Commercial Property Education

[JIT]

Hi,

How does someone go about learning how to invest in commercial property in Australia?

There is clearly a plethora of options to learn about residential property investment, but very, very few avenues to learn about commercial property investment.

Furthermore, there are plenty of resources for commercial property investment in the US and UK, but comparatively very few in Australia.

Does anyone have any ideas or suggestions?

To start off with...

Books

'How to Invest in Commercial Property' by Martin Roth and Chris Lang
'Australia's Top Property Trusts' by John Welch

Websites

www.gal.com.au (Gardner and Lang)
www.propertyoz.com.au (Property Council of Australia)
www.propertyreview.com.au (commercial property news)
www.commercialpriceguide.com.au (commercial property auction results)
www.realcommercial.com.au (property search engine)
www.domain.com.au (property search engine)
www.realestateview.com.au (property search engine)
www.propertylook.com.au (property search engine)
www.propertyweb.com.au (commercial property search engine and news)

Newspapers

The Australian Financial Review
The Australian, Thursday Edition

Courses

www.investcommercialproperty.com.au (Michael McCombie DVD course)

Investment Research Companies

www.pir.com.au
www.aer.com.au
www.lonsec.com.au
www.miaresearch.com

That's not much of a list, but it's a start. I hope that this commercial property forum on Somersoft (thanks Moderators!) can in the future be as good a resource for commercial property investment, as it is now for residential property investment.

I will add to the list as I find more resources.

Any other ideas welcome.

GSJ

[The Y-man]

I think there's a huge resource on this forum that starts with a "D" and ends with "azzling" ;)

Cheers,

The Y-man

[JIT]

Yep, definitely read Dazzling, as well as grossrealisation posts - I certainly have, they will all be in here. I'm sure they will continue to post on these topics.

Can also do searches on commercial property investing on www.propertyinvesting.com and www.invested.com.au.

GSJ

[geoffw]

The Roth/Lang book is fairly general. It covers something which other books don't- but I don't think it's enough to start investing directly in commercial investment property.

[JIT]

Agree re. the Roth/Lang book. Problem is, I don't know of any book that explains CP investing in a clear and practical way...

GSJ

[Dazzling]

G'day GSJ,

Thought I'd quickly respond.....I reckon the best way to hook in and get up to speed is to simply buy something and learn the ropes, just as you did with the ressy stuff.

Trouble is, that step usually scares the living wits out of people.....not to mention costing a wee bit too, and they'd rather do some "research" prior to jumping in the deep end.

It's pretty clear that there is a need for a decent warts and all Ozzy book about the nitty gritty trials and tribulations of non-ressy property stuff.

I was looking for the same thing 3 years ago, but there was nothing there. All of the elderly chaps I was talking to could have written a decent book 10 or 15 years ago, but I think they are far too busy making big money to put pen to paper trying to explain what they do.

The flip-side of that of course, is that I feel completely unqualified to write anything about the subject, 'cos I'd be mortified if I ever was approached by one of those chaps and they asked me my 'qualifications'.

I think there is a lot to be had in writing down your experiences, which I have done to some extent and posted some quite detailed info on this forum (much to the wife's displeasure).

If I ever get the chance I really should write a nitty gritty 'how to' book on our industrial successes and our commercial attempts that ended in non-starters. My biggest blocker at the moment is time - lack thereof - currently supervising the drilling of oil wells off the coast of WA.....it takes a bit of time and effort managing an operation costing the company $ 500 / minute.....for weeks on end.

Anyway, let's see what happens in the new year....might call it something like "Tales from the industrial property trenches - what not to do"

[JIT]

Thanks for the reply Dazzling,

Jumping straight in and learning as you go is an option, but may not suit everyone, as you say. I certainly feel I would need a bit more reading or research before I could do this - a way of minimising risk/loss/stupid mistakes when beginning. The last thing I want is to blow all the equity and income generated from years of resi. property investing, on one bigger CP deal.

If you, or anyone else, does end up writing up a CP investing book that would be good. Until then, we will have to be a bit more resourceful and find other means of getting up to speed on CP investing. Again, in time, with more interest in CP investing, this forum may provide a good starting point.

As baby boomers approach retirement and look for more income-generating assets, I think there will be a shift of wealth into this asset class, particularly for SMSF.

GSJ

[JIT]

The Property Council of Australia website (www.propertyoz.com.au), seems to be by far the best educational resource for CP I've found so far, there's a lot of information and links there.

For instance:

- a PDF guide to CP called 'Build Your Wealth' which seems very good
- books on topics including due diligence, tax, finance, property management, maintenance
- listings of seminars on each of the CP sectors and their outlooks
- courses on property and leasing fundamentals, investment, finance, asset management

I would certainly look at buying some of these books and doing these seminars/courses, in due course. They are definitely not cheap, and perhaps more focussed towards industry professionals, but still seem very relevant to a potential CP investor. The books are not like the stuff you would find at your local bookshop. I would probably start off with some of these books, before looking at the courses.

Has anyone bought or done any of these books/courses?

Also, other websites...

www.morningstar.com.au (property trusts/funds search engine/ratings).

www.adpia.com.au (Australian Direct Property Investment Association/property syndicates)

www.afrsmartinvestor.com.au (AFR Smart Investor Magazine)

And another book...

'Super Safe Investing In Syndicates & Listed Property Trusts' by Tim Hewat, haven't read this one yet.

GSJ

[JIT]

I might be the only one interested in this thread, but, I will just add the results of some old research on CP education, I did a couple of years back.

These are some overseas websites/forums, which are quite useful with regards to CP content (from what I can remember, when I did the searches a while back), but obviously not particular to the Australian market:

www.thecreativeinvestor.com/commercial
www.creonline.com/commercial-real-estate
www.creforum.net
www.dealmakerscafe.com/forum
www.realestatewebmasters.com/forum.php
www.askaboutmoney.com
www.investmentbanter.com
www.reiclub.com
www.aireo.com

Here is a site for a course on commercial and retail leasing:

www.australianproperty.qld.edu.au/?page=shortcourses

GSJ

[The Y-man]

I might be the only one interested in this thread....
GSJ

You are not alone! :)

Cheers,

The Y-man

[JoannaK]

Hi GSJ,

I have some commercial experience, both from my property management days, and as a developer and keeper of our commercial properties.

Really, the only way you can learn is to ask, ask, ask. Sure, read the books; i'm sure there's many out there (i wouldn't know, i haven't read any to be honest), and do courses (property council is a standout leader here, although a touch on the expensive side), but nothing beats the good old wisdom you get from someone who's been there done that.

One of the main things to keep in mind is that the value is almost entirely dependant upon the lease on the property.

It is definately a different ball game to the residential side of things, and a lot more satisfying in my mind.

[JIT]

You are not alone! :)

Cheers,

The Y-man

Ah, that's good - thanks Y-man!


Really, the only way you can learn is to ask, ask, ask.

JoannaK

Yes, I agree, I will certainly be doing more asking, eg, on this forum with new threads - in due course, and I'm sure others will too.

Thanks,

GSJ

[bundy1964]

One of the best things I found to learn from was to go to auctions and do a lot of listening to the old players.

[JIT]

One of the best things I found to learn from was to go to auctions and do a lot of listening to the old players.

Nice tip, definitely worth a shot.

GSJ

[JIT]

Ah, www.invested.com.au now has their own dedicated 'commercial property forum' too!

GSJ

[markp]

Befriend a commercial real estate agent. They have a wealth of knowledge. The larger firms produce their own investment reports. All free, filled with more info. and research than you need.

[JIT]

Yes, and my understanding is that they are probably far better than residential real estate agents in this regard.

GSJ

[markp]

Yes, and my understanding is that they are probably far better than residential real estate agents in this regard.

GSJ

Yes indeed. True professionals, the standard can be, and usually is very high.

[Sam_H]

Hi Guys

Just wondering if anyone had purchased/listened to the Michael McCombie seminar/dvd set?
The dvd set of 6 costs around $500 and sounds like it could be fairly useful?

Any feedback appreciated!


cheers

Sam

[Michael Yardney]

Over the last few months I have spend quite some time putting together the basis of a seminar on commercial property - Getting Started in Commercial Property Investing

I will probably be holding this one day seminar in late February 2007 in Melbourne and possibly Sydney & Brisbane depending on the interest.

A very subsstantial portion of my property portfolio is commercial -shops, warehouses, offices and bulky goods stores. I have even done one (very successful) industrial broad acre subdivision.

I was intending to conduct this semianr because I believe there is a strong demand for this type of information and this thread shows it.

Could I please ask interested forum members to suggest topics or areas they would like to see covered at this seminar.

further details will eventually be circulated through Property Investment Update (http://www.propertyupdate.com.au)

[Sam_H]

Michael

I for one - would be very interested in attending such a seminar. I had the fortune to attend one of your evening seminars in 2004 in Sydney on residential property investing -and it made a lot of sense.
I guess what I am interested in hearing is:

# The differences in each type of CP - retail/industrial/offices etc
# How to value a property
# Understanding the contract of sale
# Understanding the lease
# Finance tips
# Property management tips

+ any other tips?


Cheers


Sam

[JIT]

Michael that is good to hear re. the seminar in the works.

Sam H,

I have seen the McCombie DVD's (a few years back though), he is a NZ chap, that has invested in commercial property in Australia, and points out that he has made money here largely by investing as opposed to development.

From what I recall, it was a reasonably good DVD set, reasonably priced and fairly practical information - as he goes through worked examples of buying a commercial property and making an offer. Just scratches the surface though, and perhaps not enough depth on some key areas, eg, property valuation.

GSJ

[Sam_H]

GSJ

Thanks for that.I am primarily interested in retail commercial property. I did hear a small snipet from a McCombie interview - sounded good - but perhaps more focused on industrial/office CP? Any idea if it spends much time with retail CP?

