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He claims that you can get there quicker by selling along the way - 3 steps forward, 2 steps back, so to speak. Average income, average properties.
[*]It's something like buy 3 in year 1, sell two in year 4 or something - not confirmed.
[*]70% below states median - 400-450k stuff, 4-5% rents, 6-8% growth.
The bit in bold is what I think the issue is with this strategy. Which is assuming 6-8% growth per year and selling 2 properties in year 4. Sure, you can achieve 6% growth per year but that is over long term, you have to look at entire property cycle 7-10years.
I could buy a property today which does nothing for 5 years and then jumps 15% and again another 16% the following year giving an effective 6% growth over 6 year period.
Also, I don't believe you can outperform buy and hold by buying and selling constantly and paying transactions costs unless you put in significant effort on your part thereby effectively trading your time for the extra money.
Cheers,
Oracle.
even though the plan is not for me I think it could work if instead of buying the crap he is selling you bought in hotspots that have high and quick growth and sell close to the peak, obviously hard to get it right every-time but i 100% believe it would be possible to get it right enough to make the plan work.
what you may do is the properties you intend to keep you buy in more blue chip established areas and the one's u intend to sell you buy in hotspot areas like gladstone, darwin, port hedland or wherever u think the best opportunities are at the time of purchase
Why not develop your own site??? Build 4 sell 3 keep 1. If done well the one you hold will be debt free or very close to it.
How much did you buy the block for? What is the building cost?Bought a house with a large block of land zoned high density in a growth area, building 2 townhouses at the back, total cost around $580k, end value of each new townhouse is $590k.
Yes, my thoughts exactly. That's what I am doing. Bought a house with a large block of land zoned high density in a growth area, building 2 townhouses at the back, total cost around $580k, end value of each new townhouse is $590k. Get a townhouse for free, with no requirement for capital growth. Beats these other ideas hands down.
even though the plan is not for me I think it could work if instead of buying the crap he is selling you bought in hotspots that have high and quick growth and sell close to the peak
RE agents would Love, Love, Love this strategy. Every sale a new commission.
I agree with Bigtone that this strategy will work if buying in Hotspot area at the start the cycle and sell near the peak. But I doubt it will work buying H&L package that Bill Zhend is recommending. One of the areas that he was recommending was Epping in VIC.
I have been to few of Bill's seminar. 3 years ago, he was presenting this strategy of buying few, keeping one and selling some to pay down PPOR debt and other debts. It looks good on paper but it's different in practice. I did a quick calculation in my head and I thought this is not for me because property doesn't grow 7-10% every year. What happens when the market is flat during 3-5 years.
I've also been to another of his seminar when he was recommending another strategy of capitalising the interest cost. I even had an one on one meeting with him about that strategy and thought it was too risky for me. This was 6-7 years ago.
Yes, my thoughts exactly. That's what I am doing. Bought a house with a large block of land zoned high density in a growth area, building 2 townhouses at the back, total cost around $580k, end value of each new townhouse is $590k. Get a townhouse for free, with no requirement for capital growth. Beats these other ideas hands down.
Yes - I am thinking along similar lines. Might have to go new builds still though if the entry costs screw the model.
.
why would u need to gp new builds.
i have found in most hotspots the lower priced properties had the quickest and highest growth
certainly happened in gladstone,darwin, tassie and many other spots