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  • Profile photo of LeighLeigh
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    @leigh
    Join Date: 2003
    Post Count: 130

    Thanks David,

    It’s a good starting point, planning to take a drive up there in the coming weeks to check out the whole area. There seems a lot on the market for a town with only 2000 population.

    Cheers, Leigh

    Profile photo of LeighLeigh
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    @leigh
    Join Date: 2003
    Post Count: 130

    Thanks Marco [:)]

    Profile photo of LeighLeigh
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    @leigh
    Join Date: 2003
    Post Count: 130

    No Negatives in POSITIVE!
    From 0 – 130 properties in 3 years

    A real estate portfolio that doesn’t/won’t stall
    From 0 – 130 properties in 3 years

    A winning strategy in any market
    From 0 – 130 properties in 3 years

    Thinking outside the square
    From 0 – 130 properties in 3 years

    The $Positive side to investing for cashflow
    From 0 – 130 properties in 3 years

    Only accountants like negative geared
    From 0 – 130 properties in 3 years

    Looking for a book on real estate?
    From 0 – 130 properties in 3 years
    For $24.95 can YOU afford not to read me!

    And one inspired by the X-files…
    ‘The truth is out there’
    130 positive cashflow properties in 3 years

    Profile photo of LeighLeigh
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    @leigh
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    Maybe a more specific location listing under each persons user name.

    Example

    Leigh
    Member
    Melbourne, VIC
    34 Posts

    Cheers

    Profile photo of LeighLeigh
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    @leigh
    Join Date: 2003
    Post Count: 130

    My suggestion would be this…

    Does the bank care where the morgage payments come from? Saying this, if the deal is worth holding onto could you not come forward with the morgage repayments on behalf of the seller to avoid the foreclosure? You may also be able to take this off the contracted sale price (or work out some similar deal with the seller) so that it doesn’t come out of your pocket in the long run.

    P.S – The rehitorical question.. No, the bank doesn’t care where the payments come from [:D]

    Profile photo of LeighLeigh
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    @leigh
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    The Mystery Deepens

    As a part of my ‘creative’ due diligence process i jumped the side fence and had a closer look!

    The entire contents of someone’s house, including the kids toys, are sitting in boxes (untouched for a long time by the look of the dust) in the bottom level/garage.

    Also, the electricity is still on!!!! What is with that? I know no-one has been there for years, but the utilities are still connected. (I found this one out by flicking on an side light, which the switch was also outside for… hmmm it just gets stranger!)

    P.S – The property is newly constructed… Sorry Sooshie, takes away the ‘old mansion soft spot’ [:P]

    Profile photo of LeighLeigh
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    @leigh
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    Hey Freedom, if you took in the bit where they said the seminars have 60-70,000 graduates on their books, did you also listen to the part where 95-98% of people that attend seminars don’t follow their learning through with action?

    Don’t forget that a lot of the investors (and want to be investors) will attend more than just one seminar, so that 60-70,000 x 7 could easily be just 60-70,000.

    Profile photo of LeighLeigh
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    @leigh
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    Oh, and the deal offered… Works well $$$’s as long as the due diligence stacks up and the purchaser has a way of financing.

    11sec (or the 2sec!) rule works out at $65k for the combined purchase and they’re only asking $30k.

    Hilary,

    Are the returns offered permenant rental (with current tenants) or holiday rental? Also, is there any further managment fees involved if the tenancies are managed through the caravan park?

    Thanks, Leigh

    Profile photo of LeighLeigh
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    @leigh
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    Hey guys just thought I’d point out that the 11sec rule probably wouldn’t apply to this situation.

    To purchase these caravans you would eith have to

    a) pay with cash, in which case you would not have a loan to service and your return on cash investment would be approx 22.5%

    b) purchase on a personal loan which would mean your interest rate would be 4-5% higher than a home loan rate so your 11sec formula would need to be adjusted

    c) use a LOC (in which case the 11sec formula would work, but seeing as it’s a slightly differnet investment and things like expenses probably aren’t the same eg. no council rates, the 11sec formula may be a little off (probably for the better in this case).

    P.S – On the 11sec Rule side of things, it seems, like many everything in life, people make simple things seem very complicated. Why not try the way I do it, let me call it the 2sec Rule!

