Please make future posts re this thread in the general forum.

Thanks

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

We have done well out of Nambour in Qld as it seems to be a region that is experiencing good growth.

I understand there is a multi-million dollar refurbishment of the shopping centre in town that is helping the local economy mushroom.

And then there’s the Big Pineapple just up the road that’s sure to pack ’em in []

Bye

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

I am just putting the finishing touces on a new product called Wealth Guardian that outlines the different structuring options when it comes to property investing. I expect this will be available by mid-late February.

It is difficult to explain trusts easily, since it is a confusing and complex topic.

Still, I’ll try to give an overview…

There are two main parties to a trust.

Because a trust is not a separate legal entity, a Trustee is the person or entity that is charged with the responsibility of buying and managing the assets of the Trust

The beneficiaries are the people or entities for whose benefit the Trust has been established.

When you buy property in a trust you do so in the name of the Trustee on behalf of the Trust.

The major benefit of a Trust is that it allows for control of an asset without actually owining it.

For example, setting up a Trust where you are the Trustee and beneficiary means you control it (as the Trustee) and also share in the distribution of profits (as a beneficiary).

The disadvantages of a Trust are that it is complex to understand and also expensive to create and administer (in accounting fees!).

If you’d like to know a lot more, then I’d encourage you to think about investing in Wealth Guardian when it is available as it is a 60 page workbook with an audio component too.

Watch this space for more info when it comes to hand.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

You ask:

quote:

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…all i think i am heading in the right direction, what do you think ??

---

I doubt your plan will eventuate in fincial freedom in the medium term, since you lack cashflow… but the real question is:

Are you getting what you want from your property investing?

If the answer is ‘yes’, then you are making progress towards your investing goal which I think is great.

If not… then reconsider what you are doing.

Bye

Steve McKnight

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

I have an article in front of me from The Age 14/09/02 titled “Things are looking up in the Latrobe Valley, thanks to a new coat of paint”

It begins:

quote:

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“The refurbishment of former SEC houses, which previosuly defaced streetscapes in the troubled Latrobe Valley, has sparked a modest property boom.”

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If you are interested in the area then I recommend reading this article… you can buy it from The Age website (click this link).

My thoughts echo the article. Traralgon is going ahead very well, Morwell is flat but has promise… Moe, well, it will be carried forward by the growth in the other two.

Bye

Steve McKnight

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Remember that success comes from doing things differently.
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Tony,

What is wrong with you?

I have written to you advising that your posts breach the acceptable advertising policy of this site.

Now you blatantly disregard what I have have suggested.

So now you leave me no option but to make an example of you. OK – So be it.

I recommend that all forum members take note of this member as an example of people to avoid.

Clearly there is an integrity issue here that does no good for Tony A, nor is questionable national organisation.

Congratulations Tony – you are the first member of the community that is no longer welcome to participate on this website.

Don’t bother making further posts such as this as they will be immediately deleted.

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Yield is a fancy return for return.

In property investing there are two yields that most people watch:

1. Capital Gains Yield:

Annual Capital Gain / (Purchase Price + Closing Costs)

2. Cashflow Yield

Annual Cashflow / (Purchase Price + Closing Costs)

These figures, when combined, give you the ROI (Return on your investment).

Me, I focus on a slightly different yield – called the Cash on Cash (CoC) return.

I look at how much cash I need to put down for how much cashflow return I’ll get back.

Why? Because in the world of financial independence you want cashflow returns to sustitute for the income that you’d otherwise earn in a job.

If you want to stop working, ROI is ‘pie in the sky’ if your investment keeps you in a job.

This is the difference between what you are worth on paper, and what your money buys in reality.

Bye

Steve McKnight

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Remember that success comes from doing things differently.
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Ah, nope, not quite.

Vacancies refers to the length of time that you allow your property to be without a tenant each year.

Initially if it is vacant it is the time you expect it will take to attract a new tenant.

Then, in later years, the time that it will vacant in between one tenant moving out and another tenant moving in.

Personally, I allow 2 weeks each year for vacancies.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Well said Paul.. that is exactly what I was talking about.

[]

Steve McKnight

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

Thanks for your post and welcome to the PropertyInvesting.com community.

In respect to general things to look our for, I’d strongly recommend you read my 10 Laws of property investing success that have been outlined in editions of Insider to date (the monthly newsletter).

Specifically though, you raise a good topic of converstaion about the concept of delayed equity.

These units that you mention you could buy for $460k today and might be worth as much as $700k when they are completed in 2005. Plus, being in Vic. you will also save on stamp duty.

I have no experience in buying this kind of property but I have the following concerns:

1. If you make a mistake, then given the numbers involved, it is likely to be as expensive one. If you want to invest in property I’d encourage you to start with smaller deals and then work your way up.

2. I have friends you purchased a property on St. Kilda road several years ago under the same kind of promise and recently took possession. The property is only just worth what they paid, and if they sold, less than what they paid when you factor in sale costs.

3. I believe that the type of tenant you’ll attract will be a transitory tenant, rather than the more stable family tenant. This adds to the risk in the investment.

4. Interest rates are more likely to go up than down in the medium term, which means that buy the time you settle your likely repayments will be higher than they would be now. Be sure that any financial data you inspect allows for this.

5. About your friend… I don’t want to jump the gun here, but is your friend paid a commission when you buy? ie. is he a sales agent? Hmmmm. Something doesn’t seem quite right about what you have written and smells a bit fishy.

6. Ask for some kind of comparatives with other projects in the area to see if the projections on other deals worked out as planned. There is a huge difference between a budget and reality.

Ok… it’s clear that you need some sort of plan before you do anything []

Work out what it is that you want (and try not to be greedy). Seriously, for $25 a good place to start is the Fast Track tape (available from the resources area). Even if you don’t want +ve cashflow it talks about how to find an area that would be a good place to invest.

I’m concerned by the numbers you are talking about… there seems to be too much risk for someone beginning.

Regards,

Steve McKnight

P.S. Congratulations on the new addition to the family.

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Remember that success comes from doing things differently.
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