Hi,

BuyerBeware will help you with analysing the deal, however it won’t be able to make the investing decision for you.

A good place to start is trying to work out what you want from your investment property from both a cap gains and cashflow perspective.

I recommend that you identify what % returns you desire, as doing this will help you to determine the liklihood of a prospective property achieving that goal (based on past history and the current market situation).

Should you use BuyerBeware then play around with the figures template at varying interest rates to see what the impact of rates rising +1 to +2% above what you can currently borrow at. I say this as it seems to me we are at the beginning of a new interest rate cycle and it is wise to be pro-active rather than reactive.

Have a great day!

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Noel,

Thanks for your post and I hope you enjoy the books that I have written.

From time to time I get over to Canada – when I do I always catch up with Don Campbell of http://www.albertarein.com

I have spoken to his real estate group in the past, and I hope to do so when next I manage to cross the pond.

As for the investing techniques – I know they work (including wraps) in Canada as there are other people who have used them profitably.

Still, I think that JackHu’s comments are very apt and accurate.

Be sure to visit regularly as we love contributors from afar.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Sorry for the delay in replying… I’ve been on holidays.

I don’t know about Amazon, but the books are for sale either in bookstores here in Aus or else from this website for those who can’t get a bookstore.

Both have been selling well – book #1 continues to be in strong demand whereas book #2 was recently #1 on the Dymocks business bestseller.

Have a great day!

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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The People Who Hate People Party? LOL. You crack me up!

You wanna moderate that forum Mr. Gatsby?

*Sigh*

Hi Jenny1,

From the sounds of it you are talking about flipping the property – meaning that you will onsell the property prior to taking formal ownership of it.

In that case, you will still need to pay stamp duty, but your solicitor will organise a similtaneous settlement meaning your purchase and sale will happen on the one day.

You will therefore receive a cheque on settlement, being the profit less stamp duty, fees, charges and costs (as applicable).

Just do the sums to make sure you know what you will walk away with.

As far as tax goes, there would probably not be a CGT discount as you will have owned the property for less than 12 months.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Thanks for your post and welcome to the forum.

I guess the question you have to ask yourself is… ‘How much capital gain am I expecting this property to earn (both % and $).’

It would only make sense to buy if the expected inflation adjusted capital growth was more than any accumulated negative cashflow.

Perhaps post back listing what you feel are the unique benefits of this investment, and what the median capital growth for the region has been for the past few years.

As far as the numbers:

Rent: $9,360

Loan: $9,352 (80% LVR, 7% IO Loan)
Management: $750 (8ish%)
Body corp: $1,200
Rates: $1,400
Repairs: $500 (say)
Insurance $400 (say)
Misc: $500 (say)

Negative cashflow: $4,742, which is 2.8% of your purchase price. If you add in bank interest on your money at 5% per annum, then your expected capital gains needs to be at least around the 15% per annum mark for this to seem attractive.

Hope this has been helpful.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Nikki,

Yep, that’s the way to go.

But add a practical element to your theory too by looking for real deals where you can test your theory without necessarily having to purchase.

Part of gaining confidence is the ability to find deals that fit your solution mindset.

It’s a shameless plug, but try to get to a masterclass if you can to find out what professional investors are doing right now to profit in the marketplace.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Ivan and thanks for your post. Welcome to the forums! [biggrin]

Well…

Is the issue the bank won’t lend because an insurer won’t pick up the loan, or is it because of your credit circumstance and a high LVR on this deal?

If I read your post correctly then it is the first issue before you. I know that some banks self-insure (e.g. the CBA used to). It would make sense to go with that type of lender. I would certainly be finding out which branches of what banks are in the town where you are buying and I would approach them directly to find out what their lending criteria are. Be sure to ask what there lending limit is before needing head office approval and try to stick below it!

If it is because of your own circumstance then perhaps try to pay down some debt so that you don’t appear like such a risky proposition even if you do offer to pay a 50% depsoit on this deal.

I hope this has helped. To try and get other opinions I have moved the thread to the finance area where there are contributors with more knowledge re: finance than me.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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