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Can somebody explain something to me? If the Central bank's interest rate is close to 0% and the cashflow from the property is +ve (assuming that the gross yield is around 20%). Why would the bank still provide a lend at 70% with interest rate near the 7%, rather than at 3%? Is it because:
1) they don't like the tenant?
2) they don't like the area that the property is in?
3) something wrong with the bank's appraisal system
4) all of the above?
5) none of the above?Thanks for your feedback
I am currently based in Hong Kong and the real estate funds that I am working for target institutional investors (minimum investment size is USD 10m). However for my personal RE investment, I am looking at KL (more of capital growth play with some marginal +ve cashflow) but more looking at US (Houston) for cashflow (net yield around 12%) with no or marginal capital growth. It will be a mix of capital growth and +ve cashflow.
Where are you targeting for your portfolio in Asia and Rest of the World?
Cheers
JohnIts a single dwelling home. Any thoughts?
just a quick question. For a good area in Houston. I have made the following assumptions on cashflow, would appreciate feedback from anybody here:
– 10% property management fee
– 10% (gross income) for maintenance
– $50 per month for insurance
– $100 per month for utility bills
– additional 5% contingenciesAre they enough? The purchase price is $200K and gross cash yield is 18.5% and with the above assumptions, my yield drops to around 11%. Does that sound right?
Cheers
JohnHi Martin,
For residential apartment in an area that will attract quality tenant, does it yield close to 10% net (after all expenses) and what is the borrowing rate based on LVR of 70%? Thanks in advance for your help.
Cheers
JohnDear all,
I am just curious to find out more re US residential real estate sector. From this thread, it appears that people are optimistic about Houston, Los Angeles but downbeat on Phoenix. Can somebody explain the optimism on Houston and LA when the entire US economy is in recession with national unemployment rate rising?
Cheers
Johndear all,
Just a question. If the population in Japan is aging as reported in the press, wouldn't it make sense to look at the retirement housing sector within Tokyo? I am not talking about buying individual units but rather buying a multi-retirement housing that can potentially generate good cashflow?
This leads me to my next question. I currently own 2 IPs in Oz, both of which are generating minor +ve cashflow (however not at a level where I can retire yet). I am currently based in Hong Kong and would like to build my portfolio of +ve cashflow properties in the following four countries, being HK, Japan, Singapore and China. What I am asking is should I start small or should I look at large-scale acquisitions (quite a bit of those in HK and Singapore now with prices dropping) and seek external investors?
Welcome anybody's comment.
Cheers
Johnthanks for your extensive overview.
Cheers
JohnHi Hawes,
I may be interested in +ve cashflow properties in Panama. However, just a couple of background information, what is the trend of population growth, how much of population is renters compared to owners for residential apartments?
Also, did you buy single condos or mulit-family condos which made you attractive returns?
Cheers
JohnI work in HK and was looking at buying IPs in China. It is challenging if you are a non-resident, possible if you have worked there for at least 12 months for Shanghai (not sure about Beijing, Shenzhen or Guangzhou). The issue is that the Shanghai state government has a strict regulation prohibiting non-residents buying IPs within Shanghai.
Hope that answers your queries. If you keen, can you look at some of the inner cities located West (Xian, Chengdu) which has not historically enjoyed as much capital growth as first tier China cities (Shanghai, Beijing, Shenzhen, Hangzhou, Guangzhou) which are located along the seaboard. The Government is trying to promoting developers to build low-cost housing for those inner second-tier cities. Scout for English-speaking real estate agents and learn from them re China market (its not easy to find because I am still trying)… Good luck
Cheers
JohnThanks everybody for the comments. However, with global credit crisis and slowdown in property prices. Isn't now a good time to look at Japan, assuming the current govt has 10 years of managing recession?
Would appreciate any comments
Cheers
JohnHi all,
I am looking at commercial property in NSW for $400K on 8.2% gross yield. However, I am looking for commercial lender who is willing to go up to 80% (because I have enough deposit to cover 20% deposit and settlement costs) without the lender jacking up the rates to ridiculous level.
Can somebody give me some pointeres?
Cheers
JohnHi Andy,
There is some very good comments and I am going to add my two cents to this discussion. Firstly congratulations on your savings when you are this young. When I started four years ago when I was 24, I had a small savings (more like $10k) but the first thing that I did was to chat to a good accountant to get my structure right, because I knew my long term strategy is to buy and hold, hence requiring the right structure to support this strategy. That was a big outlay back then to set up the right structure but it was the best decision that I've made. With this structure and a good team behind me (including lawyer and property managers in different states), my portfolio has expanded from one to four (increasing to five within the next six months).
P.S. I purchased my first property in south east Qld 4 years ago for around $100k.
whatever your decision is, good luck and ensure you have a panel of loyal and capable team behind you.
Cheers
JohnChallenges with Retirement Home and Aged Care residence is that they have an operator to run the place. Therefore, the net rental is significantly reduced. That’s my personal view
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JohnDreaming about financial freedom is all about taking some action TODAY. I am building my own successfully PART TIME business whilst still working in a Bank. If you want to know more, PM or email ME.
Make a sunset clause, if the vendor takes too long to consider, then move onto next one. When I bought my 1st IP, I bought it sight unseen but after only putting hundreds of offers with sunset clauses.
That’s just one of the strategy, read plenty of books and ask plenty of questions.
Good luck
Cheers
JohnDreaming about financial freedom is all about taking some action TODAY. I am building my own successfully PART TIME business whilst still working in a Bank. If you want to know more, PM or email ME.
just wondering when is the next meeting cos I am keen to join in and learn about ideas and contribute possibly?
Cheers
JohnDreaming about financial freedom is all about taking some action TODAY. I am building my own successfully PART TIME business whilst still working in a Bank. If you want to know more, PM or email ME.
I think the most important thing is to make a win-win situation, find out what builder wants and if you can refer more business to him/her in the future, that may enhance your chance of price negotiations and create a lifelong relationship for your future property investment portfolio.
Cheers
JohnDreaming about financial freedom is all about taking some action TODAY. I am building my own successfully PART TIME business whilst still working in a Bank. If you want to know more, PM or email ME.
Amanda
If you don’t mind me being in VIC, I would like to be on your penpal list, and bounce ideas off each other. Please keep me on your email list.
Cheers
JohnDreaming about financial freedom is all about taking some action TODAY. I am building my own successfully PART TIME business whilst still working in a Bank. If you want to know more, PM or email ME.
I have heard that if in your contract, the name of your purchase is yourself and/or nominee, I think it is possible. Regardless, talk with the vendor and the Bank and find out what other alternative is available.
Cheers
JohnDreaming about financial freedom is all about taking some action TODAY. I am building my own successfully PART TIME business whilst still working in a Bank. If you want to know more, PM or email ME.
As said by g7, http://www.vips.com.au does what are looking for..
Cheers
JohnDreaming about financial freedom is all about taking some action TODAY. I am building my own successfully PART TIME business whilst still working in a Bank. If you want to know more, PM or email ME.
