MM,
“I think you’ll find that most of the richest people in the world hold their assets in real estate.”
— As I have said from the beginning of this so-called debate [which I will admit I now find quite amusing – not in a derogatory sense] buy and hold is a strategy that can be implemented on occasion – it is not necessarily the best option. The point of contention being, how long does an investor retain the property before it leads to opportunity cost – in fiscal terms. You have suggested never selling. Based on my experience, most of the richest people out there do not abide by your strategy.
“there are certain investments available to him [RK] that are not available to the ‘average investor’ – or newbie, and in the US they have the SEC to monitor these kind of bigger bucks deals”
— Correct. The investor must qualify, which is based on income over a defined period, and have a minimum net worth.
“so let me rephrase that so it’s quite clear what i was asking, this time without any attempts at rehetoric (which seemed to go over your head)”
— As I pointed out, I am not a yank. I picked up on your “rehetoric”.
“I’d like to know about the ‘several strategies’ which you consider define ‘sell’ apart from cash out, liquidate.”
— I am not going to outline the strategies we use aside from a relatively simple set of rules which are the foundation for building wealth in real estate. 1. control 2. OPM 3. sell/maximize profit
“Stop splitting hairs! ‘Not significant’ means ‘a small part of the equation’ in normal english.”
— In my position “normal english” can be very costly.
“Furthermore buy and holding for the long term (7 years plus) means you tend to ride out those humps”
— This approach is as speculative as those used by a “trader” or “speculator”.
“I don’t want to trade a full time life for a full time job as a property trader/developer/deal doer.”
— Everyone has a different definition of a “full time life”.
“The argument against holding means you sell, pay CGT, buy in at the same point in the market, do your thing (renovate/develop) and then sell, repeat formula.”
— If this was the way it worked, I would be out of business.
“Your gain just got diluted with CGT and RE agent’s fees.”
— Incorrect re: diluted by taxes, and we do not use RE Agents.
“You must agree that if people’s aims are to grow their portfolios from 3 to 20 or from 0- 135. then holding is involved.”
— Yes, I agree. The question being, is this the most profitable strategy – use of capital, equity, institutional funds, time and opportunity.
“For some people, ‘retirement’ means continuing to do what they love, but not having to for income.”
— Retirement can be a time at any stage in life when others continue what you have built. In effect, you are not restricted to living off income, because you continue to build wealth.
“so the detective in me wonders if you are selling shares sort of like DDR does in his property investing company, (or in some other SEC high-powered way)”
— Having reviewed one of DDR’s so-called investment proposals my response to any investor would be “caveat emptor”. As far as I am aware, Dolph has never conducted an SEC level transaction.
“you think you are giving much better deals/returns to your clients than DDR is”
— Let’s just say we abide by securities regulations and deliver higher yields than DDR offers.
“but he’s much more famous”
— “Fame” is for those who are here today, gone tomorrow.
“the books and seminars have leveraged him into this ‘trust me, folks’ position, and that irks you cause you don’t think he’s doing that good a job for his investors.”
— Yes, he is a very good salesman. Otherwise, I am aware of people at a high level who were very disappointed with the way their investment was managed. I personally have no issue with Dolph, and simply advise every investor to conduct sufficient due diligence before investing capital in any transaction.
“Is your company available for the average person to invest in, or do you have to be a certain level of investor to qualify?”
— No. You must qualify under SEC regulations.
“Can you tell us the name of the company, and does it have a web site?”
— I started monitoring this forum to gauge where/when/how/why people are investing in Australasia, and their objective views on market conditions – reasearch you might say. At times I provide comments which I hope benefit people. This is the extent of my interest in this forum, therefore I prefer anonymity.
Best of luck in your endeavors.
— Michael
Hi Min and Michael
Phew
][][]Merry Xmas all
Hi Mini & Michael,
I love this debate! As to who’s more accurate or more successful under each strategy I think is relatively irrelevant – both will work if you are good at it. With the diff in opinion, could it be that:
1) In Aust, capital gains is imposed on each sale of investment property, while in US CGT is deferred if you roll over sale of one property into purchase of another? Hence US investors don’t have to think twice about selling.
I’m not a fencesitter nor have I made a fortune, but I don’t mind saying I have decided that “buy & hold” is the way for me. My time horizon is my whole lifetime & perhaps my future childrens’, and I will only sell if something becomes non-core and hopeless in future. As Mini said, it’s better to use equity refinancing than sell here in Australia – the price to pay is some in-built conservatism by banks on your leveraging powers.
One last word on this – if it works for Warren Buffett with shares (well he actually buys into great businesses at the right price and never sell), then it’s good enough for me.
As for the topic of why people invest overseas, personally I am keeping an eye on o’seas because it offers diversification and opportunities brought about by different cycles in property elsewhere, and also currency play. The Aussie dollar can buy more bricks & mortar right now in the right places.
Mini, I’ll have to get some NZ property lessons from you one day
Regards
Scarecrow7, I think you will find that Warren Buffet does sell, though by his own admission he does not (usually) buy specifically with selling in mind.
As far as this debate goes I found that Michael introduced some sound and thought provoking concepts, for which I am always grateful. Minimogul obviously holds on to some strongly entrenched views (which is his right), but to resort to name calling (Yank) was offensive in the extreme.
If others are discouraged from posting their views because of this it would be a loss.
Personally I have toyed with different strategies, and find myself constantly refining and adjusting my position. I applaud those that encourage me to explore things in a new light.
JulianHi Julian
Welcome to the forum.
You will find that Min is a lady and I think that Michael is an expat NZer.
Regards
I am waiting for Mini to reply.
waiting
Refreshing
waiting
etc
Kind regards
ChanDollars
[Keep going, you’re nearly reach the end of financial freedom]I’ll just go and have a look under a Wraps thread or maybe a Trust Structure thread for the info I’m chasing shall I Mini???
There was never a complaint. I simply politely asked for a refocus on the original topic because that’s what I had requested in the first place. I know you would like to think your advice has given me so much to go on, but it hasn’t.
Thanks for your condescending tone. The view must be great from up there!
To be complaining about people going off the track on ‘your’ thread is the glass half empty way of looking at it – the glass half full way is, ‘gee, I’m glad there has been some action on my thread which attracts other people to read it, and maybe I’ll get some more info from others’.
[/quote]
There isn’t really any reason to argue guys.
Buy and hold is a good strategy which suits some people. There is a lot to be said in favour of it as there is likely to be less stress involved.
There is however no doubt that those who have the skills and the time and are prepared to accept the stress involved in undertaking larger projects can indeed obtain superior returns by buying, improving the property and thence selling
it and subsequently repeating the process over and over again.No-one stated that YOU are no good Mini.
A statement relating to your particular favourite strategy isn’t a personal attack on you so cool it.Michael appears to be of the opinion that his strategy is superior and it doesn’t take a lot of thinking to agree with that conclusion.
Jane
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