Forums / Treasure Chest (Past Forums) / The Treasure Chest / Migration patterns of a lemming… Sound familiar?

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  • Profile photo of DavidUDavidU
    Member
    @davidu
    Join Date: 2001
    Post Count: 101

    “The migrators swim lakes and rivers, cross mountains, and eat all vegetation in their path. Eventually, some reach the sea; attempting to swim it as if it were a river, they are drowned.

    The drowning of lemmings was once thought to be a mass suicide by crazed, overcrowded lemmings.

    More likely it is just bad judgment on their part. Lemmings are small and have no way of estimating the size of the ocean.”

    Food for thought…

    Cheers

    David U

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,749

    Hi David,

    And your point is…

    Do you think that people are blindly investing to real estate with little forethought?

    Yes – I generally agree, but this is no different to the way that a lot of people have invested (in property, shares etc.) for a long time.

    The issue about investing in regional areas seems to have been overplayed in my opinion.

    While I totally agree that people buying off the ‘net without so much of a minute of research set themselves up for financial probelms, investing under a sensible and proven system means that you don’t have to physically inspect every property you buy.

    The Lemming story was interesting (who were the Lemmings?), a phrase that is more commonly used is: “a fool and his/her money are soon parted.”

    For people interested, Proverbs 10 onwards in the Bible (the wisdom of Solomon) contains a lot of good passages to consider. Here are three to get you going:

    quote:


    Pro 10:4 “The one who is lazy becomes poor,
    but the one who works diligently becomes wealthy”


    (this next one is for those doing wraps in an unethical manner)

    quote:


    Pro 10:9 “The one who conducts himself in integrity will live securely, but the one who behaves perversely will be found out.”


    (and lastly, one for all to live by:)

    quote:


    Pro 10:7 “The memory of the righteous is a blessing, but the reputation of the wicked will rot.”


    Cheers,

    Steve McKnight

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

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

    Profile photo of SooshieSooshie
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    @sooshie
    Join Date: 2002
    Post Count: 974

    Hi there,

    ‘Lemmings’ are animals, whilst we on the other hand are humans, which means we can make decisions and we have the capacity to learn and also to change things as we see fit. We are the decision makers, if people want to act as lemmings well who’s to blame?

    2 cents worth
    Cheers
    Sooshie [:)]

    “Giving is a Blessing, receiving is the bonus”

    Profile photo of DavidUDavidU
    Member
    @davidu
    Join Date: 2001
    Post Count: 101

    Hi

    Let me put the quote into context.

    It was made by a U.S journalist 3 months PRIOR to the crash of the internet (Dot Com) sector.

    To paraphrase, he was basically saying was that one could normally predict the bust of a bubble because normally record and unprecedented levels of activity precede the impending crash.

    I think in this case the journo mentioned record number of new entries to the sharemarket for that particular month.

    In reading this, there was definitely a ring of familiarity, ie the record levels of investment borrowing last month in Australia; ie 50% of all housing finance going to investors?

    This wasn’t particularly a commentary/quote on any particular form of property investing or investor.

    I just thought it was an interesting insight based on where we are in this particular investment cycle.

    Cheers

    David U

    Profile photo of The DIY Dog WashThe DIY Dog Wash
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    @the-diy-dog-wash
    Join Date: 2003
    Post Count: 696

    Folks

    I just have to say I am so tired of reading posts on this valuable forum that are implying whether tongue in cheek or not that the people on this forum are ‘lemmings’ for want of any other phrase.

    I beleive the people on this forum, whilst inexperienced in some cases, are doing their very best to try to aviod the pitfalls of investing therefore putting them ahead of those that choose to beleive they already know it all and unwisely invest in things they know nothing about, eg: some of our share choices to date.

    If you think you are superior than the rest of us, well good for you but keep it to yourself. It is not “just healthy open discussion” I for one am demotivated by these posts and have been forced away from the site on many occassions as I have had enough.

    Let’s stick to what we do best, supporting and encouraging each other whatever our experience or investing strategies.

    5 cents worth.

    Cheers
    Leigh K[:D]

    Read, learn, grow but most of all just do it.

    Profile photo of ADAD
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    @ad
    Join Date: 2002
    Post Count: 636

    Keep on going Leigh and don’t let anyone make you take your eye off the ball. The choice is yours and you add heaps to this site so thanks.

    Enjoy
    AD [:0)]
    (Andrew)

    “Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”

    Profile photo of JoffJoff
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    @joff
    Join Date: 2003
    Post Count: 50

    I agree Leigh, lets not all go funny all of a sudden.Seems to me, reading posts on this forum for the last couple of weeks,that there is an inorndinate amount of introspection going on.Yep,no doubt we are moving into the next phase of an ever changing market. But why should that alarm anybody?.The signs of change have been there for nearly 2 yrears now, so any body that has invested money any where have no excuse for being caught out.The amount of knowledge available in forums such as this and main stream media these days, means the only excuse for failure if you choose to dip your feet in the property market is your own lack of intelligence.
    Yes, times are a little uncertain,but the future is no more unpredictable than its ever been.
    bugger off.
    Joff

    Profile photo of westanwestan
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    @westan
    Join Date: 2002
    Post Count: 1,950

    Hi all
    Leigh i think negative posts are very valuable and thats one of the great things about this site freedom of expression. it’s always valuable to way up the pro’s and cons and make informed decisions. David that quote is worth considering.

