Hey,
I'm looking to get into real estate investment & have been reading through forums, website articles and a few books..
The problem is… I'm not sure what to believe.I've read the books 'rich dad poor dad' & 'How to get rich using your banker's money'.
Rich dad poor dad was very motivational but that's about all it had to offer. I didn't really enjoy 'how to get rich using your banker's money'. It wasn't informative and suggested a highly geared strategy with no mention of risk management. There were also many exadurations and it seemed overly simplified and unrealistic.
Throughout this forum there seems to be alot of talk about positively geared property and there is an author selling a book based on positively geared property '0 to 130 properties in 3.5 years' (what does everyone think of this book?)
The impression that I am getting from this forum is that it is not overly difficult to find a positively geared property.
A website i came across 'http://www.johntreed.com/positive.html' states that it is very difficult to find such a property & that it is a common real estate fallocy exploited by those trying to sell books aimed at beginning investors.However, John Reed is from america and im wondering if it's different due to the taxation system?
Also, this author John Reed recommends 3 investment strategies:- bargain purchases
- upgrading
- double-digit cap rate acquisitions
& talks about how he does not recommend the 'Buy and Hold Strategy' that so many on this forum seem to be using. He says that by doing so your being a speculator and relying soley on your property appreciating in value.
'http://www.johntreed.com/recommend.html'This guy seems to be making alot of sense to me but im unsure about purchasing any of his books as he's from America and I'm worried that his advice may not be relevant?
Can someone suggest some helpful books that aren't created by an 'investing guru' to draw in customers to pay for overpriced, useless seminars. & that don't suggest reckless no money down strategy's that neglect risk management.Thanks
Hi Suchy,
I personally would only read property investment books written locally, as not only would the tax system be different, but mortgage and real estate rules are also different. Even in Australia, different states have some different rules.
You can search this site for some recommended reading, but I've read books by Michael Yardney, Ed Chan & Tony Melvin, and Paul Do, and have learnt something new from each of them.
All the best.
I think you have to be less skeptical when you're reading books and just take them on face value and get what you want from them. The positive cashflow methods detailed in Steve McKnight's "0-130 properties …" are just one of several methods of investing in property, as are John Reed's (who I haven't read).
If you read Steve's book, you will find that when he originally started out in investing, the strategies of negative gearing and pure 'buy and hold' were commonplace (as they've always been), but when he thought about it, they didn't stack up for him. I don't think it was so much that he thought they were bad strategies, more that he was looking for a positive cashflow to replace his employment income and therefore allow him to stop working. This is where you need to work out what your goals are and then investigate strategies that might get you there.
The benefits of negative gearing are the simplicity of the strategy: you pretty much just find a place that you think will appreciate in value, have a tenant pay some of your loan repayments and then just wait. The risks are as you know, a falling or flat property market and interest rate rises.
If your goal is similar to Steve's, then negative gearing won't work for you because you will need another source of income (most commonly employment) to plug the funding gap between rent and loan repayments.
Positive cashflow properties are out there, but they are not very common, or should I say easily found and they take a lot more finding and structuring than simply logging on to domain or realestate.com.au and expecting to pick up one. As Steve said, positive cashflow properties are made, not bought and this is why he used wraps and lease options extensively.
As far as whether or not to buy John Reed's books, even though he's overseas, you may still learn something.
Just think of investing like trying to lose weight. There are lots of different methods out there. most probably work, though some are scams
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi there Suchy,
As a few others have already mentioned, there are several different ways to skin the investing cat so to speak, all have their place.
But at the end of the day, it is very hard to beat long term buy and hold type investing, done correctly this is the way to long term sustainable wealth, that can be built and passed down thru the generations.
It is pretty hard to go wrong if you buy well located income producing property, even better if you buy well (at a discount) and are able to get a surplus positive cashflow from day one or after doing some renovation work etc.
Trading is ok, but you only make money the once and you have to keep doing the deals to make money. My suggestion to people is that if you are active in the market as a buy and hold investor, you will inevitably come accross deals now and then that you dont wish to purchase yourself, but there is still a dollar to be made by trading it on to someone else. This works out well, as you end up with big chucks of money to use as deposits for more buy and hold properties for your own portfolio.
Right now is a really good time to start, as there are plenty of oppuntunities around to pickup good properties at reasonable prices. There are a few key things that you need to understand tho, to stop you falling into the same trap that many newbies did towards the end of the last property cycle.
Best advice i can give you at this stage, is before you invest in a property, invest in yourself – It will repay you forever!
xya & bootross have provided sound & very useful comment, it is wise to concentrate on the Australian authors suggest you try some in this order:
1. Jan Somers – building wealth through investment property (an excellent read & starting game plan for novices)
2. John L Fitzgerarld – Seven steps to wealth (similar approach to Jan, easy to follow strategy with sound advice)
3. Michael Yardney- How to grow a multi – million dollar property portfolio ( a fantastic read, enormous amount of advice across the full specrum, some of his tips are directed at the more advanced property investor)
These and other australian property authors have helped me create a multi-million portfolio in less than ten years, especially Jan Somers who got me started – THANKYOU JAN.
So ……..A.S.K. your way to wealth
K-knowlege
S- strategy
A- ACTION ……………….just do it !xya & bootross have provided sound & very useful comment, it is wise to concentrate on the Australian authors suggest you try some in this order:
1. Jan Somers – building wealth through investment property (an excellent read & starting game plan for novices)
2. John L Fitzgerarld – Seven steps to wealth (similar approach to Jan, easy to follow strategy with sound advice)
3. Michael Yardney- How to grow a multi – million dollar property portfolio ( a fantastic read, enormous amount of advice across the full specrum, some of his tips are directed at the more advanced property investor)
These and other australian property authors have helped me create a multi-million portfolio in less than ten years, especially Jan Somers who got me started – THANKYOU JAN.
So ……..A.S.K. your way to wealth
K-knowlege
S- strategy
A- ACTION ……………….just do it !
You must be logged in to reply to this topic. If you don't have an account, you can register here.
