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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Hi,

It is still possible to buy positive cashflow deals, but it is getting harder and harder.

Martine is right, generally speaking, today you need to create the cashflow stream by solving problems.

In essence, this problem solving mindset is the key theme in the masterclass events that I facilitate. During the day we look at how you can create positive cashflow by solving certain types of problems.

For example, John and Rondah, who were featured in the MAP (book 2), have a niche were they:

1. Buy a property (which is certain key features),
2. Sub-divide the back for a profit
3. Use profits to pay down the loan on the front
4. And thus end up with a positive cashflow outcome and equity to boot.

Really, I can’t over estimate the importance of getting that sort of training as opportunities continue to exist is vesry market but you have to know what you are looking for. The days of good deals falling from the sky are well and truly gone.

Hope this has helped.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

My experience is that there are two ways to go:

1. Offer Aus property as security AS WELL as NZ property which will allow you to get finance here for property there.

2. Get finance in NZ for NZ property, but, being an Oz citizen, the LVR may be as low as 60% or 70%.

If you’re seeking finance then it would be worth putting in an inquiry at http://www.propertyinvesting.com/finance as we have an affiliation with a NZ broker who is highly regarded.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Further to the policy of this site, Rob was right not to name the product.

It also seems that the discussion has gone off track and as such I have locked this post.

As this is a property forum, it would be wise to stick to discussing property.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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