[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

September 11, 2010 - 3:58 am

mrtender wrote:

I suppose some kind of clarification …. I have an opportunity to buy this empty building for $1.6mil … and put in a tenant on those terms…. I want to sell the building immediately after the tenant moves in… and make profit. The tenant is secure, and established in different premises and ready to move. If I do this I want a quick sale… I want them in… and the building sold within a couple of months. Should I do it? Any opinions as to what I could sell the tenanted building for… and for it to sell reasonably quickly? And the market at the moment? Is there a "downside" i should be considering? Risks i am not seeing? What kind of return will an investor want that will ensure a quick sale? I dont want his to drag out…

Good luck achieving that on the Gold Coast in present day.

The vacancy rate for offices is circa 23-25 % at present. Industrial may be similar…..give or take

You need to ascertain what is the cap rate of the precinct/locale you are looking at for similar assets. In other words what should be the expected yield (in this market assume high yield reflecting a lower price) then discount the rent as you have done and work out a price capitalising the yield into the rent to achieve a cap value…then you are assuming there will be buyers. The resi market there is a basket case at the moment, so extrapolate that risk into the commercial sector…..caveat emptor.

Tread carefully there in the current climate and do not presume a quick turnaround. If you already have some likely tenant interest lined up then well and good. If not, do extensive due diligence on that market.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

September 1, 2010 - 4:24 am

crusty wrote:

  I dont see  marks name on queenslands top 100 rich list , about $ 60 m should get him on it.

I read that list from last month also Crusty.
 
Valid point, considering he espouses nearly half a billion dollars of works under management……one would have thought that 60 mill net would have got him a ticket.

You must however appreciate that running a Porsche Racing Team con$ume$ considerable fund$  

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

August 29, 2010 - 10:09 pm

Hi ya Octain,

octain wrote:

Michael respect you opinion but got to say I think I take a different view. I live in a McMansion estate in the western suburbs. We had a land release last week where they had raised priced of land by 20% and still sold 50 blocks in 2 hours. There really isn't enough and if we need to build houses there isn't much we can do about it. Not sure why you think these areas will become slums but like everything estaes have got better with time.
 
Nowhere in my post have I intimated that these areas will become slums. My contention is that with further and further sprawl, the infrastucture will not necessarily follow suit. Especially health, hospitals and the like. There is no hedge to protecting people's investment in the land they build on if they keep carving up blocks ad infinitum

You do not mention which suburb you are in. Perhaps you are already in infill areas, if you are on the fringe, then I stand my ground, you have little hedge to values being protected; only protection is holding for a very long time. The 2030 strategy has been all but ignored and instead of utilising and optimising hubs and designated min-CBD or sattelite activity centres and going up, they continue to pander to the land companies and accommodate outlying housing. We need more housing; yes…..but, not necessarily houses. More medium density in areas with good amenity is what's needed. An example of such and having become the gateway to Sydney's west is Parramatta.  We have nothing like that here in Melbourne. I am an investor and whilst everyone may choose where to live and have a PPOR, I do not believe that building new boxes further and further out will solve Melbourne's problems. Indeed there is an argument that a better investment would be the regionals such as Geelong and Ballarat; both commutable and coming off a far lower base than Melbourne, have better amenity in the infill areas, hence more upside.

We are close to many schools, parks, train stations and shopping complexes and our roads are not as blocked as the over crowded eastern suburbs. estates are required to provide certain ammenties now and they are also required to fund the costs of upgrading roads around the estate. I think they have learn from the mistakes 50 years ago of just wacking up houses and worring about infustruture later. The biggest winner for the growth bondries being extended are no the developers but the current land owners who will sell up to devine and the likes for millions and millions of dollars when they most likely brought the land cheaply. 

Agree entirely………………those sitting on farms with thistles are laughing

 

 

Michael Matusik for those that follow him has some interesting insights on the undersupply myth and fairytales. I guess he won't be used on the speaking circuit for the investment clubs selling and spruiking brand new stock or the large development houses such as Delfin, and cohort.
 
S/E Qld is very over-supplied (sales and rentals) and Melbourne whilst not as bad, does not have the undersupply issues purported by the media and datasphere. Sydney still has legs. Yields are rubbish in most cap cities. Wait 12-18 months IMO we will see firmer yields and rents creep up in most places whilst cap values drift sideways for a while hence giving better yields and returns in the near future.

Good luck everyone with your investing.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

August 24, 2010 - 6:41 am

No boom at all from where I sit.

