Forum Replies Created
Hi David,
I have heard that there are extremely good depreciation advantages buying property in say NZ or Australia from Japan and as an expat. If you would like to get the details of this I can pass you onto a person living in Tokyo who knows about this strategy, which he is currently teaching others. He is also an expat.
email me at [email protected]
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of Humour.Hi Reen,
Gee you're brave! Buying a property to develop on and not knowing whether the council will allow it. What's plan B?
Suggest you have a look at whats on offer for new property developers at http://www.rookiedeveloper.com or you can access them at http://theblockblog.com.Plenty of great information there.
Ring your council, ask for town planning and ask what is the smallest land area you can subdivide to build on. They will have this information on their website, but quicker to ring and ask.
Regarding costs, developing requires a bit of cash or at least access to it. You need a spreadsheet to calculate your figures and you need to get educated really fast or you will have a property that is too small to fit 2 units on, or you will be building the units at a potential loss, because you haven't crunched the numbers to see if there's a profit in it.
Be careful.
Ian
http://theblockblog.com
Free Property Info, Tools & Resources For Investors with a Sense of Humour.Hi U36,
Yes there is some truth in this. You always have to take into consideration the fact that the bank/financier will take the most conservative valuation of the newly renovated property.
However, there can be a considerable difference in value if you add the right things to the property for the target market. One example is converting a 1 bedroom unit to a two bedroom. Much more value than new paint. A valuer will tick the boxes of the property features for assessing value, rather than the finish of the features, so an extra bedroom gets more brownie points than a new kitchen, a garage is more valuable than beautiful landscaping and so on.
Your property buyer is right in saying banks are cautious but not necessarily for the reason he states and it sounds like he hasn't done any renovations himself. In a slow market they are very cautious, but in saying that if you look along the lines I've mentioned above, you'll probably find the increase in value acceptable to banks via their valuer and you will achieve your goal.
Learn more about renovating and what your options are.
Ian
http://theblockblog.com
The Block That Makes Money Renovating
Hello Jules76
Are you out there????
Seems your post has been attacked by para legal terrorists.
Out of all this, I hope you got what you needed.Contact SRO and tell them to blow it out their ass!
Tell them to prove it or stop harassing you.
Get everything in writing and carry on with your life.Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors with a Sense of Humour.Hi Ryallsy,
It's a common dilemma investors face. The more they look, the more they find. In that is created the burden of choice which is what you are facing. Better than no choice at all, but a problem.
You might get come clarity in this post on my blog.
http://www.theblockblog.com/propertyinvestment/4-reasons-why-you-should-kiss/In summary, you will need to look at your investing goal in detail, then work back from there. Everyone has a different starting point as well, so look at what you want to achieve in what timeframe. Then reassess the options in front of you in that light. Some strategies will light up while others may fade.
You may see a small range of options that suit and diversify your investing which is often best. Different strategies and different locations, so you are not exposed fully to the downturn in any one market, should it happen.
Don't feel pressured into any one strategy because of a timeframe ie; the building grant. You need each option to stand alone financially without special deals. They should only sweeten the process if available.
As a newbie, keep things as simple as possible and as clear in direction as you can. This will negate that inner turmoil you are feeling right now.
As much as people can give you their experience and direction they have followed, which is always valuable information, it is you who makes the final decision, so evaluate each option in front of you as thoroughly as possible. Use spreadsheets to evaluate your returns. Look at each case scenario and compare, then decide which strategy or strategies suit your goals best.
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors with a Sense of Humour.Hi FT,
There are a number of things to be aware of before you jump into mining areas, the least of which is to be one step ahead of the economy, which is a very hard task in itself. An interesting article is here from Mr Yardney
http://www.propertyobserver.com.au/residential/warning-to-investors-stay-away-from-the-coal-face/2011082451270Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with A Sense of Humour.Hi Beefz
Good advice from Jamie above, also by renovating you are adding value straight away so a revalue of the property once you decide to move on from the PPoR situation can release more funds, if required, for your next purchase. The original loan would also go up to the new value, so take that into account with regard to your returns and liability, but if extra funds are needed, they can be acquired this way.
Definitely get friends in for the year to help with the mortgage payments. Really takes the stress out of owning a house. Be sure though that whoever you get in realizes that you will be renovating. Living in the house you are renovating can be quite stressful, especially if it's not planned properly and worse, underfunded.
You're definitely on the right track and congratulations for getting into property investing AND getting on this forum. Keep asking questions about what you don't know. There are many people here that can help and your education in prop. investing never stops.