Thanks again

Sam

[grossreal]

hi all
couple of things with regards to comm investing.
1. get a property that is easy to lease to a targeted market so if its a bank for interest make sure that the bank s going to stay there or that the area is growing nad they will need to keep the bank.
2. try to gauge if the comm is easy to release and
if it needs refurb for a market that is in demand in that area for that type of comm
doctors legals what ever.
3.the sale price and the buy price is dependant of the lease and the value does not increase like resi
so you need to work out your tennant against the return you want to achieve and the long term viability of that tennant.
4.lender only lend up to 70% as the norm but I have got westpac to 80% but using bank bill rate.
5.the returns are around the 10% for comm so its good returns but very low growth curves as the norm again.
6.remember it always looks greener on the other side of the fence
so all that glitters is not gold it could be glass so you need to do some very good feasibilty workout before you buy.
7. buy something you can handle ie a shop or an ex bank not a shopping mall with a group of friends and there are few syndicates running around with this view.
8. once you have started to get into comm you will find that you will need either 30% cash or 30% equity to move forward and this is not easy unless you have a plan of doing it and planning is the name of the game.
for me comm is the corner stone of investing and is never sold because it should never have to be.
a good comm in an area that is always in demand is a feeder to you business or structure.
9. and this is very important resi, comm or other (hotel's,community services or large institutions) are all very different markets
and do not run on the same rules or the same mind set,with comm you are not buying a property
you are buying an item that someone will want to lease for a long time with a return
you are not looking at a price tag but a return and that return gives you the price tag.
and is relatively irrelivant what other building have sold for in the area
your building is bought or sold on that return or that potential return.
10. last but not least is the tennant this is the most important part of comm you must be happy with the tennant and you must check out there credentials I aim for the single business and some of mine are on the second board in newcastle so very secure tennants.you want a long haul tennant with a very good rent I lower my rent to start but 6% or cpi increases per year which ever is the higher and after 5 years I am over the market for the area but the tennant is happy, I am happy
and they want to stay,comm is not a quick gain market.
I am no expert in this market and do not profess to be one, I am no expert in any market I am just a mug investor (even the banks don't have a job discription for me so I suppose I could be classed as an unemployed mug investor)so don't go off anything I post just use it as information.
1 side line to this which is very funny, (well to me anyway) is that for an unemployed mug investors they still lend to me and at levels that most full employed financial advicer would not get the lend but thats a very different question,
I think that you need to get in and get dirty as dazzling says and do your own due diligences

[APerry]

lender only lend up to 70% as the norm but I have got westpac to 80%

70% is certainly thew norm, but you can get up to 85% without suffering too badly in terms of rate. Servicability requirements tend to be more strict once you go above 70% however.

[Sam_H]

Hey GSJ

Do you have a link to that pdf on the properrtyoz.com.au website by any chance - couldn't seem to find it?

Thanks

Sam

[JIT]

SamH,

Regarding that DVD, I think he focussed on industrial.

The link - click on 'resources', then click on 'build your wealth', then click on 'download your PDF copy'.

GSJ

[LearningMan]

In my view people will always need a HOME to live in and this is why I choose to invest in RESIDENTIAL properties vs COMMERCIAL.

GSJ - You are right however in saying that there is not a lot written on commercial property investing.

My 2 cents worth ...

[The Y-man]

In my view people will always need a HOME to live in and this is why I choose to invest in RESIDENTIAL properties vs COMMERCIAL.


Mind you, they often need a place to work in as well..... :p

(and to go shopping, and for the recreation, etc etc....)

Cheers,

The Y-man

[LearningMan]

Mind you, they often need a place to work in as well..... :p

Cheers,

The Y-man

Not during a depression or bad times ... ;)

[burstock]

for my 2c worth, after a few years OS (hence nil posts), it seems that Comm is better than Resi at the minute, although as I heard at a recent simnar, the Aust market is big enough that there is always a boom or bust going on somewehere.

Mike Y, if you read this, ineterested in -

property selection
financing alternatives, and
specilaist commerical agents, to by and potentially to manage.

[APerry]

Not during a depression or bad times ...

If they're not working they won't be able to afford much rent either.

[LearningMan]

If they're not working they won't be able to afford much rent either.

What about savings ? Or perhaps money lent from parents ?

[JIT]

Below is the link to Chris Lang's new seminar on commercial property investing. A 1 day seminar in Melbourne for only $147. The title is:

No Guns ... No Horses
Chris Lang at his best
"Just straight-talking Advice to Help Insure Your Success,
Whenever You Invest in Commercial Property"

http://his-best.biz/2006/11/29/join-a-vital-property-workshop-in-the-new-year

GSJ

[P_M_A]

Hi everyone
First of all, thanks very much to all the experienced people who have made posts here to aid in the education of the rest of us. It really is appreciated.
GSJ, thanks for starting the thread, I hope it becomes a great source of information for neophyte commercial property investors.

Just on that link that you posted for Chris Laing, has anyone read his book? If so, is it worth getting? I guess I have been scared off of commercial/industrial by all the well-meaning authors who stated that it was such a huge amount more risky than residential.

A couple of questions for some of the commerical/industrial forum gurus if I may:
1) Would you suggest building up a decent residential portfolio before venturing into commercial? From reading previous posts, Dazzling had 6 or 7 residential before going industrial, so I assume he had a pretty reasonable net asset base to work from. Has this helped a lot?
2) For someone with a lower income, are there any suggestions as to a reasonable entry level of investment into commercial/industrial to make? Is it not worth while looking under $1M for example?
3) Are there any educational resources you folks would recommend (outside the forum)?
4) Would there be a suggested amount of cash you would want available to you before going into a commercial/industrial deal? On the first property I am sure there would be teething problems, slow to get tenants, etc, should you budget on having 6 months interest repayments available before you even look at a property?

Also just for interests sake, I think it would be good to post some links to some commercial/industrial properties currently available, and see if anyone has any comments as to why that might or might not make a good investment. Obviously not from a financial advice point of view, but more just to think of things we may not have originally thought of, or perhaps see it from a different angle. Appreciation in advance to anyone who is kind enough to answer these questions!
The first one to look at for interests sake:
Commercial deal in Perth (http://www.realcommercial.com.au/cgi-bin/rsearch?a=o&id=5226808&f=10&p=10&t=com&ty=&fmt=&header=&c=84220883&s=wa&snf=ras-per&tm=1169469958)

Any comments/views/opinions greatly appreciated!

[grossreal]

hi
I will have a stab at it
just don't put me in any guru class.
I will answer your questions in red first give you my ideas on that deal.


Just on that link that you posted for Chris Laing, has anyone read his book? If so, is it worth getting? I guess I have been scared off of commercial/industrial by all the well-meaning authors who stated that it was such a huge amount more risky than residential not true if you understand what you are looking for I have made alot more losses or correction on resi then comm about 8 to 1 to resi.

A couple of questions for some of the commerical/industrial forum gurus if I may:
1) Would you suggest building up a decent residential portfolio before venturing into commercial? From reading previous posts, Dazzling had 6 or 7 residential before going industrial, so I assume he had a pretty reasonable net asset base to work from. Has this helped a lot? don't know about dirt thats dazzling lot of people you don't need alot of money i have one that was bought for 400k 5 years late it worth 850k I am equity lending against its value as the rent has gone in 5 years from 39k to 52k and I am equity lending against this new value and buying a 3.1 mil come on a 9% return with 3.5% increase per year 15 x 5 x 5 goverment backed this is stand alone no other assests and the loan is being done on rental alone.
2) For someone with a lower income, are there any suggestions as to a reasonable entry level of investment into commercial/industrial to make? Is it not worth while looking under $1M for example? the level depends on your risk profile 400k is a good place to start divide price by net return and get annual increases cpi or 5% is my favourite but if you buy it cheap then a lower annual is ok by me
3) Are there any educational resources you folks would recommend (outside the forum)? your own the best form of education is doing it yourself thats why I don't read books or write them I spend about 5 hrs a day educating myself on the areas that I wish to achieve in currently I am buying comm so I will do a swat analysis on an area just like you would if you were buying a business and you can't find a book on different businesses
4) Would there be a suggested amount of cash you would want available to you before going into a commercial/industrial deal? On the first property I am sure there would be teething problems, slow to get tenants, etc, should you budget on having 6 months interest repayments available before you even look at a property? I have not taken 1 dollar out of my pocket to fund my comm happyI get them on a long lease keep the rent to market to start and get them happy.
for a comm to move out unlike a resi is a very big cost( stationary phones etc so they do not want to move so you work on that and keep the tennant happy non of this wine at christmas just is everything ok I manage my own comm's and they have my mobil and I have there md mobil if there is an issue
rule number 1 is buy quality not quantity for me but dazzling may have a different view but each to his own and good luck to all

Also just for interests sake, I think it would be good to post some links to some commercial/industrial properties currently available, and see if anyone has any comments as to why that might or might not make a good investment. Obviously not from a financial advice point of view, but more just to think of things we may not have originally thought of, or perhaps see it from a different angle. Appreciation in advance to anyone who is kind enough to answer these questions!
The first one to look at for interests sake:
Commercial deal in Perth
not for me this one
why
its a 7% return, price divided rent and no annual increase.
at 3 mil I have two in cbd sydney one at 9% and the other at 7% the 9 is 3.5% annual increase and the 7% is at 5% annual inrease in rent both alot better then this and both have offers on them by me.
and we are haggling about the price one will come over the line.
there are thousands on properties you need to get the grain not the chaf.
and comm is more cut throat then resi as most are +ve to start with so any really good deals wouldn't appear on a board.
both of the deals above have been on the market for over 12 months at the same returns so a 7% no annuals is going to be there for some time if they are waiting for a comm investor to buy it.
I will endevour to link to some that are outside my criteria and would be a good investment for dirt
mine are a very narrow widow that I am looking at.
happy hunting
Any comments/views/opinions greatly appreciated

[P_M_A]

Thanks very much for your reply, appreciate your time.
Just in case I am missing something, that advertisement says: "Annual rent reviews to CPI (min 3% - max 8%)"
Doesnt this mean an increase each year at CPI?

