Forum Replies Created
Hi There,
I think you are about to run on a great journey ahead!!!…. There are a few things that you should perhaps consider before you go to deep down the rabbit hole!If you are looking for hte fastest way to get to where you want to go…. then you should consider the following suggestions.
Here is what I would do.1. Sit down and work out what yoau re trying to achieve and why you want to achieve it… if you do not do this cruicial step then the motivation will drop off as you will lose interest.
2. Get very specific right down to numbers …. eg " I want a minimum of 50 houses within the next 5 years… or I am going to be earning a mimimum of $50,000/month net cashflow per month"
=The more specific you get …. the better and clearer your vision will be"
3. set realistic short to medium term goals.
3.1 = Meet with your advisors (Accountant, Solicitor and Strucure Specialists) Set up your structure based on your goals…. There are a number of people that can assist you at this … the one I use personally is Garth Melville (NZ and International Structure Specialist) http://www.company-solutions.co.nz4. Once you have worked out the above you can then begin your plan of attack…. remember leveraged capital growth is the key to rapid net worth growth and success…. however you also need to consider your specific experience and comfort levels….. limit your exposure as much as possible as you gain experience … you will find your niche.
5. If you are lacking time or skills… then you can consider teaming up with a party that has the experience you need to get ahead without taking on board all the risks of in experience. This will rapidly get you stated while shearing the risks and problems.
6. Set up a table of growth….. set a target of say 4 properties are all cashflow properties …. and 1 capital growth…. and set up pods of these to get a great long lasting plan of attack moving forward….. don't let a negative gearing portfolio eat into your live style….. if you are paying tax … then you are doing GREAT!.
7. Set up target set points…. and give yourself rewards as you go …. nothing is worse and more demoralising than going hard on property and then getting bored as you have not given yourself any rewards for your efforts.
EG:
Target 1 = Buy 3 properties within 6 months … REWARD = Weekend away with the family to a nice peacefull beach!Target = Buy 9 houses withing 9 months….. REWARD = BUY NEW X-box 360 and 3 games….
Make it up as you go….whatever you want to put in there.
Target = Get $2,000,000 nett worth within 5 years = Trip to the Behamas for 2 weeks with the family! + Take $120K per annum loan against my portfolio to spend as I wish…
8. Keep networking…. get involved with your local investing club….. keep learning …. and keep having fun!
Good Luck with it all…. I am sure I will see you at some education seminar one day!
Cheers
Kiwi
http://www.rent2ownnz.comGood Point Terry…
I just completed a Lease option here IN NZ (Today!) with $235/week nett cashflow….. and for various reasons the lenders were only going to give me finance at 14.75%… which would have cut me out of over $5,000/annum in interest…. So I went hunting and got a good main stream lender to gimme a business invesment finance for 8.6% …. Nerver Ever Take No For an Answer….. I have my Wife To Thank for that one!
Cheers and good investing out there
Kiwi
http://www.rent2ownnz.comTysonboss1 wrote:If you enter into a wrap aggreement you will be paying more interest than you would be if you bought it and loaned the money from the bank,
for the simple reason that the investor has loaned the money from the bank to buy the house for about 8%, so he will want to charge you 9% or 10% because the interest margin ( the differance in the interest his is being charged and the interest he is charging you) is where the investor makes his money in the wrap deal.
as "mr fair go" said, if you have enough money for a deposit and a good credit rating and a steady high paying job,you can get cheaper interest from the bank,…
however if you have no deposit, questionable credit rating and income is not steady you are a higher risk, so anybody giving you money will want a higher return as a reward for accepting the higher risk,
Hi There … this is true in some cases …. however this is not the only way to make money in wraps….. if the buyer is all about the interest rate …. then match the banks….. and adjust he price or exit fee or some other way to softly make your profits back…. all is in the ability to flex where you can to create the win win and give the buyer what they need to get it across the line … the big one is to make sure they can service the repayments…. if there is any doubt…. then find another buyer….. or Lesae option it for say 20% above market rent .. .but for only a short term….. you'll figure it all out.