Love your work.Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors With A Sense Of HumourHi Rick
You really need to speak with an accountant in the area / state you are investing in. I don't think many Aust accountants will be able to help you with the specifics. I spent 30 mins with an acc. in the town I was looking at investing in, in Michigan, a couple of years ago and learned more in that short time than you will find in a year trail blazing these forums.
Every state is different. Company set ups, paperwork, taxes and deductions can differ as well.
Also I think that if you are looking at buying in the US it's a lot easier to forget the LLC thing and get good insurance. Much less hassle and expense with similar protection and the same tax deductions from what I understand.
If you are looking at buying a stack of properties then it would be wise to look at company options, but one, two or three properties, I wouldn't bother. I'm finding it takes a couple of hundred to set up an LLC but a hell of a lot more to keep them running, in time and money, providing the IRS and all the other govt/state depts with the right forms – (every quarter in some states.) A right pain in the a.
Sorry Ive gone off your topic a bit, but a 20 minute skype phone call to a local CPA will save you a bundle as well.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of Humour.Basically you get what you pay for. If you spent time setting up an excel spreadsheet with all the correct configurations, you would have spent more time vs $ value then it would have cost for a good mortgage tracking software system.
Two systems I have used and do use are Mortgage Watchdog, which is an Australian based system and Home Loan Interest Manager which I think is US based but works great for the Aust market.
If you would like to see the details of these you can view them here : Mortgage Watchdog and Home Loan Interest Manager or you can go to The Block Blog where I've got both listed ( because I use them)
I think for the money you spend on just one of these, it will save you much more than your investment in the refunds from your lender for the mistakes they make. I've been refunded $1200 on one loan and am owed $267 on another. Some users of this software have been refunded much more.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of Humour.Yes – Dean and Elise Parker have a few copies.
I've been using their renovation software for 6 years now. It's worth the money.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of Humour.For that money you might be best to look at an "add value" property. The ugly duckling that you can restore, renovate, subdivide, build another dwelling, add rooms etc to increase your equity stake and rental return as fast as possible.
Your borrowing capacity will tell you the suburbs you can concentrate on. I don't know Sydney as well as I know other areas, but I would guess that $350-$450k limits you to the outer suburbs to a degree.
Then look at the type of property available for that price in more well to do suburbs. The ones a notch above and maybe next door to the first suburb list. Get as specific as you can with the type of property and area, then approach all the agents to go out and find one for you. Let them do the leg work, thats their job. It's free.
You need to be ready to pull the trigger when they find one that meets your criteria, so have all your finances in order before contacting them and make sure they understand that you are ready to buy today.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of Humour.If you are in Melbourne or Victoria then these guys most likely can give you costings.
Simon Mensforth
Director
Home Delivery Pty Ltd
Delivering your Home, Tailored to your Needs
P.O. Box 1339
t: 0403 530 609
Camberwell Vic 3124
f: (03) 9404 3040
e: [email protected]
w: http://www.home-delivery.net.auHope they can help.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense Of HumourYou may want to look at established businesses in Detroit that have been buying and selling property during this downturn and know everything there is to know about the city with regard to property returns.
An investing strategy in Detroit i have been involved with is Rent To Buy as we call it. There I think it's called land contracts. You purchase the property for x amount – say $30k. A retail buyer ( on a waiting list) then pays you $50k for it using a deposit of x amount – say $10k, reducing your exposure to $25k. They then take over all outgoings, (maybe except insurance – you might want to ensure you have a property safe while the deed is in your name). They also agree to pay you rent or vendor finance payments, whatever you want to call it of x amount. Let's say $800per mth for the next 24, 36, 48 months, whatever you negotiate. At the end of the term they either own the house or pay you a balloon payment after renegotiating with a bank or lending institution.
For $100k you could control 4 properties with no outgoings, no management problems, no vacancies. The local Detroit company handles all the contracts, finds the buyer and collects the monthly income. If they, the retail buyer defaults, then the vendor finance option reverts to a rental contract and they can be evicted in 45 days ( or less). You then sell the option again and get another $10k deposit reducing your initial $25k exposure down to $15k
It's actually better for you as an investor if the retail buyer defaults.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of HumourConveyancer may not have, but buyer may have breached your contract of sale. Speak to your lawyer and check the details of your contract.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of HumourWhen renovating and revaluing your property its a good idea to talk to a valuer about what additions would add the most value as well as the real estate agent who will tell you what the market is looking for. Remember the market is very different if you are going to rent out the property as opposed to selling, but because you want to revalue from the bank, then it becomes a toss up between the 2. How much do I spend doing the place up to rent only and will the bank revalue this place in my favour enough as if I were selling it?