[Chris Lang]

Hi :

I've only just joined this Forum, and noticed the feedback on my latest Book.

Yes, you could perhaps describe it as general - in that it covers a fairly wide range of topics. But what it tries to do is deal with the proven fundamentals of CP Investment - rather than "hype you up" on the potential for fast profits.

Maybe you could think of the Book as being the "Graduate" level. Because, I'm actually running an in-depth Workshop (http://his-best.biz/2007/1/18/early-bird-registration-expires-on-31-january), which you'll find is probably pitched more at the "Honours" level of CP Investment.

Anyway, it is a day-long Workshop, which is being held on Saturday 24 February - at the Athenaeum Club, 87 Collins Street, Melbourne.

And you'll see there is also a special discount (http://his-best.biz/2007/1/18/early-bird-registration-expires-on-31-january), if you want to bring along family members.

Hope to see you there.

Regards … Chris Lang

[JIT]

Hi Chris Lang,

Thanks for coming on board Somersoft.

Look forward to your contributions, your experience will be invaluable to the new Commercial Property Forum.

GSJ

[Chris Lang]

Hi GJS and other CP investors ...

Tell me what some of the queries are that you have. And let's see if I can be of any help.

By the way, are you planning to come along to the February Workshop (http://his-best.biz/2007/1/18/early-bird-registration-expires-on-31-january)?

Best wishes ... Chris Lang

[JIT]

Hi Chris,

I will endeavour to attend the seminar, if I am in Melbourne on that date. I'm sure a few here on the forum will attend.

Generally speaking, some things to address for beginners to commercial property investing - either on the forum or in seminars or books, could be:

(1) Commercial property cycles: typical patterns for each sector (office, retail, industrial) and where we are at the moment in each sector's cycle in Melbourne/Victoria as well as other capital cities/other states. Any general comments about the nature of each sectors cycle, eg, how long they are, how it progresses and the key influences on each cycle...?

(2) What is the best sector to start in for someone investing in commercial property for the first time, and why? The pros and cons of each sector for a beginning investor?

(3) What are the entry price levels? Is it worthwhile investing at lower price levels - aren't you taking on a significantly increased risk due to having smaller businesses as your tenants?

(4) Purchase as vacant possession vs going concern - pros and cons?

(5) How do you determine the best cities/suburbs/areas to buy properties in each of the different sectors? Eg, Melbourne vs Sydney, CBD vs inner vs outer vs regional vs rural cities/suburbs/towns? Ie, say you decide to start off in office property, where is the best place to start looking for them, if you have say 250k, 500k, 1Million, 2Million dollars etc to invest...?

(6) What are some important criteria in individual property selection, for each sector?

(7) Important aspects/clauses involved in negotiating contracts to purchase and lease agreements, as well as financing.

(8) How do you value a commercial property? What data is needed to do this, where do you find this data?

(9) Learning by doing is important, but is there any other essential information that one should read about or know, before jumping in? Any pitfalls, dangers, any obvious things that one should be aware of?

(10) MOST IMPORTANTLY, worked examples of commercial property purchases, with a focus on showing why you chose that property, how you valued it, how you negotiated the purchase, found the tenant, negotiated the lease agreement and financed the whole thing.

See this worked example, started a few years ago, which was very helpful - http://www.somersoft.com/forums/showthread.php?t=288 - a great way to understand commercial property investing in a practical, staight-forward manner.

Thanks!

GSJ

[silas]

Great questions GSJ. Having talked to a few investors I have found it difficult to get an answer on cycles I understand the supply and demand aspects of commercial cycels but would like to understand more of the length of a typical cycle and where we are up to at the moment.

Silas

[grossreal]

hi all
here is a little excel for you to get an idea of equity lending of comm property
this is very rough figures and are just to give an idea of how it works and you can change the amount to start as required.
I am not great at excel but as long as you get the idea thats the main thing

[JIT]

Hi grossreal,

Some of the numbers in the H column don't quite make sense to me, but as you say it's rough - nonetheless, I understand the basics of what you're saying in the spreadsheet. The equity lending and 'double investing' as you call it, certainly seems quite logical and effective.

GSJ

[Chris Lang]

Hi GJS:

Thanks for your 'shopping list' of queries.

It's been one of those days for me -- so I won't be able to come back to you on them till tomorrow, if that's OK. But I should be able to contribute something worthwhile on most items.

Let me put it together overnight.

All the best ... Chris

[JIT]

Thanks Chris,

I don't expect you to answer all the questions, that was just a general outline of what I think many people starting off in commercial property investment would probably want to know.

Some of these questions have been addressed on the forum and also in your book, to different degrees - and I suspect you will cover some of these areas in your upcoming seminar late Feb.

Any further comments/answers you, or anyone else, may have to them, I'm sure would be much appreciated by all here on the fourm.

GSJ

[Chris Lang]

Hi everyone :

The other day, GJS posed a number of key questions on
Commercial Property. And apologies for not replying sooner.

What I've tried to do is briefly address each query. And,
where possible, give you some links to read further -- if you
would like more information.


(1) Commercial Property Cycles

In Australia, the dominant Property Cycle is for CBD Office --
which has historically run for 18 years from peak to peak. The
shorter cycles are the Industrial (about 9 years) and Retail
(about 6 years).

For a more in-depth explanation, you may perhaps like to have a
look at one of my client eBulletins (http://www.gal.com.au/FREE-eBulletins/Current-eBulletins/Understanding-Property-Cycles.html) [if you're not already a
Member on my website, you'll need to quickly subscribe -- but
it's completely free].

As to where we are in the current cycle, I covered this in some
detail in my December eBulletin (http://www.gal.com.au/FREE-eBulletins/Current-eBulletins/Thinking-Ahead-3.html) -- showing the position you are
at for each capital city.

(2) Which is the best Sector for investing?

To some degree, this will be determined by your own personal
preference. But that aside, here are some personal views:


Retail ... In most capital cities, Retail property is
currently fully priced and not something I would pursue.
You may discover some "spot bargains" in some outer-
lying suburbs - particularly in the Provincial cities.

Industrial ... This has made a comeback over the past 5 years,
and still has some good growth left - generally, Australia wide.

Offices ... Melbourne and Sydney look fine; whereas Brisbane &
Perth are overheated - as mentioned in the December eBulletin (http://www.gal.com.au/FREE-eBulletins/Current-eBulletins/Thinking-Ahead-3.html).

To give you an idea of total sales in all Commercial sectors
over the past 10 years, you may like to look at today's posting (http://his-best.biz/2007/1/25/commercial-property-sales-for-2006)
on my blog.

(3) What are your entry price levels?

You're right -- there is more risk in buying the lower priced
properties -- for two reasons:


There are far more people competing for properties under
$1 million, than over $1 million - so you end up paying a
very full price.

Smaller tenants do tend to move more frequently - more so
with factorettes.

You see, smaller businesses are more often start-ups. And they
tend to quickly head in one of two directions - either rapid
expansion, or early demise. Both eventualities can lead to your
property becoming vacant more often than with larger properties.

Over the years, a growing number of our smaller clients have
realised this problem. And, therefore, they have asked us to
help put them together with one another, into private syndicates (http://www.gal.com.au/Main/Syndication.html)
- enabling them to step into the "big league", and obtain better
returns.

This may be something you may consider. Because, with only 10-
15 people involved … you have a direct involvement in property
choice, and the ongoing activities of the Syndicate.

(4) Vacant possession Vs going concern?

To a large extent, this depends upon your personal circumstances.

If you don't need an immediate cash flow, buying with vacant
possession will generally provide you with discounted price.

You also need to remember that you pay GST with vacant
possession; but not if it is a going concern. (This is again a
cash-flow issue, because you can claim the GST back when you
lodge your first BAS return.)

(5) Determining the best cities/suburbs/areas to invest

To be fair … the complete answer to this query cannot really be
covered here, in the detail it requires.

Perhaps, people could bring "live" propositions to the Forum;
and then a number of us can provide our collective wisdom.

(6) Important Property Selection Criteria

One thing we cover in some depth for our clients, is the need
to have a clear understanding of both your Investment Objectives (http://www.gal.com.au/FREE-eBulletins/Current-eBulletins/Sound-Objectives-will-Help-Frame-Your-Success-2.html)
and your Buying Criteria (http://www.gal.com.au/xeB-0801/).

And then, how to combine the two into an Interactive Matrix (http://www.gal.com.au/index2.php?option=com_content&task=view&id=127&Itemid=129) -
which then makes it easy for you to quickly rate the properties
you're looking at.

(7) Successfully Negotiating your Contracts

Whether it's a Purchase or Lease contract, you need to realise
there are usually 5 or 6 variables available for you to
negotiate. So, don't simply focus on the price, or rental.

The trick is … you need to first discover what is important to
the other party -- so you can help him (or her) satisfy that;
and, thereby, secure yourself a great deal overall.

I will be covering this in some considerable detail at the
February Workshop (http://his-best.biz/2007/1/18/early-bird-registration-expires-on-31-january). So, in fairness to those attending, I may
leave it at that for the moment.

However, you're more than welcome to download a free eBook
about Negotiation (http://www.gal.com.au/index.php?option=com_remository&Itemid=145&func=selectcat&cat=1) from my website.

(8) How do you Value a Property?

To become a qualified Valuer, it takes you 4 years of full-time
study. So, I'm not going to be able to cover this in too much
detail.

Basically, a valuation involves the gathering of sales, yield
and rental evidence from comparable properties. From there, you
analyse and extrapolate that information -- so that it can be
properly applied to your chosen Property.

In arriving at a final figure, Valuers generally use three
methods of valuation:


Direct comparison,
Discounted cash-flow, and
Summation (ie: Land Value + Building Value).

In most cases, one method is the more appropriate. But the
others will provide you with a check against gross error.

