman
Probably not…
As a watchdog it has to be able to guard property, and really I don’t think a susage dog could do that (for example it couldn’t really chase thieves that well).
However if you did alot of short term accom. then you *might* be able to claim the animal for public relations / marketing. For example if you used the dog on say your web site for accom. to say that your accom. was dog friendly then perhaps. Of course it would really have to be a part of your marketing to qualify.
(For example there was a lady whom ran some accom. near a huge competitive dog showing arena, and her dog was heavly used in the promotion of her biz – website, biz cards, newsletters, etc. In the end she was allowed a tax deduction because of this).
Hellman
60 days!!!! I’ve had home loans with corporate trustee (company) and trust in 30 days (damn valuers always taking too bloody long….).
Hellman
Best to go here for your question on mobile parks (as in Aust. it’s slightly different – finance, etc).
MMF – Jerry Hoganson’s MobileWealth Forum
http://www.mastermindforum.com/phorum/list.php?f=14Hellman
grossrealisation can you perhaps show us your workings when working out what is FMV for coreyjay’s property – I would be very interested in learning this methodology.
Hellman
