[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 10, 2010 - 4:59 am

That sounds quite good then in terms of what you are able to purchase the property for – The only problem will be finance, but I will address that below. WIth regards to the valuation:

Who is the valuer? Can the vendor provide you with a copy of the report? If you work out who the valuer is, you can then ask your bank if the same valuer is on their panel and give the valuation to them. This will help them with their valuation with you revalue the property after purchase (assuming you still proceed, and are successful). You may even be able to engage the same valuer to complete an updated report in say 12 months time (they will still have all the research on file) for a reduced price.

Also remember that the bank will probably want to wait 12 months before revaluaing, but if you push them hard enough they will probably do 6

With regards to finance you might need to see how high you can go based on the purchase price of $400k in terms of what LVR you can get. By my estimate you are probably $60k away from total up front costs required assuming an 80% mortgage, so see how far you can close this gap.

– Higher LVR?
– Existing equity?
– Borrow elsewhere?
– Joint Venture with YoungInvestor from propertyinvesting.com?

All of the above suggestions are based on the fact that you have already done all your due diligence and that you think it is a worthwhile purchase of course

Good luck!

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March 10, 2010 - 4:19 am

hence I was a little worried about the "current" bank valuation.

I fear it may be the agent or the vendor advising the bank's "most recent" valuation which may not be recent at all…

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March 10, 2010 - 3:21 am

rtsapstead,

Has the bank valuation been done by YOUR bank in the last couple of weeks, or is it one conducted by the existing vendor's bank? As a general rule, the bank will not value a property for you that you dont own (unless you can present a signed contract of sale), so I will assume it is the existing vendor's bank that has valued the property.

It so, it would be advisable to find out when the valuation was conducted, and even obtain a copy (depending on the bank, some will use their own internal valuers and therefore will not provide a copy of the valuation).

Just wanting to make sure you have all the numbers correct here – If you can obtain a recent valuation, or even have a new one completed by a registered and well known valuer that says the property is worth $500k, then go for it at $400k!

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 10, 2010 - 2:56 am

Hi Chiz,

I am not an accountant or tax advisor, so I will certainly allow for any revision of my comments by more qualified people, but here goes:

If the shares have now been delisted/closed from the market, then you may claim the capital loss in this tax year.

The problem for you will be that, as you pointed out, it can only be claimed against a capital gain, not against PAYG income.

I believe you may carry forward the capital loss indefinitely so when you have a capital gain to offset it against (even if 10 years from now), you may then do so.

Hope this helps.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 10, 2010 - 2:47 am

I actually saw an article on Lateline (or Lateline Business, cant remember!?) regarding that issue. Apparently a couple of law firms are gathering together companies who have been affected by the sudden change and are now going to litigate!

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 10, 2010 - 1:51 am

I remember you mentioning something about a failed business attempt – Just wondered whether the superannuation investment stuff was as an advisor/broker (ie: self employed), or working for a business…. but that was before i googled cbpd

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 10, 2010 - 12:45 am

I have spoken to four principals of different real estate agencies in the last couple of weeks, and all have commented that the current Melbourne market conditions "can not be sustained".

This is the obvious comment one would have thought, with the real question being WHEN will it slow down?

Steve Mc's last e-mail newsletter stated something along the lines of "I agree that we are in a property bubble….but it is more likely to deflate than burst".

Once again, the question is one of time frame – so how far off are we from a change in the market?

The only sign of any slowdown I can start to feel at the moment is that perhaps whilst rentals are still fairly strong, the actual market rates for rent don't appear to be rising any further in the last few months. There is no longer a bidding war for rentals – rather it appears the bidding war has turned to auctions!

When 9 out of 10 metro properties on realestate.com.au and domain are listed as auctions, you know that agents have recognised an opportunity to take advantage of emotion and market sentiment – I wonder how long this will continue?

It appears we have had rising rents, rising prices and now rising interest rates… Perhaps rents will be the first to crack here – or perhaps not – but one thing is for sure… they can't all keep going up at the same time!

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 10, 2010 - 12:30 am

Very handsome property BC, and nice work with the kitchen deal!

Do you work from home by the way?

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 9, 2010 - 11:32 pm

If you can afford the additional leverage then why not go for growth?

If you fund a shortfall of lets say $5k per year for 10 years, but then are able to sell one or two properties after that time and have 6 unencumbered properties left over, wasn't it worth the cash flow shortfall?

Now I understand that if you are 65 or 70 years old then this may not be the best strategy, and funding $5k shortfall per annum might not be within everyone's capacity, but it is the best strategy for some people.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 7, 2010 - 8:49 am

I would need to read the contract to determine whether you are entitled to receive the deposit back, however you can always threaten to take your experience to another level, which might entice them to give it back willingly.

You'd be surprised how quickly they are willing to assist when you mentioned taking them to small claims or going on Today Tonight.

NB: This can be a bit messy, so I would try all amicable ways to get the deposit back first.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 7, 2010 - 8:45 am

They are an interest free product for anyone with a full balance direct debit option (assuming you don't go over the limit!)

All mine does it pay utility bills etc so I can leave the cash sitting in my offset account for an extra 30 days or so – And apparently I receive reward points for using the bank's money to save myself interest?

Used correctly and to their full potential, the credit card is a wonderful thing, and can be very beneficial to anyone with any kind of debt.

Anyhow… way off topic – Sorry

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 7, 2010 - 4:06 am

Who is the Mortgage Detective? He sounds smart

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 6, 2010 - 2:21 pm

Hi Banker,

I wasn't having a go at the X Coll discussion, just making a comment.

I often get finance arranged for clients within a couple of days, so I agree with your point on relationship management.

Once in a blue moon I actually attend a settlement myself depending on the client and the urgency!

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 6, 2010 - 11:57 am

If I'm not mistaken, someone already took care of that on your behalf in another forum

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 6, 2010 - 10:08 am

Hi J.W,

Whilst I am a property investor myself, I generally sit on the other side of the finance desk with one of the banks.

For this reason, I will let some of the Mortgage Brokers who deal with all the banks lend their expertise on this one

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 6, 2010 - 9:12 am

I'm already number 3 – Wesley ranks slightly ahead of me in the household rankings (our dog!)

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 6, 2010 - 9:08 am

I just had another thought – Perhaps purchasing some of the units through different lenders might get you a higher LVR?

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 6, 2010 - 8:58 am

RIch,

If you now make one as well, then I forecast the property market to crash at least 20% by the end of the year…

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 6, 2010 - 2:25 am

Well, in all honesty I don't mind whether we do a rehearsal or not – It's the honeymoon I'm looking forward to!

6 weeks off from the banking world may just prove too tempting by the way… Anyone got any bright ideas for an alternative career path where I can get back up to 6 figures with a couple of years? (And yes, I will accept property investor as a suggestion )

D – With the similar investment interests and goals that you and your lesser half have, it was always going to be a match made in heaven!

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 6, 2010 - 2:15 am

Hi Sonya,

Try searching in a few towns in North West Vic.

If you don't have much luck then please PM me.