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  • Profile photo of yackyack
    Member
    @yack
    Join Date: 2003
    Post Count: 1,206

    Time to Consolidate?

    Now is the time to consolidate. Forget about finding and buying positive cashflow properties now. They are only going to give you a few extra dollars a month (and that’s without the hassles and costs of repairs). And then in a few years time the value of most property will fall a little or remain the same price. Forget about buying any property now.

    If you got properties just do what you can to consolidate. Pay a little more off or maybe do a little renovation. If you don’t have any properties – sorry you missed the boat. Wait for it to come back. Save a deposit in the knowledge that prices will possibly fall a little or remain constant. Don’t buy now just to find that in a few years you cannot afford this investment, its costing you money to hold an asset that is not appreciating and you got repairs and hassles with tenants. I can tell you it aint no fun paying interest, paying for repairs and addressing tenant issues when prices are not rising.

    If you do buy now and you do experience problems in the future or loose patience with the market and then decide to sell – dont worry – I will be there to snap it up. I am consolidating and aint buying anything for the next 3-5 yrs.

    What do ya all reckon?

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

    Hi Yack

    i agree with you ! but there are always the exception deal.

    as far as the comments don’t buy now. I’ve been saying that for the past 2 years. But 2 years ago on this forum i was telling people to buying NZ. Now i’m saying be careful what you buy in NZ but buy in The USA.

    As a gereral comment about the OZ market i agree, but for those willing to adventure a bit outside the Box then the world has some fantastic opportunities.

    regards westan

    We find cash positive deals showing 15-25% Returns in the USA email me at [email protected] to join our database

    Profile photo of yackyack
    Member
    @yack
    Join Date: 2003
    Post Count: 1,206

    Hi Westan

    In my view buying in the US is too risky for me and they too are in a smimilar position in the property cycle.

    The returns may be good in some areas but they come at a price – risk.

    If returns were that good then why dont more people in the US invest in property rather than shares and their 401k.

    My uncle in law – who lives in Canada has always said to me NOW is the time to be selling not buying.

    Anyway – good luck with your spotting business. Hopefully your investors will not regret their investments over time.

    Profile photo of flashflash
    Member
    @flash
    Join Date: 2003
    Post Count: 140

    Was just looking at one of these US deals and from the cashflow ,I will have my money back in 5 years,still have the asset and still have a cashflow which I can move into other markets.
    Over time these deals get better and better.

    Profile photo of Don NicolussiDon Nicolussi
    Participant
    @don
    Join Date: 2005
    Post Count: 1,086

    Hi yack,

    Will you post to let us all know when it is time to buy, maybe you can ring the bell for us. No only joking.

    I agree with you that it is good to pause and consolidate your portfolio. Fix all the problems whether they be people or the properties.

    However, once that is done I can’t see myself sitting on the sidelines for years waiting for the days of 20 and 30% cap growth.

    I would rather spend the time getting into some good deals now. I am not talking about buying off the rack and paying asking price for any property in any location. I had not brought anything in Australia since late 2002 and that property double in value in a year (crazy).

    The thing is the way I see it is that you build your portfolio over time and of course there is some holding cost associated with holding properties but it is impossible for investors to lob at the bank and say can I have finance for 2million worth of real estate (most people anyway). It’s a bit hard to buy all your portfolio at once at some specified time in the future.

    The other thing is that you would need to have the discipline to save the deposits for these purchases.

    If you buy over time you get the chance to know the market you are in like the back of your hand. You get the chance to put in offers and buy well below the asking prices and add a little value to increase yield or bank valuation. Sure this is the formula that people have been using for years but that’s because it works. By the time the market starts to move it is too late to get any real value. I would rather have a debt lean portfolio on hand to take advantage of the early capital growth in the cycle and then use the equity in these properties to buy more over time.

    I agree we need to consolidate but we can’t just sit on the sideless, where’s the fun in that!

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
    Email Me | Phone Me

    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of shaztazshaztaz
    Member
    @shaztaz
    Join Date: 2004
    Post Count: 113

    Don & Liz have some wise words of wisdom IMHO.
    I’m with you guys. I will also be out pounding the pavement looking for bargains and putting in some low offers to slowly build up my portfolio.
    We should be well placed and ready to take best advantage of the next boom.

    I believe with a little imagination, and an inexpensive makeover, you can create a +CF property in a regional city. There’s been examples of this on the forum in the past 12mths,
    so no need to sit on our hands, lets have some fun[biggrin]
    Regards,

    Sharon

    Profile photo of Michael WhyteMichael Whyte
    Member
    @michael-whyte
    Join Date: 2004
    Post Count: 269

    Yack,

    I hear you loud and clear, but I’m a bit more on the Don and Liz kinda approach right now. Property is only one aspect of my structure and as a percentage I’m going to scale it back from where it would otherwise be in a strong growth cycle.

    I am however about to buy another property but am picking my sub market carefully. I still like the looks of south east QLD due to affordability and growth potential. Sydney is way off the books for now.

    But most of my leveraged cash is getting parked in a trading fund in the equities markets. I’ll keep an eye on property and buy up to my $2M odd mark over the next 2-3 years. I’ll probably hold just one or two properties now at total value around $500K and buy up slowly another 2-3 properties at circa $500K each through the trough. I like the above median priced properties for the growth upside they offer. Cash flow and holding costs aren’t an issue for me.

    Cheers,
    Michael.

