- Kiwi-FullaMember@kiwi-fullaJoin Date: 2002Post Count: 371
Great motivating post!
We started out about 9 years ago…. and have bought all our properties with none of our own money….. I can say it has not been an easy journey….. but it is great when you can walk out of a house with an agreement under your arm and have only paid a $1.00 option for control of the property for 5 years…… the first time I did this (about 5 years ago) I had to slap myself at the corner to make sure I was actually alive! haha
We have all of our houses managed out …. and have found that the best solution is to manage out the rentals… and self manage the Lease option properties (keep the easy stuff and farm out hte hard stuff!)
Accountants have been the killer for us too …. and they love charging for nothing….. but hey you do need someone to assist but ultimately we need to take the overall responsibility ourselves.
We moved back to NZ at the end of 2006…. after nearly 10 years living in Aussie….. formed a property finding company with another investor …. and are enjoying it very much….
http://www.housesmart.co.nzBaylbrParticipant@baylbrJoin Date: 2008Post Count: 8
My husband and I started property investing in 2001 and have bought, renovated, flipped, wrapped, etc since that time in Aust and NZ. Although some of our properties are returning 12%+ we always seem to find cashflow an issue. I think that it is all the accumulated costs, accountancy, solicitors fees etc that is part and parcel of running the business.
Last year I formed a company with 2 other property enthusiasts to purchase properties on options. We found the economy here (particularly with some developers 'falling over') not suitable. Although properties were cheap enough and the sellers were keen to look at our offers, the developers at the other end of the deal were a little less enthusiastic. Just not confident about their security and the end profit for them. Also, on some of the bigger deals, there was the worry about obtaining finance.
The 3 of us have put that business venture on hold, while we, as individuals pull some more cash together to start up again when the economy improves. I searched, instead, for something that is booming in the economy (why try and swim against the tide). It is my motto to strive and prosper….but I have had enough of the delayed gratification and now will only put my time into something that will make fat profit fast.
I would be interested to know how you guys are finding it in this economy.
Hi guys thanks for sharing your stories. It is always awesome to see and hear from others that are out there doing it too.
It has been really interesting over the last 12 months or so, seeing the effects on some investors. People who were either too highly geared and when values have come back they have gone into negative equity and their lenders have tipped them out. Or others who just didn’t have high enough yields/cashflows to support the interest rates we saw at the peak, and eventually got sold out at Mortgagee.
I have also seen a few people who took large punts on a number of top end (negative cashflow) properties not too long before it all started to correct. Where were HOPING to make a nice capital gain. Once the market turned, they were unable to support/fund these properties for the longer term, and either sold them for a large loss, or got sold out at mortgagee.
After witnessing all of this, It has really reinforced to me the benefits of good old buy and hold 'Cashflow Investing'. Where if you own a portfolio of good quality assets, that you have either bought well or have renovated etc (to create equity) and lower your Loan to Value ratio. And you have a sound cashflow from the portfolio to more than service your debt; there is no issue, even if the values have come back a little.
So while many of the over committed, and speculative type investors, have had a few issues and fallen by the wayside fairly quickly into the correction. I am more or less unaffected by the correction. I only have one of my properties where the rent has gone down, and that was due to me having the whole 10 flats leased to the one organisation. And they lost their contract with the DHB. So I had all 10 units in this one property vacant for a little while, until we relet them too private individuals (and we had to lower the rent a tad to get them fill. However this is only 1 property of a larger portfolio, where the other rents have been moving up, so it all balances out.
If that 10 flat property had been my only property, then yeah I would have struggled to support them while they were vacant. But this is one great example of how the risks actually can reduce with the more properties you own.
Oh well enough for now, that was only going to be a few words, but got carried awayKiwi-FullaMember@kiwi-fullaJoin Date: 2002Post Count: 371
Thanks Clint … and Belinda.
We have also seen many highly geared negatively cashflow investors bend, buckle and finally bow out! … we have also saved some on them during the process.
WE have also found that even with some of the very attractive properties we have sourced….. the numbers have been low on the uptake of these properties…. however we have on the other side of the coin managed to secure some very secure white collar investors that have signed on with us …. so every cloud has a silver lining.
on another note … lease options have been on the increase….. we just secured 2 in the last 2 weeks and now control $900,000 of property (the 2 properties in 2 weeks) for 5 years ….. and all for only $5001 dollars … $1.00 for a $525K house and $5K for a 400K house…..
The deals are really out there and all you have to do is know how to solve problems (funny sounds like Steve Mcknight talking)…. and build report.
Anyway … good chatting with you all and good luck in the best time in our current market for buying
http://www.housesmart.co.nzl_b29265Participant@l_b29265Join Date: 2003Post Count: 26
HI Kiwi Fulla, any chance you had a few spare moments to share a few thoughts on lease options. I read your post above, and it sounds interesting, but I don't know alot about the process, and risks. If you care to share, that would be great. ThanksHi guys,
As you may have already seen in the news, rents across NZ have taken a hit due to an oversupply of properties currently for let. This has mainly been caused by the many home owners that have been unable to sell their homes, and have had to move away regardless and have been forced to offer their properies for rent.
It has been common place for some medium to higher end properties to have dropped back by as much as $50 per week, thats $2,600 per year! And worse still If you are an investor that owned four such properties, that would be a reduction of annual rental income of over $10,000 per year, on properties that were already fairly negitive for cash flow to start with.
There are certain things we can do as investors to limit or completely avoid being effected by situations like this.
I have written a blog where I discuss how I have structured my portfolio to protect me from these rental decreases that many other property owners and investors are currently experiencing, and how you can too.
Click HERE to read the Blog
Hi there guys,
Just a quick update: We are now offering free access to 2 hours of content taken from our online property mentoring course for those of you who wish to check it out, this is just a very small sample of a few of the 12 modules.