Devo, agree. I've been posting elsewhere for quite some time, that I smell 1991 in the air. We will have a long flattish
sideways trend for several years. We may track inflation so assume 3 % for the sweet spot there.

Some markets have softened and will continue to do so. SEQ is over-supplied and clearance rates are low and time on market high. The Gold Coast where I was holidaying recently is "on special." ………..with very few buyers. Some vendors still very unrealistic.

 
Each market is different and the usual makets within markets caveat applies. Money supply (and hence cost) will tighten further.
The undersupply myth has been busted by Michael Matusik last month. I guess he won't be asked to be a guest speaker at any investor (sales) clubs/organisations for a while yet.

Market has to find equilibrium and homestatsis further supporting an ostensibly sideways trend.

I did watch 4 Corners last night and yes the US is in strife with more to come. That's what happens when the lending (stimulus) is controlled by the govt. We have somewhat more responsible lending here.

Equiteeee Maaaate was the catchcry from Which Bank some years ago on their ads. Those days have been subdued somewhat here. In the US equity was used (encouraged by GWB mark 2 and now Obamarama) to fund all manner of value losing and depreciating purchases. All one needed to get a NINJA loan was a pulse and ability to sign their name. Then they also have that cutsie exit clause called jingle mail………….the sound one hears when they post back their keys to the banks and walk away from their non-recourse loans.

Now the recent sugar rush fueled by the $timulu$ will leave the diabetic patient wallowing as the US becomes more and more insulin dependant.

Serves them right………….sure; however the wash up is it will affect the supply of credit here. I dont  subscribe to the 40 % bubble popping theory however neither is it gonna be a bed of roses here.

For those new to this gaame, keep your LVR's conservative and manage your ca$h flow are my words of (some) experience. If you can (and you must have the financial discipline to not spend on trinkets and high staus artefacts) get your revals done now and suck out as much as you can into offsets. Don't touch until the bargains appear and the yields become more investor friendly. Yields on current purchase prices in metro cities are rubbish.

Good luck all

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

August 23, 2010 - 9:27 pm

Agree Paul,

I also watched the show.

She certainly is an inspiring role model that her generation could do worse than emulate.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

August 7, 2010 - 12:28 am

Fantastic news for Stockland, Devine, Delfin and other esteemed developers in that cohort .

Bracks backflipped on the Rockbank green wedge……….now it's going to be wall to wall all the way to Melton.

Now why shouldn't the govt release all this land so that the manufacturers of brand new boxes (house and land packages) are able to supply "affordable" housing to the people who can least afford to live in those outlying areas. These (mostly) FHB will be shackled to being a two car family. Fuel and the lack of amenity will implicate not only long commutes for work however for any decent services and schooling, shopping etc.

Delfin Lend Lease has land north of Craigieburn around Kalkallo the size of Shepparton.

Not sure if what I read some time ago (cannot remember the datasphere source) was accurate however the govt was most elated when Delfin suggested they would pay to bring the train infrastructure to that precinct. I envisage it is part of the Area For Inclusion in Urban Growth Boundary, that sits north of Craigieburn.

No amenity and no protection from further subdivision……..they can carve up blocks ad infinitum out there all the way to Seymour should they wish.

Urban sprawl is an understaement. Utter stupidity!

 

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

August 3, 2010 - 8:38 am

Dear Myra,

you have a lot of promise and guarantee in your post………………………………….."I guarantee that you are missing out, cause Luke Gilford teaches you things that I promise you, you have not even thought of yet. Hope this helps. Myra. "

Upon what basis does your guarantee exist?
Will you double our money back if we are unsatisfied?
Will you recompense our losses if we take foolish actions based upon said course material?

You do understand our concern when a first poster joined on this very same day seeks a thread nearly three months old to voice glowing testimonials about someone's educational resources.

Care to elaborate on the achievements you've made since employing the strategies in said course that you provide promise and guarantees about?

Oh, and by the way……………..What a regrettable name for a web domain

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

July 4, 2010 - 9:26 am

Read in the order presented.

Make yourself a cuppa………………actually make that a pot of tea:

https://www.propertyinvesting.com/forums/property-investing/creative-investing/4324169

https://www.propertyinvesting.com/forums/property-investing/creative-investing/4331940

There are other shorter threads if you search under the Creative Investing Sub-Forum, however the first link above should give you a taste of how involved this process is regardless of what the vendors of multi-thousand dollar homestudies will tell you.

