Hi,

I read this post with interest as I went to PF intro night and thought that it was quite good (as far as free seminars go that is).

I’d be really interested to know some more information, specifically:

1. why you felt it was poor value for money
2. who the guest speakers were and what they spoke about.
3. how many people were there in the crowd
4. what the topics of discussion were
5. what you feel could have been included to make it better value for money

Any insight would be great.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Leigh,

My first read of David U’s post was similar to yours.

However, having clarified what he meant, I’m happy to go in to bat for him and suggest that he is not hinting that some forum members were lemmings.

I think his post is directed to an observation of where the property market currently is.

What might have been helpful (had David U had the time) would be to go on and explain his strategies or theories for how to avoid or mitigate the risk of a market correction.

To this extent, my own theories (investing system) include:

1. Generally pay off debt as quick as possible.

2. Consider my how I finance my property portfolio. Have a bias to P&I loans, and avoid interest only loans that cannot be easily converted to a P & I basis.

3. Look at the gap (if any) between my mortgage payment and what I could rent the property out for if I had to rent at -20% to the current rent (there should always be a tenant at that price!)

4. Consider a mix of variable and fixed interest loans.

5. Keep a track on what the market value is and have a ‘fire sale’ price in the back of my head in order to have a grasp on the real risk. Ie. a property bought for say $200,000 should be easily resellable on a fire sale basis at say $170,000. That being the case my investment risk is $30,000 (+costs) rather than $200,000!

David and others… do you have other strategies?

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hmmmm….

Sounds to me like that Mezzanine Finance thingie that Mr. Kaye was pushing a while back.

No money down for developers… they borrow 80% from the bank and the other 20% from investors.

100% debt + property development = potential for huge financial disatser.

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

I thought I would help you out by moving your post into this area [] I agree that it can be very confusing, so as a quick summary here’s what I would do:

1. Work out why you want to invest in property… what’s the higher purpose?

2. Depending on your answer to 1, the next choice is to decide about what sort of property profit you want to attract. Your choices are cap. gains or +ve cashflow. Properties that promise both are very rare.

3. If yuo want cap. gains, look for properties that are in limited supply, since demand for those will generally be higher and will thus drive prices up. If you want +ve c’flow then look for yield – either commercial or most likely regional residential dwellings.

4. It doesn’t matter if you have low or no money. There is always the possibility to make a profit if you can get creative enough. You make the rules of your offer, so you are only limited by your imagination.

5. If you believe you can do it, you probably can! As such, spend a little while setting out a plan for how many properties you want to own and then work backwards while you consider your individual actions plans.

Have a great day and thanks for your post.

Bye,

Steve McKnight

**********
Remember that success comes from doing things differently.
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Here here!

I think that Mini Mogul rocks – and even better, I remember the day when the ‘lights went on’!

…and David, even though I don’t personally agree with some of the things you say (not that that has to matter for much []), I greatly value your input into this forum and your honest opinion.

Any community woth being a part of needs different people with different opinions!

Bye,

Steve McKnight

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

Thanks for your post.

quote:

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My concern is how the bank/lending authority will react to the lack of income during this time, how would you suggest we approach this and would it be best if one of us gets a job.

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The way forward might be to look for a low-docs loan where your lack of income won’t necessarily be an issue. In return you will have to leave more of a deposit though, but given your situation that shouldn’t be a problem.

quote:

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Also the money earnt from the sale of our businesses, how can we minimise the tax?

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There may be some CGT roll over relief available, but the best person to explain that would be your accountant.

quote:

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Do we sent up a new company under our trust purely for the rentals and reno’s?

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This statement seems to indicate a lack of understanding of how structuring works. The real issue is will you need to set up a new structure for your renos.

Well – what I would probably try to do (to minimise tax if possible) is to live in the property while you renovate it. That way (unless you are in the business of renovating) the gain will be tax free.

Talk about this strategy with you accountant.

Have a wonderful day.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
**********

Hi,

I’d imagine that it would be some kind of arrangement where the tenant pays a higher rent, but in return also gains an agreed percentage of any capital gains.

This might then be an incentive to add value to the property that will increase enjoyment for the tenant and also capital value.

I’ve not come across an example of this in real life… yet.

Bye,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

I agree that the volume of traffic is picking up which is making the need to be more specific with our topics more urgent.

I’ll look at this when the forums are re-released later this month.

Thanks for your feedback.

Bye,

Steve McKnight

**********
Remember that success comes from doing things differently.
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