Forum Replies Created
Hi Richard,
Please understand that I ask these questions with all respect as, as I stated earlier, I believe you make a valuable contribution to this forum.
What if Broker X’s ppor was yet to be paid off but they were using some equity to finance an investment?
Would this not be smart and best use of the funds available to you?Cheers
Chris
Hi Bonnie and welcome,
I’ll be very upfront and let you know that I work for a company that provides investment properties as per how the company you have spoken with does.
I will also state now that it NOT my intention to sell you anything. I am responding to you only as a fellow investor and a fellow new one at that.I would firstly say that if you spend some time on this forum you will notice that Richard posts frequently and is always very helpful so you have nothing to lose following his advice
As Richard stated above, I would look very closely at how the finance is provided and by who. There is a very big difference between the company providing finance for you as opposed to an independent broker arranging the finance with you. In our case we put you in contact with a broker but they are totally independent from us, there are no fees and no commissions between our company and the broker. The broker receives his commission from the bank like any other broker.
Definitely, definitely do your research on how your finance is going to be organized.
Ask the question, “How is the finance broker getting paid?”As an observation and only as my opinion given that I don’t know your individual circumstances, I would be very hesitant to borrow an extra $50, “for an emergency”. You will be paying interest on this amount from day one and could probably just arrange that finance if and when you need it.
Speak with your bank and accountant about how to best organize your finances for emergencies, NOT, the investment company.I would also add that if this amount was recommended by the company you spoke with, I would then ask them the question, “Why do they think you need such a big buffer?” If this investment has the potential to cost you $50K in a year then I would ask yourself whether it’s worth the risk.
As Richard also stated, the suggested structuring is about right. It is the same strategy that we talk to our customers about but with one key difference in that we only offer investment properties with both a house and land component. We don’t build or therefore offer apartments. One of they key parts of an investment strategy of this nature, ie one driven by capital growth, is the land component. The land we package with our homes is sourced from the early stages of key developments where the land is sold at it’s cheapest. The subsequent stages are then released and sold for a higher price driving up the value of the blocks purchased in the earlier stages. In some cases blocks we packaged are now worth 40% more than what we originally sourced them at.
The question to ask here is.”Where are you expecting the growth?”.
Do your research on the areas they have talked to you about, don’t just take their word for it.This is also a key point to note. We are a building company. We make our profit on building the house, not on the land. The land is passed to our customers at the price we sourced it at.
With any company, I would ask the question “Where are your profits are made?”.Following on from this I would ask the question, “Who” are you dealing with? A building company or a marketing company?
With a building company you are buying off the plan and dealing directly with the builder. This keeps your costs “true” and if issues arise then you know who you are dealing with.
With a marketing company, there are possibly fees, commissions, 3rd party expenses that will be added to the cost of the investment and therefore add to it’s “true” cost.Ask them the question, “If issues arise, who you will be dealing with at any given time?
While we’re on commissions. I get paid a flat fee from the company I work for, therefore there is no incentive for me to sell a customer a more expensive investment.
I would ask the question to the sales person you have dealt with, “How are you paid? Do you get a bigger commission if you sell me a more expensive investment?”
Where are his/her interests?To wrap it up I would say this.
This is one particular type of investment strategy and one that works quiet well for a lot people. And it does work. But you still need to be proactive, you still need to do your research, you still need to know how you’re getting into the deal and just as importantly, how you’re exiting the deal. You must know the numbers in the deal and you must be able to afford it.
I sincerely wish you all the best in your investing future.
Cheers
Chris
Hi Everyone,
Just checked with the office and these tickets are still transferable and looooodikrissly good value for money.
Cheers
Chris
Thanks Christian and Richard, you have both been very helpful and even though it seems like it was a bit of a ‘how long is a piece of string’ kind of question it has given me a place to start.
Thanks again
ChrisHi Melbproperty,
First up, congratulations for putting yourself out there and taking action, you’re already on your way to being a successful investor. Well done.
Now I’ll also put my hand up and say I’ve also joined up with the RESULTS Mentoring Program and did so because I did my research and concluded that it offered exactly what I needed at what I think is a great price.
A university education costs money.
A Tafe education costs money.
Even an apprenticeship will cost you money.
Education costs money,
Yes you can find plenty of legitimate information on the net for free, read it, use it, take advantage of it, BUT, you can also find a 3 tooth hillbilly who swears he just saw Elvis flying a UFO over his latest and greatest 101 lot development and “would you like a piece of the action maaaate?!”
