Hi Matt,

By rates, do you mean council rates?

If so, then this extract is taken from a local shire council

quote:

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Cardinia Shire Council rates are based on the Capital Improved Value of each property.
A rate in the dollar is declared by comparing the total valuation to revenue required. Rates are then apportioned against each property on the basis of individual valuation.
The formula for calculating general rates (excluding any additional charges and arrears) is the valuation multiplied by the rate in the dollar.
For example if the Capital Improved Value of a property is $250,000 and the council rate in the dollar is set at 0.0042 cents, the rate bill would be $1050 ($250,000 x 0.0042).
Councils determine the rate in the dollar as part of their budget process.
How your rates are calculated will be set out on your rate notice.

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Re: commercial lends… every lender has a different policy. For example, I’ve found the CBA policy to be the most restictive and Suncorp Metway to be about the most liberal.

You need to check it past several lenders and shop around for the best deal.

Cheers,

Steve McKnight

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Hi,

The REIA has this information in percentage form for most areas, but you will have to pay for it.

See:

http://www.reia.com.au/market_reports/Market%20Facts.htm

Bye

Steve McKnight

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Hi,

You ask:

quote:

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What if you find a prospective buyer using the wrap system and they default on their repayments, where does that leave you?

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If they default and owe you more than the property is worth, then you’d take back possession and re-sell it.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

To find out more about the tape, including how to make your order, just go to:

https://www.propertyinvesting.com/resources/6

Cheers,

Steve McKnight

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

Happy New Year for Wednesday!

I’m very pleased you enjoyed the tape… for $15 it’s a no-brainer, right?

Anyway, I thought that since you wrote such a nice comment I’d write some detailed feedback for you (even though it’s late!) []

You ask:

quote:

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Do you all see merit in purchasing a property, doing the basics of rehabbing it, forcing capital growth and then drawing on the equity to fund the 20% down deposits for wraps?

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The short answer is yes, I do see merit… lots of merit. However I can also see one minor ‘fly in the ointment’.

And that’s lenders in my experience usually want to wait about 6 months before doing a revaluation and then you’ll probably only get 80% of the increase at best. Then there’ll be some application fees and other costs too.

quote:

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Or, is it wiser to use the smallish money put aside to fund the wraps etc fisrt off and eat up most of the money after say 3-4 wraps?

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As you’d expect I also like option 2 as well []

So what I’d be asking is: How can I do both? Why not do one of each? That way you can test the market with real life experience and then make up your own mind.

quote:

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I tend to think more along the lines of the first. I guess what inspired me was an article in the latest Aust Property Investor Mag about student accomodation etc.

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Hmmm… how were you inspired? What did it say?

Well mate, my final comment is that whatever you do… do something! Don’t sit on the fence! Make it your New Year’s Resolution to have your first deal stiched up by 31 Jan 03.

I can see that you have already started looking for properties in line with what I said on the Fast Track tape. Excellent. Action creates momentum.

quote:

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Anyway, any feedback, positive insights etc would be most appreciated.

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Matthew, you have done the research and have taken some tentative action. If it’s meant to be then it’s up to you. I believe you can do it. Do you?

Warm regards,

Steve McKnight

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Hi Jason,

Great to hear from you. How are things going?

You raise a good point and something that is already ‘in the pipeline’, so to speak.

Hopefully I will have some good news in the later half of 2003.

Have a wonderful day.

Regards

Steve McKnight

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Hi,

A solicitor would normally draw them up on your behalf.

I’d imagine that it is just a standard Word document on their system that is tailored for your particulars… but nevertheless, it would be smart in the first instance to have a solicitor advise you as it will need to comply with the relevant Consumer Credit Code and other financing parameters.

Regards,

Steve McKnight

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Many people may read this post… but I wonder how many truly understand the importance of the subject matter.

Who is doing who the favour?

The landlord for providing the house? Or the tenant for paying the rent?

Your answer will reveal how far your property investing will go.

Regards,

Yoda [^]

a.k.a Steve McKnight

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Hi,

When rate shopping , a good link to check out re: interest rates is:

http://www.infochoice.com.au/banking/rates.asp?CategoryID=90

This and other useful links can be found in the Web Links area.

Regards,

Steve McKnight

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Hi,

I think that it is important to read widely on the topic of real estate.

In respect to OS forums, there are often hints of strategies being used that may (or may not!) be applicable to the Aussie market.

For example, it was at a direct marketing conference in Vancouver that one of the fellow participants pulled me aside to discuss property investing. He was using a basic form of wrap strategy (although he didn’t call it that).

I came back to Australia and discussed the strategy with my lawyer… he said it was just vendor finance and the only difference was that we were writing 25 year terms rather than the normal 3-5 years.

And thus was born our wrap empire.

It wasn’t until I attended a seminar run by John Burley that I discivered what I was already doing successfully was called a wrap in the United States (short for Wrap around mortgage)… I just thought it was vendor finance.

So, the strategy works around the world but has a different name.

If you are confused with the terminology, just post the words / phrases that you don’t know and we’ll build a glossary as part of the site.

Regards,

Steve McKnight

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