    OK lets put the cards on the table. those who have been investing in the property market for over 5 years are you actively buying, sitting back or selling? i will be honest as i always am, i am selling down, sold 4 properties selling another 6, holding another 15. i would still buy i just can’t find properties that meet my criteria. great buying opportunities will present again but this market is too hot.
    westan

    Profile photo of bensonbenson
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    @benson
    Join Date: 2003
    Post Count: 101

    Westan,

    I have simply bought and held IP’s over the past 8 or 9 years. For this strategy at least I’m not sure if this is the best time to buy. Ive spent the last 12 months lowering my debt level during this period of low interest rates. I still look at a lot of deals but the rental returns on the sort of property I like, inner city or coastal (perth) are too low for me to justify purchasing at the moment.

    My opinions only, I dont wish to dissuade anyone from following their own plan.

    Profile photo of ToeEdgeToeEdge
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    @toeedge
    Join Date: 2003
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    quote:


    In reading this, there was definitely a ring of familiarity, ie the record levels of investment borrowing last month in Australia; ie 50% of all housing finance going to investors?


    Is this figure due to an increase in investor borrowing or a decrease in PPOR borrowing? It may just mean the equation is changing. I am always suspicious of how the media put their skew on things.[}:)]

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,749

    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

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

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

    Profile photo of The DIY Dog WashThe DIY Dog Wash
    Member
    @the-diy-dog-wash
    Join Date: 2003
    Post Count: 696

    I just have to add;

    Westan

    I disagree withyour comments, there is a difference between negativity and a difference of opinion. The difference of opinion is the valuable part. The negativity is a waste.

    Steve

    I can apprecite the post in that context, however this is not the only post that has soured the forum in the past weeks. I am simple suggesting that we stick to the spirit of the forum.

    Cheers
    Leigh K[:D]

    Read, learn, grow but most of all just do it.

    Profile photo of scottscott
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    @scott
    Join Date: 2003
    Post Count: 110

    After reading other property forums and seeing unbeieveable things happening out in the field (eg: being in a car with an agent on the way to view a property, having someone ring up from in front of their computer, and after a 2-3 min conversation, put in an offer at asking price and asked for a contract. All this without even knowing the agent from a bar of soap!I was dumbfounded!!!), I do believe there are a lot of people out there acting like lemmings toward property investment.

    On a more positive note I would not suggest that many if any of the people here are amonst those investors. I go out buying pos properties (which are getting extremely hard to find because of the lemming mentality), in regional areas, not only knowing that they will cover themselves in bad times, but betting on good cap gains because I’ve bought well. I don’t feel that I’m a lemming!

    I’m sure that anyone who’s out there trying to buy properties has missed out on 1 or more because they are not willing to just purchase on the spur of the moment, and seen and heard of extrordinarily silly things happening out there, that somewhat justify David’s post! Leigh, I must admit that I’ve come back for my last trip with a little negativity toward a section of the property investing comunity as well. I just hope for the sakes of the people within this forum that they aren’t amongst them, because poorly researced decisions, based soley on a greater than 7% return, don’t create a good investing strategy. Especilly in these times.

    Stay focused guys and don’t let the current hot market stop you. It just means you have to be smarter!!![;)]

    Cheers
    Scott S

    P.S. Leigh, on a lighter note I’ve found the perfect spell checker!!! My girl friend sits behind me at the compter and nit picks my spelling AND grammar! (its easy to tell when she’s not here!)[:I]

    “Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
    -anon

    Profile photo of westanwestan
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    @westan
    Join Date: 2002
    Post Count: 1,950

    scott

    i too hear stories of unbeleivable investor practice. an agent in horsham told me on wednesday how he had an investor make an offer on a property then asked where horsham was. i know some agents who won’t even accept offers on properties unseen anymore because of some very amutueristic behaviour by some investors. i have been amazed at the prices i have got on properties recently sold. on a property worth 80k agents are saying lets put 10k above where they and i think the market is at and selling within 2 days.
    a great selling market.
    westan

    Profile photo of SooshieSooshie
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    @sooshie
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    Post Count: 974

    Hi there,

    I was upset to learn that Leigh was troubled with the way some of the posts were going. [:(]
    I must admit, when I came home from my holiday, I was surprised by the posts made whilst I was away. To me, the posts (which of course are 2-D) where interesting in that the theme was more about ‘should we be investing in property’ rather than ‘how to mitigate the risks associated with property investing’. I sense (keeping in mind that it’s hard to read emotion into a 2-D post) nervousness, that some in this forum are jumpy or on edge. Or as my mum would call it “itchy feet syndrome”.
    I’m curious as to the spirit of the posts, but I question them rather than deem them negative or positive.
    My post on ‘responsible investing’ was to reiterate that it doesn’t matter what type of investing you do, as Leigh said

    quote:


    I beleive the people on this forum, whilst inexperienced in some cases, are doing their very best to try to aviod the pitfalls of investing therefore putting them ahead of those that choose to beleive they already know it all and unwisely invest in things they know nothing about, eg: some of our share choices to date.