A couple of good sources for your evidence would be Commercial
Real Estate monitor from Property Web (http://www.propertyweb.com.au/); RPData (http://www.rpdata.net.au/); and the Valuer
General's office in your state. All can be obtained through
subscription. (Perhaps a good place for you to start maybe
Land Victoria (http://www.environment.vic.gov.au/land/lcnlc2.nsf/childdocs/-418EED712A81C5AE4A256A0A0015CDC1-26C8409B2467569D4A256A0A001DAC6F-4FF5582EDD1DD6B9CA256E5F0014C0EE?open)).

(9) Obtaining other Essential Information

You're right, nothing beats experience. However, that can
often prove to be an expensive teacher.

I guess that's why I co-wrote the book "How Commercial Property
Really Works (http://www.gal.com.au/Home/)". Simply because:, after some 37 years, you can
appreciate there are a number of things I've come across that
work; plus those that don't work.

From memory, there are several pages (with links) devoted to
useful Investor resources.

(10) A Worked Example

The example GJS gave was a good one; and walks you through that
particular issue step by step.

Unfortunately, I've run out of time for today. But, over the
long weekend, I'll prepare some thoughts on a rather fascinating
deal I put together for a small group of clients. It involves …
how to change the Buyer perception for a property, using some
clever "stealth marketing". And by doing so … increase its value
(in this case) by some 170% in just 3 years.

Being new to this Forum, I'm not sure whether what I've covered
here, is what you were after. But, hopefully, some of it will help
you "fill in a few blanks".

Anyway, enjoy the weekend.

All the best … Chris Lang.

[JIT]

Wow, thanks Chris - those types of replies are exactly what we are after here on the forum. I certainly appreciate some of the topics are a bit too broad to discuss in one hit, and I know you have covered some in your book and e-bulletins.

You mentioned private syndicates - I think they are an ideal investment for self-mananged supernannuation funds, given they generally have a medium to long-term time frame (5-10 years), generally are illiquid investments, and more importantly seem to not allow leverage of your investment funds - which is not allowed in a SMSF anyway. Furthermore, you know exactly where your money is being invested (as opposed to LPT's, where they are 'stapled' and have various business activities) and you have can have some degree of control of the investment given there a smaller number of investors, and one or only a few properties being invested in per syndicate. Perhaps also, the invesments performance may be more predictable and less volatile than that of a LPT. Also, for people approaching retirement, these syndicated commercial investments can provide a secure, reliable, inflation-hedged income stream, with some capital growth potential - and without out all the hassles and added risk of buying individual commercial properties on your own.

I think the best way to learn more about commercial property investing, apart from doing of course, is for people to start threads describing any potential commercial property deals they are looking at, and then as Chris suggests, let others on the forum make suggestions/contributions and develop a discussion from it.

If you have any deals you are looking at, it may be better to start a new thread for it and post them in this commercial property forum.

Mike's old thread, 'Estimating Buy Price - Part 2', I suggested earlier is a good example of this, as was grossrealisation's thread 'welcome to my world':

http://www.somersoft.com/forums/showthread.php?t=26433

Look forward to reading about your deal Chris, and anyone else's...

GSJ

[grossreal]

hi all
not sure if we can post deals or deals we are doing in here
as I think they need to a go to caveat emptor and b they are sailing very close to the asic 2/20 rule and if you don't understad what that is I can explain it at this stage I take you understand the rule.
comm uses syndicates in lots of very diffent ways and is the most popular form of investing and as a sophisticated investor ( and you need to say you are one of those to get involved in most of these syndicates) you can get access directly into projects that you cant get into as a normal rule.
you evaluate the same as if you are buying yourself just the numbers are larger.
The trouble with syndicates and I like them
is that they are not restricted to property and the 2/20 rule is not restricted to any market so I will be very generic with any information.
example only
most people see 3 mil in comm as alot of money but between 3 thats a 300k each input and the lender covers the rest
so loan 2.1mil interest 151k and an income of 310
thats 53k each on a 300k investment about a 17% return on your money in
plus 1/3 of any growth plus 1/3 of any annual increases.
I am interested in the cycle for retail mainly the shopping center market and chris's view on the current sydney center market as there is a few on the market with good returns with very good anchor tennants not sure of the reasoning for the sales.

[silas]

Thank you Chris for your reply it is very helpful

Silas

[The Y-man]

Being new to this Forum, I'm not sure whether what I've covered
here, is what you were after. But, hopefully, some of it will help
you "fill in a few blanks".


All the best … Chris Lang.

You might very well find an increase in the number of attendees to your workshop with informative posts like this! :)

Cheers,

The Y-man

[JIT]

comm uses syndicates in lots of very diffent ways and is the most popular form of investing and as a sophisticated investor ( and you need to say you are one of those to get involved in most of these syndicates) you can get access directly into projects that you cant get into as a normal rule.
you evaluate the same as if you are buying yourself just the numbers are larger.
Yep, I like it. Just need to meet the 'sophisticated investor' criteria first by income or net worth, then I will certainly look into these investments.

GSJ

[yadreamin]

WOW
Today l finally had the time to read through and take in this great thread . Well done to those for getting it off the ground and for those informative posts to date. Thankyou.
I would like to put a question up regarding the CP syndicates. Like it has already been said the numbers are a bit more manageable for those just thinking of starting in CP. I also think it would be a good way to learn how the nuts and bolts of CP works without signing away millions:eek:
So could we have a bit of a brief run down of how one of these syndicates starts, selects CP, and operates.
Pros and Cons of this avenue of CP investing
cheers yadreamin

[grossreal]

hi all
to start the term sophisticated investors is a very grey line reason being if you consider yourself to be a sophisticated investor then you can climb that wall it is an area that I don't think has been tested as far as I have seen because no body has need to test it.
how are people selected is relatively simple.
people on boards like this say I would like to invest in shopping centers and then some one says I am investing in balarat shopping center and a group is organised it is that simple and the crude at this stage also real estate have alot of people that want to sydicate to buy a property in comm it is very common and most property that you are buying is from a small sydndicate group.
as you move up the investment arena you get emails saying we have this project are you interested ( again very crude but very effective)
and then you move to the groups that recruit for there syndicates usually a banks, macq etc or similar and they do it via their data base and the use of a listed trusts.
most small groups are groups of investors that get together and invest in a project very simple.
with regards the operation
a new company and trust is setup $3,000 the investing people or group buy a unit in the trust and the company buys the property
depending on the groups that are in the company decides the type of trust and the return is distributd depending on the split of the trust
as is the case with any company.
if the trust is a large enough and has over 5 mil in assets then you look at listing and that is a whole new ball game.
you then have these unlisted trust that are setup with the aim of turning into a listed trust (called a reit ) again this for me is very new and have not got one that has listed as yet. but understand the fundamentals and the process required and I am in one that is just going thru the motions at the moment and before nayone asks no sorry already full hence the reason for the other disclaimer post that I don't wish anything but generic information.

[JIT]

I also think it would be a good way to learn how the nuts and bolts of CP works without signing away millions
Yep, I agree. Seems a sensible way to get your feet wet.

I'm sure Chris Lang will also be able to add to grosssreal's comments here as I believe he is involved in syndication.

GSJ

[APerry]

I'm sure Chris Lang will also be able to add to grosssreal's comments here as I believe he is involved in syndication.

I think you'll find that Chris's syndicates and Gross's are very different. W working with Chrisith Chris's the syndicate members elect board members of a trustee company and manage the investment themselves, with Chris's assistance. Gross can correct me f I'm wrong but I think he would manage his. Each would be treated very differently by ASIC.

One of the most attractive things about Gardner & Lang syndcates is that the members gain a lot of hands on knowledge, as well as finanical gains, from working closely with Chris and his team.

Regards
Alistair

[Chris Lang]

Hi everyone :

Thanks for all the feedback on the answers I provided to GSJ's
10 Questions. A few of you raised several good issues relating
to Private Syndicates - on which I will come back to you with a
few thoughts.

However, I did mention to you a Case Study last week, which you
may find both interesting and useful in what you're doing. So,
let's take a look at it.

It was a rather plain-looking Property

Some of you might know the Gordon & Gotch building in Highbury
Road, Burwood (Melbourne). Built in the 1970's … it comprised a
3-level office building, attached to a 2-level warehouse behind.
As well as a parcel vacant land at the rear.

Because of the slope on the site, each warehouse was
effectively on ground level. And a ramp (to the roof of the top
warehouse) provided parking for some 220 cars.

The views across the valley from this roof-top car park were
quite stunning.

Negotiating the Deal

The Vendors had it on the market in early 2002 for $8.6million.
After much to-ing and fro-ing, we reached agreement to buy
it for our clients at $7.75 million; with a 21-day due diligence
period.

During the due diligence, we discovered a physical impediment
that would not affect the integrity of the building structure …
but could cost $500,000 to $600,000 to rectify. And we also
found out that it had caused an earlier sale to fall through.

Anyway, as a result of this, we managed to re-negotiate the
Contract price down to $7.24 million - showing a net passing
yield of around 8.7% pa.

The Investment Strategy

The Gordon & Gotch lease over about 67% of the building, ran
through to 2010. And two other solid tenants, also had long
leases.

So, the initial strategy was to develop and sell-off the rear
land - releasing around $2 million in equity. Doing that would
then raise the 8.4% initial yield, up over 12% pa.

After settlement, we spent about 6 months re-negotiating two of
the leases to allow our clients early access; plus we explored
several ways to develop the vacant land.

However, to calve of the rear land would require the creation
of a Body Corporate. And that could ultimately constrain the
redevelopment of the current existing buildings at some future
date.

Therefore, we recommended our clients create a long-term Master
Plan for the entire property. After discussion with a leading
Architect, the Council was approached about granting a permit to
refurbish and extend the existing buildings; plus develop a
series of new industrial and office buildings, on the vacant
rear land.

The Council's initial stance was that the existing buildings
were too old, ugly and ought to be demolished. Finally, after
much persuasion, the Planning Officers agreed for the Architect
to return with some concept plans of what we had in mind.

They seemed rather "blown away" with what was presented. So
much so, that a Permit was issued in about 9 months - something
that generally takes 15 to 18 months to obtain.