Like most things that involve value adding, there is a process…………..Is it simple? YES. Follow the process. Is it easy? NO!!!! Be prepared for some hard work, knockbacks and plenty of No' s!………easy implies lazy and despite what the purveyors of the homestudies will tell you, this stuff ain't easy.

Enjoy the reading Sasha 

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

June 16, 2010 - 4:00 am

I can hear Jenny's voice now from Greenbow Alabama…………….Run, Pascoe, Run!

FAST

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

June 15, 2010 - 7:03 am

wealth4life.com wrote:

Well you can never say never …

In the webinar he pointed to rising job losses … nondisclosure of true debt … the EU and IMF can't fix the problems with money … DOW rising to 11,300 then dropping from end of July forward … Inflation interest rates and deflation … rst mortgages are choking the banks now and the banks don't want to get the truth out so they are leaving people in the homes for free … and more

Lets see, however now is a very important time to get your investments correct and no get rich quick schemes …

D

Thanks for sharing that D, and for the contents of your opening post.

I don't subscribe, however did  view some video footage of his (March/April2010)  take on the Dow and as you mention he is looking at another leg up and if I remember correctly, an approximate halving of the index from there toward the end of the year and into 2011.

I have also read the Great Depression Ahead and the contents IMO are not as bearish as the title (for Aussies). He is an interesting fellow. He is a demographer and combines this with economic/fiscal notions and historical cylical data. Some interesting interpretations for sure.

We will be affected by the whitewash of the US markets (housing and business and Wall Street)  however unlikely to the degree he is prognosticating for the US. Watch out also for more drama from the five little PIIGS…………credit will be tight.

I am smelling in the air a period reminiscant of early 90's. We will track inflation for a while and basically go sideways for a five (or so) year period. There will be markets within markets, however things will be flat I reckon till 2015 or thereabouts.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

June 13, 2010 - 6:10 am

Unfortunately these techniques can also be hazardous weapons of destruction, where occasionally the sizzle sucks in valuers, banks, and even experienced property investors……where else but on the coast where all is not  as Golden as it may suggest…….

here are some articles from the weekend Australian newspaper from a week or two ago that some might find of interest.  Best read in the order I've presented:
 
http://www.theaustralian.com.au/news/nation/options-scheme-duped-banks-and-buyers-in-queensland/story-e6frg6nf-1225872730218
 
http://www.theaustralian.com.au/business/property/anatomy-of-a-property-scam-or-how-to-make-an-easy-3m/story-e6frg9gx-1225872733789
 
http://www.theaustralian.com.au/news/features/mystery-of-mermaid-beach/story-e6frg6z6-1225872727258
 
It seems that smoke and mirrors were not only reserved for Lehman's Brothers and cohort. Imagine registering sales figures and sucking in banks and valuers then securing finance to make money out of thin air. Only cost (to get value registered on land titles office records) is paying stamp duty.

This helped ramp up values along the Mermaid Beach strip of Hedges and Albatross Avenues. I had heard that something along these lines was happening from 2004 and 2005 by identities mentioned in that article.

No wonder Hedges Avenue is on special nowadays. GFC issues and business softening being compounded by a false value base. Fair trading and police are now involved. Those found guilty should be charged with fraud.

They sold sizzle and sucked in quite a few unfortunately. Nothing wrong with using options correctly and in a value add manner, however as always folks caveat emptor whether selling or on the buying (assignees) end.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

June 8, 2010 - 4:15 am

Sage words Matt.

Here's a link to his website:

http://gordonku.com/

He's an ex orthopaedic surgeon. Seems like he's  fin free thru property according to the stuff on his site.

I wonder if he still dons the knife out of choice/passion or whether he deals only in property now.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

May 19, 2010 - 7:34 am

emmyb wrote:

I also don't think I explained it properly. We would put in three seperate offers one by one.

OK Understood.

So if they said no to offer number one and asked for more money we would then come back with offer number two. If they came back and asked for more money again, we would give them offer number three. That's why it goes up 5k each time. I think I have written it a bit confusingly.

Fair enough. Not a bad strategy then.

The only thing that makes me a bit nervous is giving them an unconditional 30 day offer.   Then you should not do what makes you nervous and folow the advice given to you and insert the finance clause. It doesn't sound as if this property is hot, so stack the deck in your favour and hedge your position I have been told in the past to always include a subject to finance clause in the offer even if we have pre approval which we do. But you don't have anything like that when buying at auction and non conditional offers are so much better to negotiate with. They seem to give you more power. We are borrowing 65% from the bank and have more in the bank for renos but do you think it would be risky to give an offer for 30 days settlement and not condition to finance. just wondering on your thoughts here.

