Forum Replies Created
Hello and welcome to the community!
And thanks for your praise and encouragement.
I think I would argue I have already had an indirect input into helping you via the books I’ve written, and this website.
You clearly have the energy to succeed, and I’m sure you have a hunger for knowledge. The only thing missing is perhaps the confidence to act. You’ll need to find that from within, or else go without.
For my part, at age 48 and having taught real estate for the better part of two decades, I have moved on to lending my time to other projects – my legacy ‘Tree Change’ project where I am planting 300,000 trees, and another book, which will be more on general money concepts (make, manage, multiply). Yes, I will continue to assist with real estate, as it is the heart of my ‘multiply’ approach, but I no longer offer 1-on-1 mentoring.
I would commend you to my PPP group though, if you would like to ‘get closer’ to me. Did you catch the webinar I did last week?
Yeah, none that I know of either. You would have to be careful offering such a service with AFSL licensing and requirements about offers to the public, which is why I suspect none exist. There would also be possible legal liability for the promoter if something went bad.
Hello Alan. Welcome to the community.
You raise good questions, and I’ll do my best to try and help point out the issues.
But first, which option seems best to you? And why? Do you prefer profit potential (Option A), or convenience (Option B)?
At the start of my investing career, I would have gone with Option A all day long. Being an accountant, I would have been wooed by the return, and having more time than money, would not have minded the additional travel burden.
Now though, being somewhat older, and hopefully wiser, and with more money than time, I would gravitate to Option B – happy to earn less, but more easily.
But there may be even another option… properties even closer to home, which are income earners, but with more growth upside.
After many years, I have discovered that the cashflow gains made by purchasing in higher-income lower-growth areas tend to be less than the capital growth by purchasing in areas which have higher-growth, lower-income.
So, applying the above, my approach is to invest in residential for growth, and commercial for income.
And the McKnight mantra about which property to target? The one that will make you the most money, in the quickest time, for the least risk and lowest aggravation.
All the best,
Providing a loan sounds easy enough, but if an investor lends to someone for non-investment reasons (including PPOR) then they need to be VERY careful, as you may need a credit provider’s license. See more here: https://asic.gov.au/for-finance-professionals/credit-licensees/do-you-need-a-credit-licence/
Dale, I wish you every success. Perhaps seek some financial counselling if you are in a pinch. There may be other options (such as mortgage relief) that they can help you arrange.
Thanks for your post, and welcome to the forum. Thanks too for your encouraging words; I’m glad you liked the books.
It’s interesting to read through your logic. I agree you are in a good position, but to be honest I don’t like the idea of buying a 1Br anything. That is usually the bottom of the market – cheap to buy, cheap rent, cheap sales price.
What you seem to be doing is picking the investment first, and the profit second. I’d prefer to see you:
1. Work out the profit you want to earn (how much down, how much back, how much time, how much risk). I call this the ‘outputs’.
2. Work out the amount of money, time, risk and skill you have to contribute (I call this your ‘inputs’).
3. Find the property where the output is congruent (i.e. aligns) with the inputs.
Did you manage to join in the webinar I did last Saturday?
You have some savvy people who have responded already.
All I would add is to make sure your loan product fits within the flexibility and features you need. Lenders sometimes sell you a loan ‘burger with the lot’ (which is top of the line expensive), when all you are really after (and need) is a cheeseburger. For instance, fixed loans sound good, but you lose flexibility to payout early.
Oh, and the last thing I would say is this: don’t get too distracted by the interest rate. Be happy to pay more for the loan that is right for you.
Some investors I know swear by NDIS, but in my opinion, any investment that is only ‘made good’ by tax incentives needs to be examined suspiciously. One of my rules is: don’t let the tax tail wag the investing dog.
Specifically in respect to NDIS, I wonder what impact the requirements may have on your ability to exit – to whom, and how much.
You can find out more about NDIS investing here:
- This reply was modified 3 years, 2 months ago by Steve McKnight.
It sounds like you might be better off with the services of a buyer’s advocate to find you something, but I must say I am not very enthusiastic with the strategy behind your investment. It looks like you are trying to buy, rather than make, your profit.
If that is the case, you are relying on the area more or less alone to drive your profits, and given you are then relying on someone to find you a deal, and presumably managing the deal once acquired, you are not so much investing as you are buying.
Investing is where the money is really made. Buying something is only the beginning, and in the current market, buying rather than investing is pretty high risk, in my opinion.
You’ve prompted me to consider running a ‘Investing for Beginners’ webinar to run through all the basics, and to pinpoint some of the common mistakes that are made when buying and investing.
If you, or others think that would be helpful, reply to this post and I’ll put in the effort. I’ll need 100+ replies for it to be free :-)
Worth a try Tony, and I wish you all the best. Sadly, I think I can hear the sound of silence from here though.
I wrote to my local member, Josh F – the Treasurer – about my concerns with the NCMCC, and his reply – more than a month later – was stock standard “refer to the legislation”. Slightly more than useless.
I think your better option is to lobby someone like the Property Council of Australia to take up the cause. They have professional lobbists and links into government. A petition is usually a ‘notice me’ alert, but doesn’t carry much weight as they tend to be fractous in nature rather than united.