Scope of the Final Permit

The overall re-development would involve:

Subdividing the 3-level building into smaller strata-titled
offices;
Relocating the cars (on the roof) into a 2-level car park in
the lower warehouse;
Adding a further level to the upper warehouse, to create 4
conventional office buildings with views over the Valley;
Developing a series of factorettes and mews-style offices
on the rear land.


What started out as a modest $3 million building project for
the rear land … had now escalated into a $45 million+ major
re-development project.

Being close to Monash University, the Council just loved the
wide mix of uses - including "incubator" style accommodation for
new start-up businesses. As such, the project was named the
"Matrix@Burwood".

What Was The Best Step Forward From Here?

The syndicate of 11 members were not developers - they were
probably better described (affectionately) as "wealthy amateurs".

Clearly, they had their hearts set on a longer-term involvement
with the property. So it took the Architect and me about 6
months to convince them (in mid-2004) of what we saw as their
most profitable strategy.

That being: To sell the property with the Permit in place; and
solid leases running until 2010. But with negotiated access for
re-development, with six months notice after June 2005.

The challenge was how to Market what was merely a "Concept"

In physical appearance, the property hadn't changed since its
purchase in 2002. However, we had secured a rather exciting
Permit.

To give substance to the Concept, we obtained an independent
Market analysis; plus a formal Valuation. But, equally
important, we had to provide buyers with simplified plans; plus
colour perspectives of what the completed development would look
like.

A Traditional Marketing approach uses extensive daily media;
glossy Property Reports and Brochures; plus generic appearances
on Property portals.

Our "Stealth Marketing" uses modest daily media; a
comprehensive website; plus an extensive (personalized) email
campaign - both to 39 targeted builder/developers, as well as
our 5,000+ database.

Let's Look at the Outcome

The success of the final outcome revolved around a complete
change of focus.

Traditional Marketing focuses upon drawing buyer responses from
the daily media.

Stealth Marketing focuses upon delivering all the relevant
information directly to the Buyers' desktop (on day-one), via
the dedicated website. But the real plus is that we can track
every response - both by their source, and for easy follow-up.

My apologies for all this detailed background. But I think it
was needed for you to fully grasp how the final selling price of
$12.3 million at the end of 2004 was orchestrated. And, as you
can appreciate, our clients felt the $4.9 million increase, in
just 2.5 years … was a great outcome.

You may care to take a look at the Matrix@Burwood (http://matrix-at-burwood.com/index.php) website -so
you can understand just how the development concept was packaged
up, and sold as a "totally new" product to the marketplace.

When You Look At The Website

Because of the confidential information on the website, you
first need to register as the site is password protected.
(That gave us each prospect's contact details to follow up).

Then, while you read the "Executive Summary" on the home page,
you will be emailed your actual password. Once you receive your
password, you can proceed on to the full website.

You'll see there is a fair amount of information including ...
the contracts and a valuation, along with other reports; plus
copies of plans & perspectives of the proposed redevelopment.
(Make sure you click the three "pink dots" P1, P2 & P3 on the
landscape plan -- to view the various perspectives of how the
development concept would look.)

In fact, you'll see there is even provision for Buyers to email
to their consultants -- directing them to specific information
on the website, for which they require advice.

If you sit back and think about what this Case Study covers …
you'll realise that it involved 6 or 7 key elements for you to
successfully acquire commercial property.

More and more clients have been asking me to flesh these out in
further detail - which is what prompted the February Workshop (http://his-best.biz/2007/1/11/the-property-workshop-on-saturday-24-february-2007).

Anyway, have a look through the Matrix website (http://matrix-at-burwood.com/index.php), and give me
your thoughts on how you felt it came together.

All the best ... Chris Lang

[JIT]

Hi Chris,

That's a great example you've given us.

So my summary from this is that you/your clients had negotiated/acquired an older style, mixed-use commercial property (with offices + warehouses + vacant land), that was conveniently located, leased to solid tenants on long leases, and had significant development potential.

The property was purchased in 2002 at a price discounted for the cost of a 'physical impediment' (that didn't affect the structural integrity of the building) - which was discovered during the initial due diligence period.

11 syndicate members split the initial purchase price of $7.24 million - so approximately $658k investment per syndicate member in cash/equity - with an initial passing yield of 8.4%.

Rather than the syndicate doing the >$45 million development themselves - which would be difficult to say the least for 'wealthy amateurs' - you had simply obtained a development approval/permit from the council, then effectively 'stealth marketed' this to potential buyers (builders/developers), and on-sold the property with the permits in place for a significant profit - $4.9 million in 2.5 years, between 11 syndicate members is approximately $445k per syndicate member.

Furthermore, you had already negotiated access with the existing tenants for when the development was to occur, making the offer even more attractive to potential buyers.

Also, if the council had refused to give the permits, or if the syndicate members were not agreeable to this strategy - it would appear that with this particular property there would have been several other options still available to help maximise the syndicates return on investment - such as the initial plan to simply develop/sell the vacant land to increase the yield to >12% pa.

Clearly it is not as simple as it sounds, and required a lot of negotiating, time and expertise from your team in the background. However, for the syndicate members themselves the whole process seems relatively straightforward and without too much hassle. They are still involved in the process and have control over key decisions, but the rest of the hard, nitty gritty stuff, is handled by someone else with more experience - and at the end of it all the syndicate members pocket a handsome profit. A bit like the 'armchair developer' idea that Michael Yardney describes with Metropole's residential developments.

I will also have a look at the website soon and comment further.

Thanks,

GSJ

[JIT]

Hi,

Just had a quick look at the Matrix Burwood website.

Very easy to use and functional, and A LOT of information!

I think I will need more time to read it fully! - the detail here is perfect for anyone who has not seen this stuff for commercial properties before (ie. contracts of sale, leases etc...), and would be a GREAT EDUCATION TOOL, definitely worth looking at.

Of note, the property was valued at $11.2 million, before taking into account the DA/permits - but purchased at just $7.24 million - not sure how there was such an increase in value here, ?bought at a huge discount, ?improvements, ?capital growth - might have to read the valuation report for more info. when I get a chance...

GSJ

[silas]

Thanks Chris for all the information. Just a question on the nett passing yeild. If the net rent is 1,065,983 PA (from web site) and the cost was $7.24M (from the post) how do you arrive at a nett passing yeild of 8.7%. Its possible that I don't understand the term. I would have anticipated that it would have been 1,065,983/7,200,000 x 100 equalling 14.8%

Silas

[Chris Lang]

[QUOTE=silas;267139]Thanks Chris for all the information. Just a question on the nett passing yeild. If the net rent is 1,065,983 PA (from web site) and the cost was $7.24M (from the post) how do you arrive at a nett passing yeild of 8.7%. Its possible that I don't understand the term. I would have anticipated that it would have been 1,065,983/7,200,000 x 100 equalling 14.8%

Hi Silas :

Your calculation is correct -- but you have simply used the
wrong figures.

The net rental of $1,065,983 pa is at the time of Sale, NOT
when it was purchased 2.5 years earlier. Also, we'd increased
the net rental through renegotiating some of the leases; as
well as trimming the building outgoings.

So, at the time of selling ... the calculation ought be:
$1,065,983/12,300,000 x 100 = 8.7% ... which, given the age of
the building, was a rather low yield -- but was underpinned by
the permit.

Hopefully, that makes it a little clearer.

Regards ... Chris Lang

[silas]

Thanks Chris that makes a lot of sense. Appreciate the response

Silas

[JIT]

Also, we'd increased
the net rental through renegotiating some of the leases; as
well as trimming the building outgoings.
Hi Chris,

Would this increase in rentals/change in leases and decrease in outgoings, be the main reason for the $11.2 million valuation (increased from $7.24 million on purchase), prior to the DA/permit being taken into account?

Thanks,

GSJ

[Chris Lang]

Hi everyone :

I noticed a few of you picked-up on the topic of Private
Syndicates, and raised several issues.

Perhaps a few points of clarification might be helpful.

ASIC's requirements

grossreal is quite correct in saying there being a limit of "no
more than $2 million" able to be raised by way of equity AND "no
more than 20 people" being involved in each Syndicate.
Otherwise, as a "promoter", you need to go the expensive path of
preparing a Product Disclosure Statement (PDS).

Therefore, so that everyone is quite clear : I am NOT a
"promoter" of Syndicates.

All I do is receive indications from my clients (new and old)
of their desire to join up with other clients; and then, simply
introduce them to an experienced solicitor (Home Wilkinson &
Lowry) who will help them form themselves into a Unit Trust.
And you don't have to be a "sophisticated investor" to join a
Private Syndicate.

Once the Syndicate is Formed

From here, Gardner+Lang acts (purely in an advisory role) to
help that Unit Trust acquire a suitable property - for which
Gardner+Lang receives an acquisition fee of generally between
1.25% to 1.5% of the contract price.

On the way through, the Unit Trust pays the usual property
management fee of 3% of the normal tenancy payments for looking
after the property itself.

There is no profit share, no bonus, nor any "kicker" at the
end. At the point of selling, the Unit Trust simply pays the
normal agency selling costs.

Each month, all rentals are sent to an experienced accountant
(Williams & Partners) who … lodges your BAS returns; makes
quarterly distributions to all Unit holders; and prepares year-
end tax returns for the Trust -- for which only normal
accounting fees are charged.

Public Vs Private Syndicates

To summarise … Private Syndicates:


Have no promoter (as Public Syndicates do).
Incur no entrepreneurial fees, or PDS expenses.
Attract no more costs, than if you were to acquire the
property yourself.

Unlike Public Syndicates (which secure the property first, and
then attract investors into an established Unit Trust) … Private
Syndicates form a Unit Trust only when the investors choose to
do so. Not until the Trust is actually formed, do the members
seek out a property and decide upon its purchase.

