Rob,

Vic & NSW: immediate
Tas. & Qld: After 12 months
SA: Wraps illegal
WA:?????

Regards,

Steve McKnight

Hi,

Of the 40 or so wraps that we did 3 three years ago, 50% have now terminated as either moving out (and we have resold, re-wraped) or they have cashed us out.

This large atrition rate is primarily due to our poor classification and qualifying techniques over potential clients – something that took time to fix but which is working better today!

Funnily enough, the remaining 50% seems to have been our best clients.

Investing is a learning process… and there is no doubt that I’m still learnig today. I don’t pretent to know everything and I’ve now doubts that in ten years from now I’ll look back and shake my head and the mistakes I’ve / I’ll make.

Oh well, sometimes the best lessons have to be experienced first hand.

Cheers,

Steve McKnight

Hi Dianne,

Firstly, I think that the information provided by the replies you have received all contain good advice.

To be honest, it is difficult for me to comment on your deal beyond very basic indicators. But sometimes these are best because they tend to cut through all the hype and emotion associated with the ‘sell’.

If you haven’t already done so, I suggest you get and read my free newsletters and work through my laws of success.

The first thing I do on any potential deal is the 11 Second Solution. In your case, $2,433 pcm works out at $561 per week. Hmmm, this seems very high.

In any event, $561/2 = $280.50. Then *1,000 gives $280,500 – this is still much less than $365k.

I also get nervous buying an expensive property because:

a. If the property is vacant then the negative cashflow may be extensive. I realise there is a guarantee… just be careful about the clauses that write this up as legalise.

b. You could buy one property for $365 k, or 7 * $50,000 properties. More properties reduces both your interest rate risk and also your vacancies as you spread your exposure over 7 properties rather than one. Ie. all 7 properties would have to be vacant to have the same exposure as one $365k property being vacant.

c. I’d compute how far interest rates have to move before your ‘budgeted’ +ve cashflow is eaten up. 5.65% sounds a little optimistic given the change in interest rate landscape. If you buy on a 60 day settlement, then the rate may be closer to 6.5%. Watch out!

As for other questions – make sure you do your ‘due diligence’. If you have purchased ‘Property Secrets Revealed’, then use then PATTERN Templates included therein and also the negotiating strategies to try and get the price down a bit further.

Bottom line… this isn’t a deal that I’d do as a buy & hold. Too expensive and the risk is isolated across one deal. Even capital gains are now uncertain given the change in interest rate climate.

But my opinion is clouded because my niche is smaller regional properties – not CBD stuff.

Do your numbers very carefully and be sure to factor in ‘buying’ and ‘selling’ costs to get a realistic idea of how much you will make for how much you are risking.

Bye,

Steve McKnight

Hi,

One of the many things outlined in my Wrap Library is the treatment of Land Tax (in Vic.)

Basically, if you know what you are doing you can avoid having to pay it at all. The solution has nothing to do with asset structuring – just about knowing the SRO system and how to use it to your advantage.

Regards,

Steve McKnight

Felicity,

I like JM’s simple yet effective ad. Given your target market I recommend you place it in the ‘TO LET’ section. Put a border around it so it stands out a little.

For more specific advice I recommend you consult the ‘Classified Ad Secrets CD’ I produced a while ago and which is part of the wrap library (which I think you have purchased, right?)

If not it sells for $65 – call Brent on 1800 660 630 for more info.

Cheers,

Steve McKnight

Hi,

I think the biggest distinction with the strategies is that you can qualify for the FHOG with a wrap but not a lease-option.

I regard both strategies as very useful tools that have slightly different application depending on the exit strategy of the investor and the needs of the client.

For example, for clients that do not qualify for the FHOG – a possible win-win outcome may be to lease-option a property to them. Provided they can save the deposit and they show a reliable payment history – you might like to wrap them the property when the option arises (if they can’t get finance elsewhere).

Regards,

Steve McKnight

Hi,

This may not be the advice you are after at this point, but I feel compelled to say that I wouldn’t[/b[ be investing in property (or anything else) until you first addressed the issue of why you are broke in the first place.

No amount of money will be able to solve a money problem if you alwys spend 101%+ of what you earn.

Investing has much to do with discipline, which is the theme of my web site at http://www.wealthtipsonline.com.au note the Inner Circle is no longer available to new members.

Regards,

Steve McKnight

Peter,

In your case it may be best to team up with someone looking to make a quick dollar and say to them that if they source a deal and you buy it then you’ll offer $$$$$.

This is known as ‘bird-dogging’.

Feel free to make this kind of offer here on the forum – provided you spell out the exact nature of your offer and your specifications for the property you are looking for.

AD is right though… your only other option is to pound the streets, Internet etc. looking for deals as they don’t drop from the sky and land in your lap.

Regards,

Steve McKnight

Hi,

A lot of research for the data that you require certainly can be completed over the Internet.

If you are in Vic. / NSW, then I encourage you to read the articles posted on 19 Apr. 2002 as these contain a lot of great info. These reports come out 1/4ly.

Most of the information that you require is available through the ABS too. You’ll need to pay for it online… but it is free at your local library.

Finally, local councils often have business development / enticement programs that outline a lot of the demographic and infrastructure in the region. This may or may not be avaialble online, but a call to the council would be worth it to find out what is available.

Regards,

Steve McKnight