Cheers
KiwiHey Guys … what percentage return (ROI) is it … when you turn 9K funds into a $43K checque in only 16 months?….. must be around %???…. 358% ??? That is what I wrote my last cheque out for one of my recent joint venture partners ( 1/2 each of 86K Profit – TAX)………… The deals are out there….. Ya just have to match up those who are with you and those that need your help!
hey Guys ……
Sounds like you are getting frustrated with the market over there…. well that happens with any appreciating market that outstrips the market rent…. although the winds of time fix everything …. typically the rents will turn a cashflow negative property to neutral cashflow over 5 years (as long a population growth is netting an increase in the town or city you are investing in).
If you can't get cashflow with renting …. then you must add a different strategy … . to the mix…..
You can either trade the future profits in return of cashflow….. or ……. add value and sell off.
This can be done in a myriad of ways …… good luck!
you could try whacking some timber around the bottom skirt of the building (I am assuming it is on piles being a fibro)….. make a door for under house access … and paint it a half tone darker than the rendering work…. I am asuming you are using an earthy colour something like Stone Henge… or stonington Beige…….
Should look pretty good.Hey all … good comments here…..
My swing on it is ….
Just do something!
Basically there are 3 ways that most people have in thier skillset to make money out of property:
1. Buy and Rent – If the yeild is there…. this is typically in the down cycle or slump in the market
2. Buy Renovate and sell or refinance… if you can't get cashflow then you can get cash to do more transactions.
3. Buy subdivide and sell of the improved siteHere are some other suggestions that can get you to the golden path of freedom…..
4. Buy and add a minor dwelling to create more cashflow and increase yeild and value
5. Buy and add a room or change a room onto a bedroom to create more cashflow and increase yeild and value
6. Lease option to create more cashflow and increase yeild and value
7. Wrap (Vendor Finance) to create more cashflow and increase yeild and valueIf there some skills missing then perhaps we could all get up skilling to increase our chances of success in all market….. we must all move with the tide of change and learn to see the demand no matter what the market is doing.
Good luck all!
CastleDreamer wrote:Hi Tokyojoe, I see masteraccountants mentioned here. Quite a few Aussies are accessing his services for structure setup and accountancy in NZ… Cheers CastleDreamer NZ Investor and Property SpotterI have just finished with these guys and the structure they set up for me had a major flore in it!…..
It is going to cost me quite a bit to get through it now that I am not using them as my accountants…..
I will not go into details….. however….Make sure you get a second opinion from a well versed expert to get set up correctly for now and for the future.
Try Company Solutions (Garth Melville) …. he is a specialist in both international and national structure setups.
Cheers,
KiwiHi Robert,
Here are my suggestions.
Go to a broker … or I hear Kiwibank is offering 8.6% 3 years fixed.
Get an e – valuation from QV to give you an idea on the value.
Do some comps on what is selling in the apartment block in the last 6 -9 weeks.
Get 3 RE agents in to evaluate the property ( tell em you may be thinking of selling) – Get Comps off them to support thier claims to the sale … make sure they are within your complex that you are selling.
Put in an application and see if the lender requests a valuation.
Good luck.
Hi There,
1. Read through your agency management contract and find out what the exit term is if you are not happy with the service.
2. Interview other managers to find a better solution…. tell them you are pulling the pin and you want some references to call for confirmation that thier services are all that they are creacked up to be.
3. Once you have found the right team player (I have found that RE agencies are a waste of time as most of thier income is VIA sales … and they only manage your proeprty as a matter of course in hope that they can get the sale if it all turnse to custard)… find a privateer with a good reputation!
4. Get your new team player lined up to take on the problems if they occur.
5. Call the current manager and tell them they are fired due to non reconcilable issues and non performance and you want to know when you have have all the keys and tenancy agreement copies.
6. Time it in with your new team players and transfer across to your new system.
Good luck with it.
Cheers
ShaneAll is in the eye of beholder….
If you come from the side of the finance system that can get finance …. then it is hard to understand…. but if you put yourself in someone elses shoes that doe not have the opportunity …. then things change.
Really if you think about it … it is like going into business and having to pay top interest (14.6% and higher- as it was in my case)… to take the plunge into business…. because the banks did not like the risk even though credit ratings were impecable.
