Every man has to have a shed

[Kenster]

40 or 50% p.a. business profits trumps 10% capital growth. That of course begs the next question.....what am I doing investing in this nonsense for and why don't I pump money into those businesses. Good question - my only answer is leverage.

Daz,

Apart from leverage, it's time and risk?

Time:
- To earn high returns, business people spends considerably more time IN it.
- Landlords may earn less but they are much less involved. They have more time for other activities, including scouting for new deals, therefore, increasing the effective return.
Oh, and lying around the Singaporean pool, too

Risk:
- Business return is dependent to many external factors, such as economy climate, competition, industry trends, price fluctuation, etc. Many of them are outside of business owners' control. The mammoth earning of all, goodwill, is hard to access or leverage upon. There are a number of approaches available but all have drawbacks, eg. Sale of business (once only), Partial sale (less control), Private capital partners, IPO (high cost & regulation complication). If business goes pear shaped then bankrupcy is the most likely outcome. Years of litigations may ensue, as well.
- Landlords risk is mainly in the lease. In worst case, landlord still owns the land. In best case, the land gets rezoned to retail commercial

 

[kingchevy]

Daz,

Apart from leverage, it's time and risk?

Time:
- To earn high returns, business people spends considerably more time IN it.
- Landlords may earn less but they are much less involved. They have more time for other activities, including scouting for new deals, therefore, increasing the effective return.
Oh, and lying around the Singaporean pool, too

Risk:
- Business return is dependent to many external factors, such as economy climate, competition, industry trends, price fluctuation, etc. Many of them are outside of business owners' control. The mammoth earning of all, goodwill, is hard to access or leverage upon. There are a number of approaches available but all have drawbacks, eg. Sale of business (once only), Partial sale (less control), Private capital partners, IPO (high cost & regulation complication). If business goes pear shaped then bankrupcy is the most likely outcome. Years of litigations may ensue, as well.
- Landlords risk is mainly in the lease. In worst case, landlord still owns the land. In best case, the land gets rezoned to retail commercial

So bloody true.

 

[Dazz]

Really fuzzy awful pictures of the decent sized box for those interested....sorry, my IT skills are shocking.

Still working through the clauses in the contract, but heading in the right direction.

 

[yo yo ma]

That's massive... "Decent sized" is an understatement. So much bigger than I pictured... appreciate the photo as it really gives a visual of what you are talking about
Steve

 

[steveadl]

Yeah....it's pretty big..... I guess...

Looks like a bus repairer or something? Hope the deals goes through ok Daz.

 

[eggnog]

thanks for that Daz. Its bloody huge

 

[sailor]

Daz...that's an awesome shed! I can only imagine the contract is likewise!

 

[Kenster]

Awesome, Daz.

The truck in the inside the shed photo looks small relatively to the size of the shed.

I feel priviledged to learn what you do. Thank you.

 

[sunshine]

The shed is big - yes, but the land is where it's at. Purchasing 8 acres of dirt less than 10km from the CBD is where all the value is at.

WOW Dazzling

I'm lovin the 8 acres of dirt ... with 7 acres of shed

Hope all falls into place for you to clinch this one.

Sunshine

 

[Mr. Fabulous]

I feel priviledged to learn what you do. Thank you.

Aye, I'll second that.

Mark

 

[Rixter]

I'm up in Singapore at the moment, on some poxy course for work, feeling a long way from the action. This is not good when you are a long way removed from the action

Well done Daz on the deal looks great for you.....but one thing puzzles me..with all your property achievements/success do date, wealth & net worth created along the way, you still work at something youre not happy with - how so

 

[Dazz]

...cos the Bank is very conservative and expects me to have a job. Won't lend to me without it.

Also, total portfolio income doesn't come close to my income from the job, so it's not as simple as giving up a 30Kp.a. job. Plus I've got enough losses built up such that I will get paid tax-free for the next 4 or 5 years...so the attraction of earning tax free money is hard to give up.

Give us 'til the end of the year, with this deal under our belts and I might pull the pin....who knows....no pressure from my side.