Keep safe and stay sane…..SANF (sleep at night factor) is very important

Also, I thought that a 10% deposit was payable when the contract is signed by both parties and the rest was payable upon settlement. Or have I got that bit wrong? Everything is negotiable. I give a token deposit and the balance to 10 % (or less depending on what you negotiate) when it goes unconditional.

Cheers,
Emmy

What state are you buying in?
Is this a PPOR or an investment?
If it is the latter, what is your yield (likely rent) in a renovated and non-renovated state?

Your LVR is conservative, however if you are not certain about finance then insert that clause. Credit/lenders rules are changing weekly these days so cover yourself.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

May 19, 2010 - 6:42 am

Not sure where you are located and where you are buying Emmy, so the following relates to Vic contracts as I am most familiar with those. Cooling off is different in NSW and Qld where one forfeits a small (0.25 % deposit) for the leisure of 5 days cooling. Unsure of other states and territories.

The following is not advice, however merely my opinion. I haven't had cause to provide three alternatives, however have read about giving two options to vendors before in theory (books) however never applied it myself.

Your strategy is not without merit as it shows you are serious and are catering to possibly cover their needs. In so doing however you may be exposing more of yourself to them. The property is obviously overpriced and going to get stale if it hasn't already, so if their prime need is funds to commit elsewhere, I would start with a short settlement (however caveat this with ensuring you are market ready with finance) and for the price of a short settlement, you would expect a deep discount.

You can then offer slightly more for a longer settlement if they refuse your first offer. When trading terms or price, make sure they offer a consession, or the rea will grind you into a corner. If they are desparate, they should play the game.

If you are buying nearby to where you live, then I would sign a contract and attach a small token deposit of say 1,000 dollars to show you're serious. You can then also play clause amendment ping pong by altering price, terms and initialing. If from a distance and fax clause is stated in the contract then a similar scenario would be played.

Again I would seek legal counsel over releasing any deposit funds. If you're keeping to 60 days and under, personally I don't release anything until settlement. Lengthy settlements are different and your offer may be made more attractive by releasing (PART) deposit…..after checking with your lawyer.

Personally I wouldn't play all three options at the same time. Uness this is for a PPOR and there is some emotion attached to your decision, keep it cool. Make sure the numbers stack up.  If it goes to someone else who can offer sweeter terms………next.

Good luck

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

May 18, 2010 - 9:49 am

Hi ya Emmy

I would never give any vendor seven days to accept or reject an offer.

If the vendor is desparate, as you mention, they should be in a position to give an answer pretty much immediately.

I would allow them a fixed date and time. I have often only given them two hours to accept or reject. The agent will play your offer to others if you allow them the luxury. Even if it was passed in and has had price reduction, I would give the vendor till the close of business (say 5 pm) on the day you sign a contract of offer.

In the event you are phoned by the selling agent and congtratulated on being successful, always ask for a copy of the counter-signed contract (pick up in person or have it faxed to you) to ensure you are not gazzumped.

Check with your solicitor and obtain legal advice about releasing deposit early.

Don't know your personal finance situation, so no comment there. The above is not advice but merely my 0.02 worth

Good luck.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

March 21, 2010 - 9:01 pm

I saw that also…..forecasting 5 Mill median by 2020.

I can only presume that they are including multi-acre properties that may be upzoned and carved up into smalller lots for new house and land in the next 5-10 years.

They wouldn't be envisaging such a median price for your standard 3 BR brick veneer on a quarter of an acre or even less. Mickelham is still reasonably located to the amenity of Melbourne and surrounding nearby infrastructure is good.

Maybe a land bank opportunity there.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

March 5, 2010 - 5:33 am

rush80 wrote:

Michael,

Yes mate . All commercial warehouses.
The land tax is crazy. Our accountants were not alert and did not advice correctly, so we ended up acquiring a lot of land in one entity.

Nothing in the lease states the tenant will cop the land tax, but you are right,not a bad idea for future leases.

Thanks

Hi ya Rush

That's what would attract me to sheds in particular or offices…………triple net leases. I own enough resi. Multi's appeal as in blocks of units where I have more control. I do own one retail commercial and whilst it has served me well (it is in a brand name street/strip) and purchased 20 years ago, however in my current frame of mind, that is merely glorified residential. I have to pay land tax there also.