If you need some more Details …

Over the past 17 years, we have been able to discover most of
what has (and hasn't) worked for our various clients. And that
has been put together in a simple eBook, which you can download (http://www.gal.com.au/index.php?option=com_remository&Itemid=145&func=selectcat&cat=1)
free from our website.

For more information, you might also like to read through some
of the Syndicate FAQs (http://www.gal.com.au/Syndication/Syndicate-FAQs.html), which have arisen over the years.

Hopefully, that helps to fill in a few gaps. Because, for the
smaller investor (as a member of a private syndicate), it allows
you to play a role in the purchase of a much larger property --
without having to carry all the responsibility by yourself.

And obviously the Property, Legal and Accounting advisors are
there to help you, all the way along.

Anyway, let's know if you need any further guidance in going
down the path of Syndication.

All the best ... Chris Lang

[Chris Lang]

Hi Chris,

Would this increase in rentals/change in leases and decrease in outgoings, be the main reason for the $11.2 million valuation (increased from $7.24 million on purchase), prior to the DA/permit being taken into account?

Thanks,

GSJ

Hi GSJ :

That's correct. But that doesn't reveal the full story.

You need to fully understand the psychology of "making public"
the Valuation on the website -- when we had advised our clients
the property was now worth considerably more than that.

You see, no valuer is prepared to attribute the full value of a
Permit -- because it would involve making detailed (and possibly
"dangerous") assumptions as to building costs, to arrive at a
potential profit. Therefore, we insisted that the valuer made
clear that the Permit had not been taken into account.

However, it was important for the buying public to have a
respected and independent assessment of current value -- given
that the property was essentially unchanged in appearance, since
its purchase.

So, what we were effectively saying to the buyers was ... "How
much more than $11.2 million are you prepare to pay?"

Therefore, it now came down to a $1.1 million decision, rather
than a $12.3 million decision. And, naturally, people find that
a lot easier to make!

You've got to think of a "Negotiation" as a game. A VERY
serious game … but, nonetheless, it's a game.

All the best ... Chris

[JIT]

Hi Chris,

Thanks that makes sense.

Also, in my previous calculations I did not take into account leverage!

So, for a purchase price of $7.24 million split between 11 syndicate members, that is $658k per syndicate member.

But, if finance was arranged for the purchase at say 70% LVR, the initial cash/equity input for the syndicate/Unit Trust would be $2.172 million (30% of purchase price) - or just $197k for each of 11 syndicate members - to be involved in >$7 million dollar deal - is this correct?

This 197k is like buying a 1-bed apartment in Melbourne!

The key difference I believe, and perhaps a disadvantage of syndicated investments, is that if the syndicated property increases in value, the members cannot individually borrow against that increase in value - and get say a 'line of credit' - as they perhaps could if an apartment purchased individually had increased in value.

I believe this aspect makes them more suitable to a SMSF.

Is this understanding correct?

Thanks,

GSJ

[Chris Lang]

Hi GSJ :

The members actually borrowed a little more - but your numbers
are close enough.

Interestingly, the Syndicate members all used their personal
Super Funds for the Investment. (SFs can invest into a "vehicle"
that borrows - provided no one SF has majority control of that
vehicle).

If you read the eBook (http://www.gal.com.au/index.php?option=com_remository&Itemid=145&func=selectcat&cat=1), you'll see that the Trust Deed (which
HWL have developed for clients over the years) contains a
mandatory 4-year review of the property by members.

That was principally to provide an "exit mechanism" for those
wishing to depart earlier than planned. But that review would
also allow the Syndicate to re-finance, and then look to
purchase a further property.

So, it would work for both individuals and SFs.

Chris Lang

[JIT]

Interestingly, the Syndicate members all used their personal
Super Funds for the Investment...But that review would
also allow the Syndicate to re-finance, and then look to
purchase a further property.

So, it would work for both individuals and SFs.

Chris Lang
Thanks Chris,

So re-financing is possible at the review date, for expansion of the syndicates portfolio - if other syndicate members are in agreement, which is good as you ('individually' or your SMSF) won't necessarily lose that ability to leverage into other investments that is a great advantage of investing in real estate.

Overall, a very attractive investment vehicle.

GSJ

[Chris Lang]

Hi everyone :

I'm not sure if any of you are a mad keen cricket fan? But
if you are … I've just made a posting on my blog (http://his-best.biz/2007/2/1/would-you-treasure-a-piece-of-ashes-history), which might
interest you.

It's about a fascinating piece of Ashes' history I came across.

Anyway, go Aussies this weekend!

Regards … Chris

[grossreal]

hi chris
thanks for that explanation with regards to your involvement in this field and I wish you well as it seems your system works very well I am very similar but I take an active part in the project not manage it ( but am looking at that with the current project) as you a step back from investing directly you can say a bit more then myself but from what you have posted is correct.
I will read with interest wht people have to say with regards this post as there is alot of very godd information in it.

[JIT]

Hi Chris,

Just a couple more questions re. Matrix Burwood:

(1) How did you work out the initial valuation of $7.75 million for the property? - (ie. before the due diligence findings)?

Using comparable sales, or some other method or combination of methods?

How did you explain to the 'wealthy amateurs' why you felt the property was worth this much? - given that some of them may not have had any experience with valuing commercial property before, and would want to be careful that the syndicate and therefore themselves were not overpaying for the property, especially given the substantial size of their individual investments in the syndicate?

I'm sure some of them may have just trusted your judgement, but there must have been others who wanted a more detailed explanation.

Is it possible to illustrate this in a simplified manner using figures of relevant comparable sales - or however you worked it out?

Valuing residential property is easy enough, and most here on the forum would be able to do so to an extent using some recent comparable sales.

Is it much more complicated with commercial property? Obviously the lease itself plays a significant part in the valuation here.

(2) How did you assess the development potential of the property prior to making the initial offer of $7.75 million?

Did you do some formal analyis prior/'feasability study'? - like the CKC market analysis, which I believe was done prior to sale.

Or was it based on your experience?

Apart from the development of the vacant land, did you make the offer thinking that you may also be able to re-develop the existing buildings?

Obviously you were able to in the end, but you mention that council initially felt the building should be demolished.

Thanks,

GSJ

[Chris Lang]

Hi GSJ:

Apologies for not coming back to you on your further queries
before now.

1. The purchase price of $7.75 million.

Yours is a simple question -- but the answer is somewhat more
complex.

It simply came down to establishing an underlying figure for
the property -- based upon a comparison of yields and $/psm of
net lettable area (NLA), for sales of similar properties. And
these may not have necessarily been within the immediately
surrounding area.

Hardly any sales would have had developable spare land --
certainly not to the same extent as this property. Therefore,
in the end, it comes down to experience in making the final
analysis.

2. Assessing the development potential.

Initially, we based the additional price paid upon developing
townhouses on the vacant land -- because of the direct access to
a road on the rear boundary.

That would have been a quicker and easier way to release the
value tied up in the vacant land. But, the Council insisted
the property retain its commercial use.

Hence the permit obtained.

3. The existing buildings.

We immediately saw the added potential of reconfiguring the
existing structure. However, the extent and final layout would
depend upon our success in re-negotiating a couple of the leases
-- to allow for early re-development.

Mentioning the Council's initial lack of vision was not
intended as a criticism. In today's 'disposable world', most
people tend to find a clear slate easier to deal with.

With 15,000m2 of very solid buildings already onsite, it seemed
a waste of time and money to simply demolish and rebuild them --
albeit "as new". This may not always work; but you need to be
open to the possibility -- because it's a far less risky path to
tread.

Hopefully, this covers what you were after.

Regards ... Chris

[JIT]

Hi Chris,

Thanks for the reply, and all your informative posts on this very interesting thread on commercial property education.

If anyone else has any questions/comments relevant to this thread, please post away...

GSJ

[pete_w]

hello

just another 'hasnt been mentioned yet' resource. A FINSIA course has a subject on commercial property investing http://www.finsia.edu.au/Education/Courses/CoursesOffered/GDAFI/Outline/E133 and the notes for that subject would probably be of interest to people here, beacuse they are a) australia specific b) mostly up to date and c) fairly indepth (i.e. the cover DCF and other types of valuations). i have completed this unit and i found it very useful.

now, strictly speaking you need an undergrad degree to enrol in this course. however, you can enrol before providing proof of your undergrad degree. so, if you were interested in obtaining the notes, you could enrol and pay for the unit E133, the notes will be sent to you, and then you can withdraw your enrollment. i think they might even just sell the notes for about $400 i think, you can always call and find out.

[JIT]

Thanks for the feedback on this course petew, from the website, it seems pretty comprehensive and relevant.

GSJ

[JIT]

Hi,

Just curious if anyone went to Chris Lang's Seminar - I think it was scheduled for yesterday, and if so what sort of feedback can you give on it?

Thanks,

GSJ

[silas]

Hi GSJ

Yes I went along and found it helpful mostly it was an expansion of his book and at the end in the question time talked about syndicates and the state of the market. Chris was taking a video of it which I think will be available in March or April.

Silas

[JIT]

Thanks Silas,

I might try and get the video copy if it is released, as I could not make it to the seminar.

GSJ

[Chris Lang]

Hi GJS :

It's a pity you couldn't make to the Workshop -- because the
response to it was rather good.

Yes, we did tape it; and it is now being edited. As soon as
I have finalized the the actual cost (which should be this
week) ... I'll notify you on this forum, of the posting on my
blog.

All the best ... Chris Lang

[JIT]

Thanks Chris, I will get a copy when it is done.

GSJ

[Chris Lang]

Hi GJS :

As I mentioned yesterday, it was a pity you couldn't have been
at the Workshop on 24 February -- because we had a select group
of 36 investors.

If you have read my latest Book, you could look upon that as
being the "Graduate" course ... whereas, the Workshop was
probably pitched at the "Honours" level. And it turned out to
be quite an in-depth look at the inner workings of Commercial
Property investment.

Anyway, instead of having to pay the $175 registration fee to
attend ... you can now obtain a complete set (http://his-best.biz/2007/3/5/if-you-missed-the-property-workshop-%E2%80%A6) of 3 DVDs covering
the entire day's presentation -- and also read some of the
comments of those who attended.