I suppose, like many workers, I've been doing a job in God foresaken places in dreadful conditions for so long I'm used to it. I don't do some fluffy-wuffy job in a holistic caring and sharing atmosphere. The main part of the job is the money. Everything else is well back on the priority side.

I know other folk who would never put up with something they don't like, but there's alot of folks who go to work for the money. I guess I'm just in the second group.

 

[tropic]

Hi Dazzling,

That is a missive shed!! Congrats.

Looking, can you share some tips with a beginner?
How and where do I start if I only want to spend up to 500K on commercial in Perth. Do you leave your name with certain agencies. Is there a website I should visit?

 

[duncan_m]

I thought it was a myth too until I sold one of my properties and the bank wanted to take ALL of the proceeds. Which they legally could. That come as a huge shock when I had other plans for the money. Sometimes life teaches like no theory ever can.

GoAnna, me too.. 4 months ago..

5 properties X-colled with the Commonwealth Bank.. sold one and they took ALL proceeds.. about $120K more than what was used to secure the debt originally. They held all the cards and wouldn't budge. It was a very rude shock and a massively treacherous act on their part after many years of loyal business.

I'll never cross collateralise again and I'll never bank with the Commonwealth again.

 

[Dazz]

How and where do I start if I only want to spend up to 500K on commercial in Perth. Do you leave your name with certain agencies. Is there a website I should visit?

Call, drive around, speak to real people and have your nose on the ground ready to pounce.....would be my suggestion.

Get a property investor's business card made up and get it out there in people's pockets.

I've had very little luck with the internet chasing down good buys. I wouldn't suggest this route, but whatever turns your crank handle I suppose.

 

[Dazz]

5 properties X-colled with the Commonwealth Bank.. sold one and they took ALL proceeds.. about $120K more than what was used to secure the debt originally. They held all the cards and wouldn't budge. It was a very rude shock and a massively treacherous act on their part of many years of loyal business.

I'll never cross collateralise again and I'll never bank with the Commonwealth again.

I suppose Duncan it is their money, so they set the rules when they extend it to you. It would be interesting to sit down and compare the EXACT wording of the CBA loan contract vs the EXACT wording of the lender you are using now, and see EXACTLY what difference there is....I suspect very little, cos they all play the same game.

I never understand when people are shocked about what happens when events transpire and Banks exercise their rights under the loan documentation......after all, as investors we sign them to get access to the funds in the first place. I suppose what is written down and what we "think" it means is the area you are addressing.

I've never been down this path yet, so yet to learn the harsh reality of what a Bank can do with their money....and how keen they are to get it back one day.

I've found the CBA to be my very best and closest investing partner over the years. Without their support, I'd probably own my average PPoR and maybe have one small IP. I owe them big time. I also know I'm very much in the minority on this forum when it comes to appreciating the Banks support.

 

[steveadl]

I've found the CBA to be my very best and closest investing partner over the years. Without their support, I'd probably own my average PPoR and maybe have one small IP. I owe them big time. I also know I'm very much in the minority on this forum when it comes to appreciating the Banks support.

I agree with that Daz, without the bank, I could'nt have any of my properties. We pay for it, but you know what you're getting yourself into if you read the documents properly. I'd be in the same situation if I tried to sell of one IP and keep the cash, but it's still a whole lot better than if they didn't give me any money in the first place. (Mental note: One day get around to getting a few IP's that are'nt x-coll'd )

 

[kathryn d]

well guess who's husband wants a shed???!!!

 

[LynnH]

Yeah, mine too, Kathryn! Then he would want all the bl@@dy do-dads to fill it - that's the really scary bit!

Cheers
LynnH

 

[tropic]

Call, drive around, speak to real people and have your nose on the ground ready to pounce.....would be my suggestion.

Get a property investor's business card made up and get it out there in people's pockets.

I've had very little luck with the internet chasing down good buys. I wouldn't suggest this route, but whatever turns your crank handle I suppose.

Dazzling,
All my research is done on the net, that's probaly why I never see a good one. Never thought about property investor's business card, i'll have to make one up.
Do you always surround yourself with investor, brokers, real estate agents? Do you socialise with them?
I like to own a smaller size "shed" one day. I am also interested in retail property but so far they all have yield less than 5%. Obviously I am not looking in the right places.