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

    Hi all

    yack you said

    In my view buying in the US is too risky for me

    Thats fair enough, i know you only like to buy near where you live, for me buying all over the place has shown huge rewards.

    they too are in a smimilar position in the property cycle.

    While there is a lot of talk about the US market being over valued the general view is that this is in relation to overpriced markets in California, parts of Florida and New York City. Large parts of the usa are very cheap and shown little growth over the past few years. I think the US market is behind us in the Cycle.

    The returns may be good in some areas but they come at a price – risk.

    No debate there is always risk, but for me buying in Melbourne or Sydney in this market is more risky.

    If returns were that good then why dont more people in the US invest in property rather than shares and their 401k.

    Well they are , investors from California are very active in the areas i’m buying. its a funny comment i got those comments when i was buying properties for $25,000 in Elizabeth, South Australia, when i bought homes in Morwell for $28,000, when i bought in hamilton for $36,000 and when i bought in New Zealand in 2003 (now i’m selling at double the price). Its all documented on this forum in 2003 i was telling everyone about the NZ possibilities (this is well before i started sourcing deals.)

    My uncle in law – who lives in Canada has always said to me NOW is the time to be selling not buying.

    He may well be right, i remember you telling me he is an experienced investor. If i owned property in Califoria i’d be selling also.

    Anyway – good luck with your spotting business. Hopefully your investors will not regret their investments over time.

    Thanks, i hope so to. Its an unknown i don’t know the future. Just because a lot of our clients have made heaps from NZ doesn’t mean its all going to happen in the USA, we just have to way up look at the deals and make our own minds up.

    regards westan

    Break into the foreclosure market in the USA or Cash Positive deals showing 15-25% Returns in the USA email me at [email protected] to join our database

    Profile photo of kpkp
    Member
    @kp
    Join Date: 2004
    Post Count: 509
    Originally posted by yack:

    Time to Consolidate?

    Forget about buying any property now.

    If you got properties just do what you can to consolidate.
    Pay a little more off or maybe do a little renovation.
    Wait for it to come back. Save a deposit in the knowledge that prices will possibly fall a little or remain constant.
    Don’t buy now just to find that in a few years you cannot afford this investment, its costing you money to hold an asset that is not appreciating and you got repairs and hassles with tenants. I can tell you it aint no fun paying interest, paying for repairs and addressing tenant issues when prices are not rising.

    If you do buy now and you do experience problems in the future or loose patience with the market and then decide to sell – dont worry – I will be there to snap it up. I am consolidating and aint buying anything for the next 3-5 yrs.

    What do ya all reckon?

    Scary stuff Yack,
    Sit on the sidelines for 3 to 5 yrs !!!???
    What if the market doesn’t come back by then…what next??? wait a few more yrs??

    Personally its full steam ahead…..and 100% property. There are so many opportunities out there to make instant returns. Profits from day 1.

    In 3 yrs I should expect to be fully consolidated…and you’re suggesting it will be time to wake up and start investing again ?

    Scary stuff…….

    kp

    Profile photo of kerwynkerwyn
    Member
    @kerwyn
    Join Date: 2004
    Post Count: 145

    Hi All
    After reading Yack’s post, I think I will just shoot myself: all is lost no good going on. I think I will just have to go back to my day job and grow old gracefully like the other 99.99% of the population.
    But wait a moment? I have had a flash of inspiration? Just maybe if everyone else is about to stick their heads in the sand for 5 to 10 years there just might be a few opportunities out there.
    Hmmm maybe I won’t shoot myself after all.
    Kerwyn

    Profile photo of kpkp
    Member
    @kp
    Join Date: 2004
    Post Count: 509

    Thats the point Kerwyn,
    There are always opportunities out there.
    Does everything come to a grinding halt coz the RE market is not performing??
    More a matter of ones mindset, and whether one wants to bother looking for those opportunities.
    Misnomer as far as I am concerned, as it still is performing as far as I can tell.
    Anyway, the more ppl sitting on the sidelines waiting, the less competition, so its all good !!

    Don’t shoot yrself….just get out there and do it !!

    Imagine how much you can achieve in three years……

    kp

    Profile photo of Don NicolussiDon Nicolussi
    Participant
    @don
    Join Date: 2005
    Post Count: 1,086
    Imagine how much you can achieve in three years……

    exactly KP. Also imagine how much you can learn in that time.

    Real life, deal making, problem solving experience. Three solid years of it.
    You will be way ahead of the pack.

    Cheers

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
    Email Me | Phone Me

    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of ANUBISANUBIS
    Participant
    @anubis
    Join Date: 2003
    Post Count: 559

    We have sold nearly all of our property in the last 6 months – the 2nd last one was listed a few days ago and we’ll probably keep the last one for a while longer yet.

    Residential Property isn’t as interesting or stimulating as it used to be for us, and being a landlord is over-rated for mine. I’ve never been into CF+ for the sake of it – quality over quantity.

    So we look like having a pile of cash and are investigating a business and a medium sized subdivision of around 30 acres.

    Profile photo of yackyack
    Member
    @yack
    Join Date: 2003
    Post Count: 1,206

    I am not entirely doing nothing. All I am saying is that my portfolio is now at a stage where its neutral. i believe in investing in city surburb properties near the beach and stations.

    Sure prices have gone down and there are opportunties, but i reckon the opportunities will be better in a few yrs.

    I am not the only one sitting and waiting for better opportunities.

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