Forum Replies Created
Take your certificate with you.
I believe that one day when looking at the all ords for the last 30 years or so I noticed that the losses of 87 were restored in the next 12-18 months. i.e. if people didn’t panic or over-commit themselves all they had to do was wait a while and lose nothing.
Also, I think you will find a drop from $250,000 to $110,000 is very rare in real estate. There will always be some very high risk properties like Sydney high rise, but I can’t see the general suburban or country properties doing that. The idiots in the market can have a far greater effect on the value of a piece of paper than someone’s house.
There are 2 things I hate about shares:
1) The price often bears no relation to the value of the company – they can jump around in all sorts of random ways on a daily basis.
2) If you buy a property, everyone would say you were smart to find out everything you could about it, and to have available any information that the public or other purchasers did not. If you do the same with shares, you go to jail.Hey Steve, do you read these???
I want to know how many properties Steve has now, since he wrote the book. I think he said 160 at one time on TV. I had an idea he was nearing 200, but may be wrong. Is he still able to continue as before?? The proof of the pudding etc etc.
Isn’t it kind of pointless to throw up all the negatives such as “you’ll never get finance” when we know people who have dozens or even hundreds of proerties with no problem??
With -ve properties, you pour in money until you can afford no more (unually 2-3). Then you have to SELL them to get your money back. So you have a profit (maybe) but no more investment. You have to start all over again by buying more properties.
Also, with a REAL average annual growth of only 3% over the last 20 years, there are a lot of -ve gearers who didn’t make any money at all.
The point of cashflow is not that you make a million dollars in the first 3 years, but that you slowly build an income stream which will last for life and let you retire if you wish.
I don’t believe all of Steve’s properties are in areas that have something wrong with them or where something is about to go wrong. And yes, there ARE people such as retirees who buy shares and live off the dividends rather than speculating on what might happen to the price.
Re: cracks in slabs
We have a large factory in Perth, with lots of cardboard boxes for packing. That’s the termite equivalent of “next maccas 3km”. After frequent incursions, we had to have the whole slab drilled and injected. When we raised the boxes off the floor they ate the kitchen instead.
BTW, if you have a shed, veranda, factory or anything else with a non-reinforced slab (lines scored across it) then it’s MEANT to be able to crack. Sort of like granting planning consent for the future termite freeway!!
Were it not for the craziness in real estate, the government would like interest rates to go DOWN, to assist with other economic figures. However, I think treasury only gets one seat on the RBA committee. I also read that current rates are not that low, it’s just that inflation is, if you look at the historical margin between interest rates and the CPI.
Local factors aside, when will the US economy start to expand? Bush is introducing tax cuts to boost it. Historically, I’ve read that this has worked well in the past.
This is very interesting… I assume that most people on the forum are fans of, or at least interested in, Steve McKnight. Doesn’t this “did OK in the last 3 years but what about later” comment apply precisely to him and his ideas??? Personally, I worry about what will happen when interest rates rise and many of those properties go -ve.
Brad Sugars isn’t charging 10k to talk about real estate. The 2003 conference brochure lists 43 points of which only 1 targets real estate. It goes for a whole (5 day) week. Is this comparable with fees for other 5-day conferences held at a resort??
I’d like to hear from anyone who has attended, other than the tesimonials he distributes. These people talk not only about the money they made, but how it competely changed their lives.
In case anyone asks: I am not related to, or in business with Brad, but I’d like to be!!
I have been to 2 ($45) seminars, bought “real money real estate” and had an Action International business coach for a business in big trouble. We left it too late for the coach, but he did help us turn it around so that we could sell it.
You will find much of Brad’s stuff is similar to Steve’s. He is very much into no (or little) money down deals that don’t suck up your money. He isn’t totally against -ve gearing, but you need to get the money from +ve property. He has done some truly amazing deals. He uses business deals to fund the property after you chuck your job. He DOES sometimes sell, but to put the money into better deals.
As for the 10k, it all comes down to what it’s worth. If you want to buy less than 10 properties and sit on them, you don’t need the course. If you go to the course and don’t make the 10k in the first 6 months, you weren’t listening. Have a look at some of the testimonials.
Look at it this way. He’s VERY successful. When Steve has 5 sports cars, a $3M boat and tens of millions of franchises throughout the world, I’ll be convinced that he has all I need to know. If Brad’s course was 1k, I’d say “he can’t be making the kind of money he says or he wouldn’t waste his time”. This happened with NII – I knew these guys were making money solely from the $16k fee.
You can have most of Brad’s ideas by reading his books. The multi-day course is to get you moving & chnage your life. Some peolple pay that to go to a resort and sit by the pool for a week. (Brad includes the resort). If people are willing to pay NII $16k for a DVD and a meeting once a month, Brad would be stupid not to tap into that market. He gets into every area where there’s money to be made.
I didn’t go to the course because I’m not really interested in chucking my job and becoming a billionaire.
BTW the $3M boat was no money down and other people paid for it!!