So I think you’re on the right path and sound like you’re a smart person so do a bit more research and have a look into paying for your education if thats what you want to do, look into the people who run whatever program you’re interested in, look into who they’re associated with, (how does the saying go? “You can tell the character of a man by the company he keeps”) and don’t be put off by paying for education.
And as for smelling like “roast lamb”? for seeking a mentor, what an insult!
I think you sound like someone who’s keen to learn and who understands that, that will come at a cost. Giving up a cut of a deal to get the deal across the line is just common business sense. Can you say “Joint Venture” Saka888? This little property investor I know, um what’s his name again…..oh yeah Donald Trump does them all the time.
And what would be the point of only getting together with ‘like minded friends’ and ‘just discussing property’? I know that me and my ‘like minded friends’ are all at the begginning of our investing journey and our knowledge limited so why not seek out those who know more than you and are successful, and do as they do.
I also found it a little funny that Saka888 poopoo’ed all over your idea of seeking a mentor but then offered up his email to discuss property with you, presumably because he has some information that he thinks might have some value to you and might also prevent you from making a mistake. Hmmmm sounds a bit like something a mentor might do.
So, good on you Melbproperty, keep going, educate yourself any way you can and for as long as you can and never ever let anyone be the wet blanket laying across your dreams.
Cheers!I just joined up with this group, http://www.meetup.com/Melbourne-Tax-Liens, if that helps anyone else who’s looking to catch up and share info.
Cheers
ChrisHi Kwanzee.
Do NOT let your friends bring negative thoughts into your head regarding the positive choice you made in choosing to educate yourself rather than turning your brain to mush by sitting in front of a t.v.
I’ll be there with you working towards our financial independence while your friends are at home turning into zombies!
Education is king!Made me laugh Dwolfe! I did that same drive regularly when I was younger also. Was hard enough without being drilled by my elders. I feel your pain.
…and while we’re on products and selling, is there really any difference between the people on stage and the people in the audience?
We both have a product, (real estate/educational system) that we’re developing/constructing in some way, (reno, subdiv, developing/book writing, system developing) that we’re hoping to sell for a profit to those that have a need for it.
Just something to think about.10 out of 10 jleong! I bought it too. Might be a big call but probably the only product that everyone should have gone home with! Best value for the $ product of the day!
Hi everyone,
I thought it was interesting to notice who Steve chose to share the stage with.
Cheers.I wish they’d just call a spade a spade and call it ‘Public Stupidity Insurance”!
Cheers Duckster, I will check out those links. Thanks. I probably didn’t make it clear in my post but I’m only looking at purchasing the block, subdividing it and then selling off the smaller blocks, not doing any construction as such other than having all the required services connected. Big Cheers again to you. Ta.
I was listening to the webinar today and the start date for the 2010 program is 1/07/10. I guess to make things nice and neat around the financial year. Todays webinar should be on this site somewhere to listen to again. There is an earlybird special where if you pay the fee upfront it will only cost $5960 (about $4k/$5k discount) you get access to a whole bunch of info etc etc but not the mentors themselves (commitments to this years people) so that you can study up and even get started yourself I guess which I guess then begs the question of what is it that you need from the program? Is it the info or the mentors themselves etc etc.
These are all the questions I’m asking myself also.
hope that helped
cheersThanks for your thoughts Terry.
Cheers.Hi Wylie,
the problem is specifically related to the utilities and dividing up the costs of these between different units/rooms within the one structure and therefore one reading.
Thanks for the feedback anyhow.
Cheers.
Chris.Thanks for the info Terry, it was very helpful, appreciate it. The following discussions also got me thinking about some of the complexities of an economy. Good to be here.
Cheers.Like Kim, I attended the masterclass today and not only is this my first of three posts, but my first post here ever. I got a few things out of today on several levels. On a practical investing level, a few things that were hazy and therefore preventing me from moving forward with investing, became clearer. There’s still some stuff I need to find out, (that’s where my other posts for today will come in handy) but at least I’m moving forward. But I guess the biggest thing I got out of today was inspiration. Seeing and hearing from ordinary people, some in much much worse financial situations than myself, (big cheers John and Ronda), about how they made property investing work for them, was a reminder that I can do this and make it work.
Cheers!