If you have all the facts …. then you make a decision to either do it … or not :o)
I do this in NZ and I find that as long as you give full disclosure…. and have integrity …. and a good system to qualify potential buyers….. then I feel it is a service that very few do …. and those that do not do it well …. get burned in the press.
Happy investing
I would do this….
ONLY If you are certain of the discount is REAL!!!!!
Get the property locked up with a deposit bond and negotiate a 6-12 month settlement.
with access to do renovations if necessary…. then get it financed on the new valuation in six months…. or sooner if you can prove a very significant rise in value by your efforts…..
you can also get capitalised loans that have higher in and out costs and interest…. but if you have good profits in the deal … then the short term high cost finance is just a business cost to get hte deal done.
Cheers,
ShaneA couple of Ideas:
– Go Below what you were looking to pay ….
or
– Offer your price and go for a soft discount (get them to pay 5% closing costs)
… or
– Offer discount price with a note paying more in 5 years
… or
Offer close to your price with a 6 month settlement + access for repairs and renovations…. this means you can add value without having to pay for hte loans yet … and even get it revalued prior to purchase to get some equity back out.see how you go…. if it all falls over …. just move on…. there are heaps of deals out there … always!
Cheers,
KiwiHey There,
The beauty of these instruments are they are all flexible……. I tend to work out what the total payments over the term, (from the tenant) are and then work out an annual scale plan ….. if they go the whole 5 years … and they are paying say 500/week then I subtract the market rent (say 300 in this example) and the total amount of over pay would be $52,000 now if they stayed the whole 5 years …. then I would give em $75K and take off 20% for each year they finish earlier.
So if your house was worth 300K now and in 5 years it is worth $450K they get $75K and you get $75K profit + it has cost you nothing during the 5 years….
You can either sell and pay out your payment to the tenant or refinance and pay them out and keep your share invested….
Basically you can work out what works for you and them.
If hte market softens …. then you can protect your interest by not stating a figure as such … but a percentage of the net difference between the start value and the 5 year value.
Good luck with it.
KiwiHey There,
Try this….. Call the local council and speak with the local town planner. He will probably sent you to hte local website to give you all the info you need….. while he is on the phone get the stages and costs perstage + Time frames … so you can plan well.
You will then need ot engage a surveyor and get it to submission stage….
Good luck with it.
Cheers
KiwiHey There,
I have done it before….. While living in Aussie on an NZ purchase 95% …. if you want to contact my broker … she may be able to assist. PM me if you want thier details…..
Tell then I put you onto them and they will take very good care of you!
Its not what you know …. Its who you know!Cheers,
KiwiHey Sarah ….
Thanks for sharing that one…. I have a house that had similar issues when I bought it and when I purchased it the day before settlement the tenant bailed :o)……. anyway I have had a bit of a run with tenants on it and still have hung on to it…. as the growth has been over 27% in less than 16 months…. It has still been a fun ride and now isthe time for me to divide and conquer on this one!
Cheers….
KiwiHi V8GHIA,
Thanks for your encouragement!
I am still finding deals in good areas in NZ that are in the 9% plus yeild range … and you are right though as it is the art of negotiation that brings the deals + the ability to screen quickly and sift through to those gems that have not appeared on the surface and work out how you can cut buff and shine the gem into a polished diamond. If we all evelop out skills in all apsects of property especially in personal development (Ha… I am one to talk :o)….. and just do it.
Even my own family sometimes say … far out you are lucky….. but when I was begging them to back me in the early days…. they I could not squeeze 10 cents out of them…… now they say (hey if I give you $5 Grand ….. can you turn it into $50K in a year??? …. of course I just say ….. yep … take one of my property courses out of my collection and read that library of 300 books FREE!!!!!…. thier answer …. nah …. too hard. – funny how things turn out….. now if they had said hey can you show me how this property stuff works ….. I would have said ABSOLUTELY…… lets get in the car and go and look at some houses. I did fold once thoug hto show my eldest daughter how to make $1,000 into $10,000 in less than 3 weeks ….. she was so blown away she listened to my next suggestion of putting aside at least 10% of her pay (shes is a student at hihg school) into a well researched mutual fund returning around 16% average to turn the $10,000 I helped her make into more than20 of million dollars in 48 years compounding interest. (ACTUALLY $27,076,160.72) see for yourself: http://www.moneychimp.com/calculator/compound_interest_calculator.htm
ANyway now my brain is hurting …. must be off!!!