All the best ... Chris Lang

[JIT]

Thanks Chris,

Also, just wondering if anyone knows if Michael Yardney was still planning to do a Commercial Property Seminar?

GSJ

[Michael Yardney]

Thanks Chris,

Also, just wondering if anyone knows if Michael Yardney was still planning to do a Commercial Property Seminar?

GSJ

I am defiantely going to do it, but with so much going on in my life at present, I have to delay this til the second half of the year - I have been flat out doing my current round of seminars and preparing for Wealth Retreat (http://www.wealthretreat.com.au)

[JIT]

Thanks Michael, keep us posted.

GSJ

[jopie]

ATTN: Chris Lang

Hey there mate,

I have tried a couple of times last week and once again today to buy the DVD set online but it has not accepted my payment on any occasion...

Can you take a credit card payment over the phone instead? or any other suggestions?

Cheers

Jacob

[JIT]

Hi everyone,

Just wondering if there was anyone here who ever attended this Dolf de Roos course, 'Master the art of Commercial Property Investing', $5000 per person over three days? I don't think it is still being held.

Here's the link:

http://www.commercialrealestateinaustralia.com/

Also, here's a few good books on commercial property investing you could get from Amazon.com, which I don't think I mentioned before (but they are US and UK books):

(1) Commercial Real Estate Investing - 12 Easy Steps to Getting Started, by Jack Cummings

(2) Pure Profits - Pinpoint Winning Properties, Think Like and Investor, and Succeed in Commercial Real Estate, by Al Auger

(3) The Commercial Lease Guidebook - Learn How to Win rgw Leasing Game, by Thomas G. Mitchell

(4) Negotiating Commercial Real Estate Leases, by Martin L. Zankel

(5) The Economics of Commercial Property Markets, by Michael Ball et. al.

GSJ

[Jen]

I received Chris Lang's DVD's last week, so they are available. Haven't watched them yet but...BUSTING to. Need a quiet moment without three billy goats in my lounge

[JIT]

Hi Jen,

Post some feedback on the DVD's here when you're done.

Thanks,

GSJ

[JIT]

Here's a few more commercial property education links:

This link is for a book about CP investing written for New Zealanders:

http://www.empowereducation.com/generic.bz?connect=true&key=commreig

This South African site lists articles on CP education:

http://www.eprop.co.za/news/category.aspx?idCategory=354&idSubCategory=108

A UK CP resource:

http://www.propertymall.com/

A guide to CP investing written for UK financial advisors:

http://www.ipf.org.uk/resources/pdf/education/IPF_IFA%20REPORT.Web%20version.pdf

A US online commercial real estate magazine:

http://www.ciremagazine.com/

Here's a CP investing seminar in Sydney, which I missed:

http://www.piaa.asn.au/index.php/events/Investing_in_Commercial_Property_-_Course

A US site with a free online CP investment course:

http://www.commercial-investments.com/

A UK powerpoint presentation on CP investment:

http://www.landlordzone.co.uk/commercial/comprop.htm

GSJ

[JIT]

And...the "The Property Market Monitor July 2006" report compiled by BIS Shrapnel for LJ Hooker, which comments on the commercial property sector:

http://www.piaa.asn.au/rated/quattro_on_daydream/MarketReport.pdf

GSJ

[Jen]

Re- Chris Lang's DVDs.

Although I have only had time to watch one of these DVD's, I thought I could post with my early opinion rather than wait the age it may take me to watch all three DVDs. At least it might help someone a bit earlier.
There are 5 hours of viewing and the contents of the 3 DVDs are as follow:

1: How to identify & shortlist the right properties.
A quick way to access,analyse & compare
Pre-valuing your aquisition for comfort.

2. Negotiating the deal to your advantage
Validating your purchase
How to best lock in your finance

3. Setting up your ongoing tax benefits
Enhance & maintain your profit
An insight into truly effective marketing

After watching the first DVD, I think that if the other two are similar, then this is a valuable asset to your collection if you are learning about commercial RE.
Chris goes through the process he follows to buy this type of RE and although, as he indicates himself, there are advantages he has of experience & contacts, this seminar still gives you an excellent insight into the procedures, potential pitfalls and unique terminology of commercial RE...and we all have to start somewhere.

He also said that at the very least, you should gain enough knowledge to be able to ask the right questions.

One thing I noticed was that a couple of questions are asked which I couldn't hear and weren't repeated, so that side of things were lost but it didn't really detract from the presentation.

I'm pleased I bought the DVD's as I think I will learn a lot and would recommend them to others. I will post again when I have finished the other 2 - unless someone beats me to it ...but in the meantime, I hope this helps.
Cheers,
Jen

[JIT]

Thanks for that feedback Jen,

Sounds like a good resource and certainly looks like it goes into more depth then Chris Lang's book.

GSJ

[Dazzling]

GSJ,

An amazing array of useful links and data collection points in this thread....the object of the thread, so well done.

Now, how are you travelling with actually purchasing something ??

[JIT]

Hi Dazzling,

Well, my personal situation, specifically - job, income, time and objectives - have changed considerably very recently, so at present although I am still actively investing, I am not buying direct commercial property; but, if I do decide to in the future I think I've done or created enough background reading from this thread, to just get on with it! Will certainly post my experiences here if and when it eventuates...

And yes, the objective of the thread was to provide a resource for others who are considering CP investment, so I think that has been achieved.

Thanks,

GSJ

[Grego]

Chris what is the downside/risks involved in these private trust/syndicates?

Great post thanks to all contributors

Greg

[JIT]

Thanks Les and all Moderators. Putting a sticky on this thread should make sure it doesn't get lost on the back pages and can continue to be used and developed as a resource for others interested in learning about commercial property investing. At the moment I can't think of any more resources to add to this thread, but if anyone else has more ideas, please post away!

GSJ

[JIT]

Just another new book that's worth reading and for the Australian market:

"Good Commercial Sense: The Complete Guide to Investing in Commercial Property" by Karina Barrymore

GSJ

[markp]

Just another new book that's worth reading and for the Australian market:

"Good Commercial Sense: The Complete Guide to Investing in Commercial Property" by Karina Barrymore

GSJ

Another commercial property specialist journalist and another woman?

[JIT]

Almost anyone can write a book these days. Karina Barrymore has just 2 residential properties and 1 suburban office building. It's a pretty simple book but gives a good overall introduction into commercial property investing.

GSJ

[markp]

Almost anyone can write a book these days. Karina Barrymore has just 2 residential properties and 1 suburban office building. It's a pretty simple book but gives a good overall introduction into commercial property investing.

GSJ

Neither property category fits the "Good Commercial Sense: The Complete Guide to Investing in Commercial Property" title of her book. What could you possibly learn from such a book?

[JIT]

I already said this...

It's a pretty simple book but gives a good overall introduction into commercial property investing.

GSJ

[markp]

I already said this...

So you did,the old adage if you can't do it then you teach it hardly applies to giving financial advice.
No doubt this woman is on the seminar trail and will be coming to a conference room near you soon. Good Luck!

cheers

[sailor]

Just wondering...those who have smaller commercial IP's...say under $1mill...do you use a PM or do you self-manage? What are the pros and cons please? Does have industrial, office or retail make a difference?

[Miss V]

Thanks everyone for this great post.

I am negotiating my first commercial investment (very early stages) and need all the information I can get to do any due diligence.

For someone who has no experience in commercial, this thread has been a godsend.

Thank you Chris especially, I have downloaded all your links and subscribed to your site. I look forward to wading through all the information you have provided.

Also thank you everyone who took the time to list all books and resources.

Cheers

V

[JIT]

Just to add to the list, here's mortgageman's post linking to Chris Lang's new site and service.

http://www.somersoft.com/forums/showthread.php?p=316125#post316125

GSJ

[JIT]

Just had another look at Chris Lang's website, which has now been updated, looks pretty good:

http://lab.his-best.biz/

GSJ

[grossreal]

hi all
I agree that this thread is a very handy thread for people to get an understanding of commercial property
I am in the middle of doing a commercial purchase at the moment got two out of three vendors as of today and I am a bit like dazzling in that I don't like to post details until the inks dry and even then not sure at this stage.

with regards to the problems for syndicates
the main one for me is that the more people the harder to control.
things change in life and so do people views
and unless you have set up the rules from the start the wheels can come off the wagon very quickly.
this is a very hard learning curve and can setback your project very considerably.
if for instance you have a syndicate with a buy and hold stratergy and suddenly over 51% decide that the project is to be sold
you are in big problems and if there is 9 groups this can very easily happen
so you need to have safeguards in place to avoid this type of problem.
the other problem is in fighting between groups especially if the group is a form of fund and is active investing
again this is people management more then investment managing.
you have to have
set aims for the group.
set exit procedure.
set time frame for the syndicate.
set percentage of profit or return.
the above information is with regards to private unlisted trusts that are setup as syndicates and not listed property trusts.
they are a very different thing and I don't invest in them.
generally you are looking at about a 6.5% return on commercial sydney so for those out looking if the return is higher then this
then thats something to have a close eye on this is just an observation number and is not a rule thats current from the auctions at 55 harrington st sydney ( where alot of the commercial auctions got thru)

[mortgageman]

For those who are interested, I believe Chris Lang is running another workshop shortly. I have experienced these workshops before and would strongly recommend them.

To register, go to //his-best.biz/2007/11/20/pw08/ss. I think seats are a bit limited so get in early!


Kind Regards,

Cameron Perry
Perry Financial Strategies
www.perryfinance.com

[Dazzling]

I have experienced these workshops before and would strongly recommend them.

Hi Cameron,

Did it motivate you enough to go out and buy a CIP afterwards ??

[mortgageman]

Hi Daz,

Its not about motivation, I have learnt some good negotiating techniques from Chris, but yes we have a couple of CIP's on the go. Happen to be over your side of the world actually.