    If you know the rent multiply it by 500 to find out the desired purchase price (eg. weekly rent is $200 X 500 = $100,000)

    If you have a purchase or asking price divide this by 500 to find out the desired weekly rental (eg. asking price is $100,000 / 500 = $200)

    Or

    For those who are pretty quick with their numbers, drop the ‘000 and double for finding out the desired rental (eg. $100,000 = $100 x 2 = $200)

    &

    Add ‘000 and divide by 2 to find out the desired purchase (eg. $200 = $200,000 / 2 = $100,000)

    Afterall the 11sec rule is just a 10% return on the purchase price allowing for 2 weeks vacancy. Hope this helps [;)]

    Profile photo of LeighLeigh
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    @leigh
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    I think Robert’s approach of being simplistic is quite deliberate. How many books out there have similar motivational qualities, twice as much detail, yet they’re only another one on the shelf? It’s the books easy reading that helps remove the fear factor and complicity most people expect when entering the world of investing.

    And as for a conman?? Common, a man who has made his fortune by finding a way of helping more people fits perfectly into the picture of a successful entrepreneur, a good businessman, not a conman. Also, how many conmen do you know that donate a minimum of 10% of their income to charity?

    Profile photo of LeighLeigh
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    @leigh
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    Hey Guys,

    One reason a lot of investors will only buy significantly below MV is so that they can re-finance their deposit out in a short period of time. For example, if my bank will only lend me 80% LVR then if I want to be able to finance out my deposit in a short period of time (in order to keep the ball rolling and purchase another 1) then I must either purchase the property at or below 80% MV, increase the property value through alterations, or wait for the capital growth.

    Given the higher LVR’s banks will offer these days, 10% below MV is a much more reasonable (and I would think easier to obtain) figure, as many banks will lend 90-95% LVR.

    The investor must also factor in purchasing costs to his calculations.

    Cheers, Leigh

    Profile photo of LeighLeigh
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    @leigh
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    Hi Ally,

    Another alternative is to set up a company structure to purchase your properties. This way the income is taxed at the company rate rather than your income rate. There’s also trust structures but I’m not sure on the tax associations with them. Read through previous posts for a bit more info.

    Also, according to a Quantity Surveyor at a seminar I attended last year (Richmastery on the Gold Coast) you can claim full depreciation on fixtures & fittings even if the property is 100 years old and has a written down book value of $0 for all.

    The logic – YOU bought the property with the current fixtures & fittings, therefore they cost you money on purchase. If the previous owner said he was going to strip the property back to a shell before he sold it to you, would you expect it to cost you less or the same price?

    A good quantity surveyor will also get a higher than original purchase value for all fixtures & fittings. This is a combination of current replacement cost and an “estimated” cost for installation, delivery, supervision of installation etc. A good surveyor can get you upto double the current replacement value.

    Good luck, Leigh

    Profile photo of LeighLeigh
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    @leigh
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    Hey gogirl,

    To improve your immediate position you may want to look at refinancing your current loan in order to stretch it over a longer period of time. This would reduce the monthly payments and give you a little extra cashflow.

    This would of course only be a good idea if you’re going to use that extra cashflow for usefull purposes, such as further investing [:)] Read through previous forum posts to get an idea of what investing strategies may suit you best.

    Obviously you could use the equity in your property to begin building a portfolio. But keep in mind that if you finance out any equity your monthly payments will increase.

    Good luck, Leigh

    Profile photo of LeighLeigh
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    @leigh
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    Yeah that sounds like a better approach, $350’s only a small cost if you are getting the best out of your solicitor and keeping a strong team together.

    Thanks AD [;)]

    Profile photo of LeighLeigh
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    @leigh
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    Hey Guys,

    Sorry I’ve been away a few days, lots of posts in the mean time though, you really need to be on everyday to keep up! Interesting outcome with TAILS… Hmmmm, could see that coming!

    Anyway, I think my post came across from the wrong angle. It was supposed to be a round about way of saying ‘do the banks care where the 10% deposit goes/comes from?’ ie: if you can negotiate with the vendor to ‘forgive’ or ‘refund’ your 10% deposit will the banks care if you have none of your own money in the deal if it still meets their lending criteria?