There’s a new set of books out this year, with lots of examples. Should be online. You work out the capital gain and apportion it for the days it was/was not your residence. The “was” part is exempt. Then there’s the 6 month rule for changing residences.
I think it’s a good idea to read the books before you talk to an advisor. Not only do you know what they’re on about, but you can sus out the bull artists.
I LOVE the simplified tax system – one sheet and one book is all for a company, 3 books just to get started with the personal return, plus up to half a dozen others to read. They didn’t have the books until way into the new financial year, and I staggered down the street with a foot thick pile of paper!! The ATO doesn’t like trees, that’s why they disallow so many tree-farming schemes!
I believe that in order to qualify for 15-year exemption or the active asset test you must first pass the basic conditions for the small business concessions, which specifically disallow “assets whose main use is to derive rent” This would count out most of the people likely to be reading the forum. Check the business section on the ato site, if you can stomach it.
Hmmm… I think you need to get the front house valued. You have established the value of the back by selling it. You can then take (value of the back) divided by (total value) to get the proportion attributable to the back. Take this proportion of the original purchase price to get the cost base of the back land. The increase in value of the back is your capital gain.
I will be checking with the ATO on a similar scheme. Will post if there is any additional info.
I have heard that 50% of houses sold in Europe are private sales. Some cities have a high proportion of auctions. It’s a mentality thing.
I have done a few developments and the reason I decided to stick with an agent (even had my own signs made etc) was that the previous year only 36% of his sales came from ads. The rest were from people looking at other listings and other agents. I would have to be VERY sure of a sale to cut out 2/3 of my purchasers. Of course, the market is different now, and I wouldn’t dream of using an agent first up on my own home, as nothing ever lasts 2 weeks in our suburb, and there’s never more that 6 listed.
BTW, the agent sold one the first week and the other the second week, and that wasn’t when the market was very hot.
If you use an agant, try to find a really good agent you can continue to work with. There are so many who, even if they try, are a waste of time and money.
It comes down to whether you want to be pretty sure of being rich or slightly less sure of being VERY rich. If you use the excess cash after paying interest & costs to reduce the capital, you save about 6% interest on that amount the first year, 12% next year etc.
If you instead use the money as a deposit to buy another property you are expanding your portfolio without spending any more money. The question has been discussed on the forum before as to how much is enough. DO you want 130 properties with a huge debt, or would you sleep more easily with a lesser number all paid off producing income for the rest of your life?
The real problem is what will you do if interest rates pass 10% again. I don’t believe anyone can guarantee that would never happen. If you owe little, you will be laughing. If you can’t make the payments, you may have to sell a couple (at a good profit) to pay for the others. You will still have the others which you could never have afforded otherwise.
No-one’s mentioned Brad Sugars’ “Real Money, Real Estate” as far as I can see. Brad’s stuff is very hands on, and he has sooo many ideas in every area of business. His Property Wealth Wheel is an interesting idea. He talks a lot about businesses in his seminars, but mostly as a way to obtain money for real estate.
An idea:
By the time you have 130 properties, the average rent will probably be about $200 pw. The estate agent takes 10% to manage it, or $20 pw each. That’s $2600 pw. So you sack all the agents, and get your own PM to do what they do, PLUS pay the rates, call the repairman etc etc. Since you are going to get good tenants and be very nice to them, you won’t have to re-let very often.
All you need to do is find someone who will do that for $135k pa. Hey, if I give up my day job, will you let me know when you reach 130???
Of course, if you have cheaper (country etc) properties you may only be getting $100 pw and be able to pay the PM $67k pa!!
Does this work???
For the $135k salary you’d want to get someone with extra skillls, eg accountant, licensed estate agent or whatever.OR a really good speaker to do your seminars for you when you decide to spread the word!!!
Hi Paulette, I’m Michael from Perth
Consumer Affairs in most states are looking very closely at wraps. There is also a move to put property and property advice under the same stringent rules as finance and financial advice.
They are concerned that wrappers aren’t finance companies, and that purchasers don’t have consumer protection – if you default on your payments and the bank takes the property for example.If you buy and sell within 12 months you don’t get the 50% CGT reduction – if you are doing well you pay 48.5% tax. Also, you get large ‘lumps’ of income at intervals, so you may pay top rate tax one year and little the next. Even when you DO hold for 12 months, the 24.25% CGT isn’t too far from the company 30% rate, whereas 48.5% is a LOT more than 30%. Also, if you do this several times a year, the ATO will call you a PROPERTY TRADER and not use capital gains rules at all.
The company can pay 30%, hold/use the money, then distribute to you whwnever you like, you credit the 30% towards the tax payable at the end of the year (any excess gets refunded). Be aware that if you DON’T use a company you will have to register YOURSELF and pay tax quarterly.
You may wish to register for GST if you pay out enough GST to be worth claiming back.A company should find it easier to claim deductions for things used in running the business (computer, consumables, car, sending you to Queensland…). The ATO is very wary of giving individuals deductions for things which COULD be used personally.
I have been searching for reno properties myself and would be like to talk to you or anyone else in Perth interested in sharing ideas or collaborating.
[email protected][/url