Good luck…….if you can segregate these assets (divest them out into separate trusts/entities) and as you mentioned, next time land tax should be in the lease for the tenant to pay.

Have a good one.

Cheers ~M.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

March 5, 2010 - 4:53 am

Are the comm properties, retail and subject to retail tenancy laws? If they are office/professional or sheds/industrial, ideally your tennants should be paying…..at least on a single holdings basis….check your leases if htis is the asset class you are in.

Obviously will depend upon what structure the lease wording  is at present, however maybe an idea for future negotiations on subsequent letting(s).

For now, I guess it is a matter of the cost of our business to pay this impost that benefits no one except the state revenue offices. It was, in days gone by, a wealth tax levied upon hoarders of subdividable city land to allow metropolitan (or regional) land releases to benefit the growing population base.

Now it fills the state coffers. Wouldn't be so bad if it were not a cumulative punishment. On a single holdings basis it is far more acceptable. It has made me look beyond Vic and have holdings in Qld and Sydney.

Good luck….my rant is over.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

December 15, 2009 - 7:03 am

I'll put my hand up……………..I was investing back then. I fixed my rates on three IP's at 16.5 % and my mates thought I was nuts. I avoided the circa 20-21 % investment loans of the day.

[Michael 888Participant@michael-888Join Date: 2005Post Count: 260]

December 15, 2009 - 6:59 am

devo76 wrote:

I doubt rates will hit 8.5% and if they do they will not be there for long. Look at the blood on the streets last time and our debt levels have not improved. Im thinking around 7%

Hi ya Devo

They will go well above 7 %. Westpac and its Dragon offspring are giving 6.8 % term deposits for 12 months…….a clue me thinks. I'll guess circa 8 % and maybe slightly higher within the next 18 months or so.

Having said that, I don't think it will be the end of the world. I believe opportunity will be in the more leisurely pickings this coming year and maybe 2011. The frenzy of a very low interest rate environment and the FHO boosts and the "don't want to miss out" mentality will settle down.

I have posted a more balanced piece on my thoughts, however can't find the link now.

Found it…..here's the text:

There are markets within markets and sub-markets within them.

I don't see any further correction. Lower end with FHOG scaling back might soften or track sideways and then there is a case to be put forward that investors may pick up the slack.

The higher end took a hammering with the stock market bear market and has since bounced back…….at least it has around bayside Melbourne where I live.

As for the future, property has never ben afforable, particularly  if the prosepctive buyers have over-inflated expectations and must have it all now in exactly the location they wish to be, or they must have brand new McMansion with theatres and outdoor rooms lager than life. Many generations prior, people started out where they could and upgraded. So the instant gratifiers can either keep renting where they would like to live or buy somewhre else to get their foot in the door.

Westill have a 70 % owner occupier rate here in a generic sense. In the UK and other parts of Euope, it is as low as 40-50%…..hence many more tenants. This may occur here also.

Property is not only driven by investors, owner occupiers predominate and as it is a basic human need (and we are told that there is an under supply), I don't see the sky falling in.

I am not suggesting it's blue sky and everything is roses, however fundmentally, we are chugging along fine. If interest rates rise and some over-etended FHO struggle, then there will be some nice IP's to pick up.

I have read the book duckster refers to and the book title (The Great Depression Ahead) is far more bearish than its contents. Harry Dent does clarify that Austrlia is far better poised to emerge relatively scar free from the smoke and mirrors of the sub-pime mess and financial derivative products that were more akin to Ponzi. It is credit here (from that fallout) and ultimate development funds that are harder to source and yet we have a shortage of stock…………augurs well for upside to the suply and demand scenario me thinks

His book is however interesting as far as demographics and cycles specially for share markets (sectors) and also job cycles.

WJH, personally I cannot see a crash here in Australia………..perhaps softening in FHOG driven outer suburb fringes with little or no amenity that might see its purchasers struggle with rate rises whilst settling for a brand new (shiney) box and the obligatory high end Falcodores, and theatre systems whilst notching up plenty of credit card use. 

Not posting here as much these days, however I have been sounding like a broken record when I caveat that one needs to keep portfolio LVR's conservative moving forward. Now is not the time te be an uber-bull and max out LVR's and servicibility…….those days will come however not right now.

And here's the link to the thread it pertained to:

https://www.propertyinvesting.com/forums/property-investing/general-property/4329339