Kind Regards,

Cameron Perry
Perry Financial Strategies
www.perryfinance.com

[Dazzling]

yes we have a couple of CIP's on the go. Happen to be over your side of the world actually.

...do tell....:)

[grossreal]

hi all
whats the price and does it tell you were the next movement within commercial property will be.
and which market is going to move next
I can use my crystal ball.
training is very handy and seminars are a good place to learn it depends if the cost out numbers the return.
at the moment except dazzlings little perth most of the eastern is comming off a very low rental increase and floor space ratio's so is a interesting market for all as the post I put up to get current floor space values for the cbd cities and you don't need a seminar to learn this.
but if people like to site down and have a coffee to learn good on them.
my .002

[APerry]

For those who are interested, the cost of Chris Lang's upcoming seminar (link below) is $1,100 or $797 for those who enrol before Christmas.

http://his-best.biz/info/early-bird/ss

Regards
Alistair

[DebtEquity]

Will Chris Lang come to Perth for his Commercial Property seminars? Us Perthites always seem to miss out on the good stuff!

So Chris get over here i am sure you will have a captive audience waiting for you!

:D

[Chris Lang]

Happy New Year to everyone.

And my apologies for not being a great contributor, during the
latter part of last year. Although, I've been keeping a passing
eye on the various postings. And I did appreciate the feedback
from people like ... JIT, mortgageman, The Y-man, Ruby and Pablo.

With the Commercial market being rather strong, it tends to
make my job in acting for Buyers all that more difficult.

Nonetheless, I did manage a few wins for clients ... but it has
been rather hectic.

Also, I have been getting things ready for the next Property
Workshop on Saturday 1 March.

And I couldn't help noticing DebtEquity's comments about holding
a Workshop in Perth. But you know what's interesting: Over 60%
of those who enrol seem to be coming from interstate -- and that
also includes places like Brisbane and Perth.

So, at this stage, it doesn't appear necessary to move outside of
Melbourne. Maybe, because they're held on a Saturday, people are
making a weekend of coming to the Workshops here.

Anyway, with almost everyone taking the week off before Christmas
I've decided to extend the "Early-Bird" registration till the end of
January.

Therefore, you can still take advantage of the discount price:
http://his-best.biz/info/early-bird/ss

Last year, there were a number of Somersoft members who joined
me there -- so I'll look forward to seeing a few more of you
along again on Saturday 1 March.

The other thing that I've been beavering away on is the new
Investor's LAB Website. And it's only in its beta stage at the
moment -- so it's certainly nowhere finished at the moment. But
I hope to be in a position to tell you more during February.

Otherwise, let's know if you have any specific queries at all on
Commercial Property -- and I'll do my best to answer them.

All the best ... Chris Lang

[JIT]

Hi Chris,

Nice to see you back again.

We've had some interesting discussions here recently.

I'd be interested to know what sort of impact the 'credit crunch'/'sub-prime' is having on the commercial property sector in the context of the recent news with Centro and their financing problems and the LPT sector, from your perspective...?

But also more specifically for investors at the direct commercial property level, ie. for those purchasing commercial property individually or via private or public property syndicates or un-listed direct property trusts...?

With the syndicates you are involved in, has there been any difficulting arranging initial finance or re-financing?

Or, is the media distorting the extent of the 'problems' in this market?

Regards,

JIT

[Chris Lang]

Hi JIT:

I can always count on you to come up with not just one question
but 4 or 5.

As I'll be tied up for the rest of the day, let me think about that
over night ... and I'll come back to you in the morning.

Regards ... Chris

[JIT]

Hi JIT:

I can always count on you to come up with not just one question
but 4 or 5.

As I'll be tied up for the rest of the day, let me think about that
over night ... and I'll come back to you in the morning.

Regards ... Chris

Yes, well, one has to seize the opportunity to pick your brains when they can!

I'm particularly interested in what's happening at the syndicate level with those relatively less costly properties eg. $1MM-$10MM range, that individual investors can get a piece of by pooling resources.

Dazzling also described his recent purchase in a thread here and the extensive difficulties he had with banks and financing it.

Look forward to the reply.

[Chris Lang]

Hi JIT:

Sorry -- but it was a hectic morning ... and I wanted to try
and address your queries as best I could in the time I had.

The situation Centro find themselves in ought not spread any
wider; and is basically self-inflicted.

Put simply, it looks as though they got their equity raising
and debt activities out of sinc.

But, by any gauge, their underlying properties are all quality
assets. And yesterday's AFR (pages 38 & 48) included a fairly
well-credentialed list of possible overseas suitors.

On your wider questions about finance ...

These deserve a far more-detailed answer then this will
provide. I guess that's one of the benefits of being able to
spend an entire day with Investors at my Workshops - when you
can explore these types of issues more fully.

Unfortunately, I find the problems most Investors face tend
to stem from paying scant regard to their actual funding
requirements. I think you are already aware of my 9-Step
Investment Formula -- where two of those steps relate solely to
funding your deal.

STEP 3: "How to Sleep Soundly" ... shows you how to ensure the
banks will lend you what you need and expect -- based on the
contract price.

STEP 6: "How to Lock-in Your Loan Terms" ... covers a clever
technique, which helps to avoid any last-minute surprises.

After nearly 40 years, I've had the chance to examine hundreds
of deals; and get to understand the fundamental aspects of what
you'll need to succeed in Commercial property.

All I've done is break down and reassemble them into
9 simple Steps; and package them in a way that probably
challenges conventional logic.

Sure, I'm causing vendors and lenders to change their way of
doing business. And even some agents are complaining that I'm
divulging their "property secrets".

But, as I am acting for the Buyers ... that's not my concern!
And structured properly, you should be able to remain in control
of your funding needs.

Therefore, the short answer to your question is that none of my
clients have so far had any difficulty in arranging their funding.

Specifically on smaller, Private Syndicates ...

Late last year, I put together a purchase for a small private
syndicate at $3.575 million in Moorabbin. They were able to
arrange some non-recourse funding for that at 8.2% ... fixed for
4 years.

So, I think the media is distorting things a bit on the effect
of the sub-prime crisis.

But I have a greater concern

And that is with the effect rising interest rates will have on
the value of house prices. I am not really talking about the
much-publicized "trophy" homes. Rather those under $1 million.

For the unsuspecting Commercial investor, the flow-on effect
could be quite devastating. Because ... many investors have used
the equity in their family home as security for their Commercial
property investments.

Here's a link to where I've covered this in more detail:
http://his-best.biz/2007/06/26/family-finances-are-being-stretched/

One other thing to watch out for ...

It's not quite ready yet ... but I'm putting together a rather
crucial Video for my clients, on the real trouble spots around
Australia.

If you, or anyone else, are interested ... I could let you know
when its available -- and don't worry, it will be FREE.

I've quickly set up somewhere for you to leave your details --
that way, I can let you know as soon as it's ready ...
http://his-best.biz/warning-video/

Hope this helps to answer your questons.

All the best ... Chris

[JIT]

And that is with the effect rising interest rates will have on
the value of house prices. I am not really talking about the
much-publicized "trophy" homes. Rather those under $1 million.

For the unsuspecting Commercial investor, the flow-on effect
could be quite devastating. Because ... many investors have used
the equity in their family home as security for their Commercial
property investments.

That's a good point, if they can't refinance their residential properties appropriately, then this could affect their commercial investments too...and it could all fall over! :eek:

One other thing to watch out for ...

It's not quite ready yet ... but I'm putting together a rather
crucial Video for my clients, on the real trouble spots around
Australia.

If you, or anyone else, are interested ... I could let you know
when its available -- and don't worry, it will be FREE.

Ah, sounds good, I've signed up.

Thanks.

[sailor]

I tried leaving my details at http://his-best.biz/warning-video/ but it kept me going round and round in circles, repeating a request for my details!:(

[JIT]

I tried leaving my details at http://his-best.biz/warning-video/ but it kept me going round and round in circles, repeating a request for my details!:(

I think it probably went through, but it may asking for another person's details now :D...but I'm not sure?

[Caitte]

I tried leaving my details at http://his-best.biz/warning-video/ but it kept me going round and round in circles, repeating a request for my details!:(

Just joined Somersoft - but the same thing happened to me with the warning video. Then I saw the green writing above the box telling me that i'd left my details OK.

Have any of you been to Chris LAng's workshops? They sound good, but i just wanted some feedback form someone who'd attended.

Caitte

[Remas]

Like you Caitte, I've also just joined Somersoft and saw your query about Chris Lang's Proprerty Workshops.

Having been at the last one, I'd have to say you'll get a lot out of it - whether you're a pro, or really just starting out.

And thanks for the tip on the green wording, when registering for the Warning video - which sounds very interesting.

Remas

[Chris Lang]

Earlier in the month, I mentioned that I was preparing a video
about the several danger spots for commercial Investors around
Australia. And, frankly, I was over whelmed by the response it
has drawn.

http://his-best.biz/warning-video/

One of the items I'm waiting on is the year-end Office vacancy
data form the Property Council of Australia. And that doesn't
come out out till the 1st half of February.

So, as soon as I have that ... I'll then be in a position the
finalise things and get the video up on my website.

Meanwhile, using the link above, you can still leave your details
to be notified when the video is available -- and it's FREE.

ALSO, about the annual Property Workshop ...

That went onto "wait list" yesterday. And Caitte ... I noticed
you have not registered as yet. However, you can leave your
details there -- and I'm sure a spot will come up between now
and 1 March.

http://his-best.biz/wait-list/

By the way, I will still honour the "early-bird' rate for
everyone who wait-lists themselves BEFORE 31 January.

All the best ... Chris

[Caitte]

Hello Chris,

Thanks for the reminder.

I think I'm on the list to receive the Warning video.

And I have just put myself on the wait list for your Workshop on 1 March (fingers crossed)!

Thnaks again,

Caitte

[Remas]

Go Caitte.

If it's half as good as last year, you'll really get a lot out of it.

Hopefully, you'll get in OK -- I might have benefitted last year, from someone unable to co