    The most important thing is how to protect your money/time investment and how you go about doing it.
    David U, I understand your posts, but could you please explain how the reference to a Lemming, is perhaps tied in with your investing? What you are trying to avoid, perhaps.

    Cheers (big hug to Leigh)
    Sooshie [:)]

    “Giving is a Blessing, receiving is the bonus”

    Profile photo of ksheatherksheather
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    @ksheather
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    A fool and his money are soon partying, food for thought :)

    Profile photo of aussierogueaussierogue
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    @aussierogue
    Join Date: 2003
    Post Count: 983

    guilty as charged.

    i just think that amongst all the great success stories, they need to be temepered with some stories, ideas of what could go wrong. im sure some posters, myself included, are playing the devils advocate to a certain extent. this will make people feel uncomforatble.

    personally i thank some of the posters especially ‘westan’ who rather than being negative shows great thought in his posts and shows the courage to paint a less than rosy picture.

    maybe one of the categories in the new format can pertain to ‘market direction’ so those who dont want to read about the market dont have to

    cheers

    Profile photo of davo70davo70
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    @davo70
    Join Date: 2003
    Post Count: 56

    Leigh I am fairly new to any sort of investment forums and I agree that if people are posting negative statements just to upset or incite people then yes that upsets me. However, most of what i have read on this forum is predominantly positive just poorly worded in some cases.

    I was very enthusiastic when I bought my first investment property but have realsied that I may need to make some changes in my strategy to avoid making costly mistakes.

    Oh and to everyone I believe that a book by an author whose name escapes me (female Australian investor) may be a little to blame for the not looking at properties before purchasing mentality. She actually advocates this in her book saying she has done it for many of her properties.

    When I look at the net for properties in my price range I notice that many are in areas I have never even heard of. So I look them up and do some research on the towns and suburbs and still would like to see them before buying. Lord knows what mess they really may be in and what nasty repairs costs lie waiting.

    So do your homework don’t rush to buy that property there are always more coming onto the market if you miss that one.

    davo70

    Profile photo of MiniMogulMiniMogul
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    davo,

    was it margaret lomas or jan somers?

    >Oh and to everyone I believe that a book by an author whose >name escapes me (female Australian investor) may be a little >to blame for the not looking at properties before purchasing >mentality. She actually advocates this in her book saying she >has done it for many of her properties.
    i’ve done it for all of my properties hehe!!

    >When I look at the net for properties in my price range I notice >that many are in areas I have never even heard of. So I look
    >them up and do some research on the towns and suburbs >and still would like to see them before buying.

    If I needed to do that, then i would still not have purchased.!!!!
    however I did a bit of research. All I really care about is what is the rental demand like? I like properties with an existing tenant (with documents to prove what they are paying.) That’s the only way you REALLY know what someone will pay. Even if the tenant moves out at some point you know what you should be able to get rent-wise. As well as that i like David U’s trick of asking a rental agent who’s *not* the one selling you the property to assess it.

    >Lord knows what mess they really may be in and what nasty >repairs costs lie waiting.
    that’s why I always get a full building inspection before I buy.
    it’ll tell you all of that and more, right down to how many years the hot water cylinder may last.!

    >So do your homework don’t rush to buy that property there >are always more coming onto the market if you miss that one.

    yep! i find not seeing the properties (apart from pictures) makes it easier to not get emotionally involved and walk away if need be. In the days when i *was* looking at 30 properties in person, I ended up picking the ‘wrong property’ – simply because when the vendor says ‘new roof, new wiring, new piles’ I don’t have the skills (and don’t mind that i probably never will) to tell that all the work is either rotten, incomplete, or non-existant. the builder’s report told me that and I was able to pull out of buying a lemon. After that I became a little jaded about my ability to inspect in person, or even my reasons for wanting to. Did i have to ‘like’ the house, anyway? What does ‘like’ mean to an investor, anyway?

    cheers-
    Mini

    http://www.vocalbureau.com

    Profile photo of brownwombatbrownwombat
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    Hi
    Mini – I could no more do that, go sight unseen – than jump over the moon. You are very trusting. I work very hard for my $’s and I don’t want anyone taking my $’s unless I know what it’s for. I have spent the last couple of weeks on the Gold Coast and it’s a mad house here. Very good experience tho. Many people r buying straight off inet (or so agents say). I only have 2 IPs so I am new. Maybe after a few u become more hohum, or is it the challenge/gamble ?
    Cheers

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