    Another way I’ve heard of doing this is by way of clause ‘if the purchaser settles on or before “(settlement date)” the vendor, out of good will, agrees to refund the purchasers entire deposit’.

    A further suggestion (from Brad Sugars) is to pay a 20% deposit into a term account at the same bank you’re obtaining finance from. Under agreement the bank will lock this into a suitable term and class this as your deposit security and finance 100%. You can then increase the MV of the property or wait for a bit of growth, organise a revaluation/refinance with the same bank and they should unlock your term account to allow you access to your money (assuming 20% increase in MV, or a part of).

    Cheers Leigh

    Profile photo of LeighLeigh
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    @leigh
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    Supposedly most banks will not assess your income as a means of support if 70% of the rental cash flow covers all property expenses (including repayments).

    ie: Annual Rent = $100k
    Annual expenses = <$70k

    This can be done by either a larger deposit each property, the use of a cash flow favoured partner, or a very good purchase!

    You will only get 1 FHOG of $7000, so it doesn’t really matter whether it applies to 1 or all of them because it’s $7000 off the total anywhich way you look at it.

    Also consider the risk in putting all of your eggs in the one basket if you’re new to investing, you may wish to purchase several smaller properties then use the equity in those 2 or 3 years later to purchase a block of flats.

    Cheers, Leigh

    Profile photo of LeighLeigh
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    @leigh
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    For all those worried about interest rates and real estate prices.

    Please correct me if I’m wrong anyone that knows otherwise…

    It is my understanding that Australia is a highly developing country. It is also my understanding that Australia is behind many other countries in development, and ahead of a far greater number still.

    If trends are anything to go by you only need to look to the US at their property prices and interest terms. They have been a developed nation far longer than we have, yet their property prices are still climbing. Finance over there has not skyrocketed to 15 or 20% interest. Far from it actually, the current interest rate is as low as 2% variable (or less!) and you can get a 30 year fixed loan for 4% if you’re still not comfortable with the risk!

    I’m not suggesting interest rates over here won’t fluctuate, nor property prices. But one suggestion may be ‘if you’re not comfortable investing where you live or in Aust because of the recent boom and low interest rates why don’t you look to a newly developing town or country which may suit your risk profile a little better.’

    Profile photo of LeighLeigh
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    @leigh
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    PS. The capital growth in example 2 last year was estimated at 25% (suburb is under renewal).

    A question to everyone out there ‘is the QLD property market at a different point in the investment cycle (boom/bust) than Melb & Sydney?’

    Profile photo of LeighLeigh
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    @leigh
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    Hey Kirby,

    As a renter myself in Melbourne I first thought like you are – who in their right mind would pay $500/wk rent a $250k property, especially seeing as I live in a brand new townhouse for $280/wk valued at $380k!
    Anyway, here’s the $$ on a couple of properties I came across recently on a trip to QLD that might motivate you a little to keep looking.

    1. A 3 bed ‘duplex’ (2 lvl townhouse which can be rented as seperate lvls or together as 1) in the heart of Surfers Paradise, 50m from the beach and on the Indy track

    Property is rented (to full time tenents not holiday rental) for $650/wk

    Last sale price was $220k 8 years ago

    Property is a bank repo on the market for $220k! (my thought would be previous investor has defaulted on an interest only loan?)

    Could anyone guess the current market value????

    Unfortunately I missed out on this one [}:)]

    2. Several 2 bed properties on the market for around $70k each in outer Brisbane. Well rented at $140/wk. Properties are 5 yrs old, in security developments with around 40 others. Developments include pools, tennis courts, gardens & BBQ’s.

    Hope this helps, sometimes you just have to open your context to ‘maybe not where I live, but…’

    Profile photo of LeighLeigh
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    @leigh
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    Hey guys,

    Just a question on what the 11sec rule is you’re talking about.

    I’m guessing it’s along the lines of – if a property costs $100k the rent will need to be approx $200/week for positive cash flow? Similar to how I look at properties but I’ve just never heard of it called the 11sec rule.

    Cheers [:)]

Viewing 20 posts - 101 through 120 (of 129 total)