It seems to be that governments have made property owners the sacrificial lambs to preserve tenants (voter base) and big business (donation base).
Hmmmm. This is something I would definitely pay some money to a good town planner to discuss, as you may not need a building permit, but I would expect you will at least need a planning permit.
Get in touch with the friendly folks at: http://www.townplanning.com.au
Alistair Perry should be able to point you in the right direction.
Yeah, this is one of the many, many, many complexities that the, IMHO, poorly thought out NCMCC has constructed.
Have you read what I wrote at the link below? There is also a very handy flow diagram I constructed at the same link.
It seems to me the following principles would apply re: the option:
1. Leasing principle (LP) 2: The tenants needs to comply with the terms and conditions of the lease
2. LP12: Tenants given the opportunity of a rental extension equal to the waiver/deferral period
3. LP13: The rent has to be frozen.
Together with the above, you will need to consult with the state legislation as it may be more or less onerous than the NCMCC.
Now to praticalities…
Your current lease will have language about the timing and protocol of how/when the option has to be exercised. This will almost certainly be at the tenant’s instigation, so aside from alerting them, I wouldn’t do much else other than watch and wait. Perhaps their business is not viable, or they will seek to renegotiate the option, my point is, the ball is in their court more so yours.
Note: if they don’t extend, then the principles of the NCMCC still apply, so you might be ‘stuck’ with that – but remember they are points to negotiation, not law. The law is made at the state level, which is why you need to consult more closely with the legislation in your jurisdiction.
Some legal advice might be well worth the investment.
P.S. You might also consider the merits of a letter say that you note the tenant has not yet exercised their option per the lease, and that if they don’t, your position is that the lease terminates on 15 July. That may prompt them into action.
This sounds horrible, and I’m sure you are feeling quite anxious and stressed. Hang in there… I’m confident a solution can be found.
First of all, building disputes are incredibly common. In fact, I think if there was ever a building contract that didn’t have some wobbles, I would be amazed. Just look at the State government and their construction contracts for roads and tunnels. So-called water tight contracts leak live sieves.
Now to your situation. Yes, there are some lessons to learn about due diligence before engaging a builder, and the dangers of having supplies sourced from overseas (and China in particular – quality, environmental, warranty, etc.), and about having paperwork reviewed by a legal eagle. But all that is in hindsight now.
Did you actually sign a building contract (you seem to indicate there is something)? You seem to have at least a quote, but was that translated into something more formal? If so, while that is likely to be loaded in the builder’s favour (you can actually negotiate the standard wording), it does at least set out your rights and responsibilities that you can seek legal advice on in respect to performance and enforcement. It sounds like you want to either ask for performance (i.e. build the house), or else terminate the contract and get your money back.
The problem with getting your money back is that the builder probably doesn’t have it anymore, hence why they are trying to shake you down for more. The pandemic has caused a cash squeeze, and builders are notorious for poorly managing their cashflow (using future projects to pay for completion of current projects). If the pipeline of future work dries up, then they can’t pay to finish existing work and pay out accounts (sub contractors, supplies, etc.), hence they can’t use those trades and suppliers until they’re paid.
That said, the request for an extra $25k just sounds like a mafia style shakedown to me and causes me to question the entire integrity of the builder. If it were me, I wouldn’t want to deal with them anymore.
So, what to do? The short answer is that you leverage to force the builder to do the ‘right thing’, and that is going to require some legal heat.
Here’s what I recommend:
1. Don’t pay a single cent more until this is sorted out!
2. Confirm what paperwork you have (emails, contracts, txt messages, plans, etc.) and get it in order.
3. Head off to see a lawyer who specialises or has experience in building disputes.
By the way, don’t threaten the builder with legal action, nor tell them you are seeking legal advice. Keep that up your sleeve.
Please keep us in the loop about how it all goes.
Yeah, if I’m reading the post right, and you are asking how you can prove you lived in a house as a home when you didn’t, then I’m totally uncomfortable making a declaration that you know to be false. That’s straight tax-avoidance. Also gaining a financial advantage by deception. Just pay the tax and give thanks you live in a country like Australia where your contribution goes to making us what we are.
Not sure how much lower interest rates can go. And if investors can’t make money where they are now, then there probably isn’t much hope that they’ll do better at 100bp lower.
Okay, I’m not a conspiracy theorist, but I have to admit to some serious reservations about downloading an untested app, without sufficient privacy laws in place now, and with a government that is making policy up on the run who is bribing us to download the app with promises of ‘we will let you all out of lockdown sooner if you have it.’
This government isn’t high in trust stakes after the bushfire response. Trust needs to be earned, not given.
I think we’ve created a ‘success problem’, namely that while we might have low cases, the rest of the world more or less doesn’t.
Can we live in isolation? Yes. Can our economy and pre-COVID-19 standard of living survive isolation? No.
The question I keep coming back to is this… what happens when we open the borders?
It seems to me that the lockdown was a very expensive way of getting the necessary stockpiles of PPE and ventilators to manage post-lockdown.
Hmmmm. Even with the ‘brakes’ eased, the increasing loan book risk is likely to cause lenders to lower LVRs and increase credit qualifying criteria.
Beyond that, is getting into more debt really the answer? Short term fix for long term pain.