Also you can only borrow against 80% of the new value AND you still have to be able to service the extra loan amount.
Orange wouldn’t have a high capital gain % so you have to buy really cheap and add as much value as possible.
The 2nd stage is when you do run out of borrowing power – called ‘the glass ceiling”. This happens when you are moving faster then the values of your properties are rising and you cannot access any equity to keep going or your wage doesn’t allow you to borrow more or both.
Now organise money partners and joint venture deals to keep going. It means you split the profits or you pay a bigger interest bill on the money you borrow, but it means you can keep going without waiting for capital gain and equity to kick in.
In other words you are controlling the market rather than the market controlling you.
Ian
http://www.theblockblog.com
Free Property Investment Info. Tools & Resources for Investors with a Sense of Humour.Hi Fred
I've used the reno (add value), revalue and rent strategy and it works well. Choose your areas well and go for it. Start small and get one project under your belt. If you do your numbers correctly and keep within time frame and budget you will achieve the outcome you already know. On the up side, if you take the conservative side with your numbers, the outcome will be better which has been the case many times for me.
Sometimes you can spend too much time getting all this information about everything and confuse yourself. Not sure about 'Cashflow Capital' but there is always something to be learned at these seminars.
I wrote a post in my blog the other day about people like yourself, just starting out and it's based on personal experience. It might help clarify a couple of things for you.
Personally, I would choose one strategy, obtain the spreadsheets I need to do the numbers. Concentrate on one area to select your purchase, work out what due diligence you require for that area and go for it. Talk to people who have made that strategy you select a winner for them. FInd out exactly how they did it and copy them for your circumstance. Don't reinvent the wheel, just do what they do.
Hope that helps.
Ian
http://www.theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of HumourHi Ben
Welcome aboard.
You could google Mark Unwin Accountant – Kew Vic. Steve McKnight uses him I hear for good reason ( and so do I)
Just wrote a little post in my property blog on investor beginnings that may help. Also Darren's Property Investing Tips site is a good one. Other than that keep researching and define the area you want to invest in. Look closely at that outcome you want to achieve then break down how to get there.A small add value project is an excellent way to start, but even though it may be small, it requires the same level of planning as a big one. Maybe moreso 'cause it's your first.
All the best with your investing
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with a Sense of Humour.Hi.
My name is Ian. My partner and I have been investing since 2003 and have bought and sold a few res. properties. Own 7 currently, 4 in Aus, 3 in the US and just sold our NZ prop last year. We currently live as expats in New York and I use my spare time adding to my property investment blog which I hope has helped a few people on this site.To all new guys and girls joining, don't forget to add access to your contact email. I see a lot of people saying contact me and when you go to their profile it's not allowed as they haven't set it up. Just a thought.
All the best with your investing
Ian
http://theblockblog.com
Free Property Investment Info, Tools and Resources for Investors with a Sense of Humour.Agree with HighIncomeProperty with regard to company set up. It's also important you have a well set out operating agreement especially if your LLC has multiple members.
In answer to transferring property, not sure you would need to do this unless you purchased in the wrong entity or the county wrote the deed in the wrong name, which they do by the way.
You can transfer property between companies, but you will have to pay the transfer tax for each and other smaller fees. This is worked out differently in each state and sometimes counties, so make sure you have the right information beforehand. It's also based on the tax assessment at the time, not what you may have bought the property for.
Ian
http://www.theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with A Sense Of HumourHi Jessica,
A lot of Aussies invested in Buffalo between 2004 – 2007. Anyone who wasn't out by then got burned with the downturn. Like any northern post industrial city it has its fair share of problems, but the main ones for landlords are extra costs and maintenance in heating, extra taxes being in New York state and being sure you have bought on the right side of the tracks. There are quite a few crummy areas in Buffalo and you don't want to be buying in those.
I think there are better places to invest in the US right now personally. Are you looking at other areas as well?
There is plenty of reading and advice available in the Overseas Deals section here in this forum.
My advise at this early stage would be to keep researching and try to get as much information from those on the forum who are already investing in the US.
Ian
http://www.theblockblog.com
Free Property Investment Info, Tools & Resources for Investors with A Sense Of Humour