Cheers,
open your mind and prosper …… always ask for help and alway give it back (pay it forward)
KiwiHi jamiedellam ,
I like your ideas….. I would like to assure you that your plans is very strong and it will take guts and copious amounts of resilience to others opinions…. epectially if they differ in opinion from you (what else is new right??).
I can give you some quick tips based on my own expereince: ( lived in Sydney until Dec 06) and had brought properties in NZ while living there all in a period of 10 months in rapid succession….. anyway to the point here huh ?? :o)
1. look at financing in NZ with NZ brokers ( got plenty of finance upto 95% and all while living in AUS).
2. properties that are returning gross returns of 9% and higher are still easy to find ( I usually pass them onto other investors and keep the higher ones that I find).
3. Give youreself a 5-10% finance buffer (if you can) to allow for any blow outs in your carefully laid out plan to success (this will cover rent vacancies and the un expected repair or mainenance issue that arises from time to time).4. Look for the hidden gems …. as the ones that stick out are gone before most find them (usually lots of cash to tantalise the sellers).
5. Build your team of experts …. don't kick yourself too hard if you make a mistake.6. Do something…. take action … and take it now!……. that is what success is all about ….. face the fear and feel the true reward for your courage.
Have faith that you will succeed…. I invested where many told me I was nuts and I made over 300% returns on my cash in the deals…. some were over 340% on my cash in….. eg I bought a house in Oct 06 in NZ and put in only 16K of my own cash and now have reaped the rewards and walked away with a net profit of $61K (NZ) not back in 8 months = 1032% interest on my investment ….
Best of luck wit hyour plans and I hope you prosper !!!!
Best regards,
Kiwi!Hey all … I have not been on here for a while and it sounds like a age old chicken or the egg debate :o)
I have done a lot of courses and have done Hans' more advanced courses (jumped past the basic one mentioned here)… I simply called up his office and spoke to Han's personally (you just have to take action) to see if I would have actually got any value out of what his first course (even the updated one) had to offer. As I have done most of what he had to teach in it including buying outside of my comfort zone in remote areas…. We were living in Sydney at the time (2006) and I bought a number of houses in NZ site unseen and had used my own common sense when purchasing them.This was all before his Property Masters course though….
Long and short of it is that those properties are now in a boiling boom of hungry buyers and the returns on my invested actual capital have been over 300%(PA) net. + they are all positive cashflow with gross returns of 10.4 – 14.5% (gross) but now it is time to move some of them and practice Steves (Mcknights) Divide and multiply theory to quantum leap into the next level. I am doing this (incase some of you are interested) because if I work off the current gross rent return divided by the current sale appraisals… .
the yeild is has come down to 6%,(so my buy and sell rules now come into play) which is less than what I can make if I was to put it in the bank right now in NZ (7.25%) + I am getting many deals that I am having to pass on as I simply am unable to keep them all…. time to move into a trading and partial holding phase of the cycle and hold some funds for some good deals as interest (mortgage) rates in NZ are now around 10.25%
I attribute part of my success to some of the advanced value adding Ideas I got from the mind provoking and challenging concepts Hans did on his 10 day NZ trip (all on DVD) …. and partly due to me just sucking it up deep and taking the leap of faith…. we all have to do it sometime. :o)…. worst thing that can happen is you get a short sharp pain of cold hard knowledge flowing your way …. but once you adjust and learn to tread water (the more prepared you are the better …. but you can only know so much too eh?)…. your eyes are now wide open under the water, when before you could not see any opportunities because the water was oncedark and forboding…… it is now full of other investors and bargains that you not see if you keep your eyes shut…..
so open your mind and have faith that this will all work its way out for you in a unique and mysterious way that only you can enjoy the experience……any way …. back on track here…. I say please yourself…. If you feel you are scratching your head over the whole course thing ….. speak to Hans directly and give him an idea of what you have or have not done and he will give you his honest opinion (he did for me).
Cheers and best wishes to you all…. in everything you do
Kiwi
http://www.housesolutions.biz
