Has anybody use their services

[sanjayag]

Hi,

Has any body use the services of CW Financial Group. It is a Melbourne based company. They told my friend that if he is having an equity of minimum $110,000 in their PPOR, they can do wonders for him.....like they will make a $1.3m property portfolio for him and in 10 yrs he will have that costed to $2.6m or more. Also they will make my friend's tax liability to almost zero by buying the high depreciating new properties.

Any feedback from forumites is appreciated.

Thanks
Sanjay

 

[josko]

hi sanjayag,

Any Financial Planner/ Wealth Strategist will tell you this.

High Depreciating - Smells like Brand New OTP's. WARNING: Make sure your friend does his own research. OTP's are in most cases overpriced. By the time CW Financial group factor in their cut, plus the Developer's Advertising Costs and probably a Rental Guarantee, the purchase price for OTP's are often above market value.

Aa a general PI Rule: Anyone buyiing property now should double their money in ten years.

Regards JO

 

[sanjayag]

Thanks Josko.
Is it worth spending $295 (flights+accomodation included in this offer) and 2 days to go their head office in Melbourne (from regional SA) for understanding their model?

 

[josko]

Hm.

I cannot advise you on this professionally, but from a personal point of view I expect he will be rail roaded into signing some sort of document in regards to their services and if not, to purchase property from them.

The worth of this is completely in your friends court.



Regards JO

 

[steveadl]

Sanjay, if your friend needs his hand held to be able to buy his first IP, then go see them. But tell him to be prepared to pay extra for the properties they show him - where do you think they earn their money from?

Otherwise, tell him to read a few magazines, perhaps hang around SS for a bit and ask questions, then do some research on the web into an area he likes and the houses for sale in that area.

 

[The Y-man]

Has any body use the services of CW Financial Group. It is a Melbourne based company. They told my friend that if he is having an equity of minimum $110,000 in their PPOR, they can do wonders for him.....like they will make a $1.3m property portfolio for him and in 10 yrs he will have that costed to $2.6m or more. Also they will make my friend's tax liability to almost zero by buying the high depreciating new properties.

Haven't heard of them, but what they're saying is nothing too amazing - pretty boring stuff really....

You yourself would probably perform better than what these people are saying Sanjay. Correct? For example, how much did you buy your IP for? How much do you think it will be worth in 10 years (hopefully more than double right?).

If he does go, here are the questions to ask against the standard spiel:
1. are you GUARANTEEING that these propoerties will be worth 2x in 10 years? (They will produce a graph of property prices over the years. Ask them for a chart specifically for OTP projects for their previous projects. If they haven't done before or they have been in business less than 10 years, ask them how they can go on such data)
2. what is the rent you are expecting? how can you be so sure?
3. what are the outgoings (body corp etc) - how do you know?
4. Can you pay for all my meals while I am in Melbourne?

Cheers,

The Y-man

 

[The Y-man]

Sanjay, if your friend needs his hand held to be able to buy his first IP, then go see them. But tell him to be prepared to pay extra for the properties they show him - where do you think they earn their money from?

Otherwise, tell him to read a few magazines, perhaps hang around SS for a bit and ask questions, then do some research on the web into an area he likes and the houses for sale in that area.

Sanjay,

Your friend can send $295 to Steveadl, and he will visit him personally and give your friend some knowledge....

Cheers,

The Y-man

 

[josko]

LOL -

In fact, this forum is full of people he could pay for advice.

But why pay, when it is given so freely.

Regards JO

 

[sanjayag]

LOL -

In fact, this forum is full of people he could pay for advice.

But why pay, when it is given so freely.

Regards JO

Hi all,
Thanks for the answers. I'll communicate to my friend.

Steve......I think you should also open a company like this in Adelaide and that way it will be easy for us regional people to get the consultation.

I am still looking for somebody who have used this company's services.

BTW.....few days back I went to the library and asked for a book on realestate.....guess what.....they gave me a book "cash from trash to treasure" by Cathy Jayne Pierce whcih was written in 2005. Read that book and found it useful only for starters. Then did google on Cathy to find out that she is bankrupt now and facing lot of charges from the investors. I thing I couldn't understand from the book that how could she convince the bank to finance the finished value (after the renovation) of the properties at the time of purchase rundown properties.

Regards
Sanjay

 

[steveadl]

Steve......I think you should also open a company like this in Adelaide and that way it will be easy for us regional people to get the consultation.

Ha, nah think I'll leave that one - would do my head in! Rob might be your man! C'mon Rob, where are ya?!

Besides, then I'd have to stop contributing to SS - can hardly charge people when I'm here giving it away for free now could I?

 

[Bradsdad]

Hi,

Has any body use the services of CW Financial Group. It is a Melbourne based company. They told my friend that if he is having an equity of minimum $110,000 in their PPOR, they can do wonders for him.....like they will make a $1.3m property portfolio for him and in 10 yrs he will have that costed to $2.6m or more. Also they will make my friend's tax liability to almost zero by buying the high depreciating new properties.

Any feedback from forumites is appreciated.

Thanks
Sanjay

I wouldn't be suprised if they had a finger in more than one pie. The minimum equity part would rely on 95% lends and depending on your friend's income afair reliance on rental income. Unless they have their own LMI then I'm not sure how they could guarantee this. I'm sure they will however be more than happy to assist with obtaining finance.
I'm also pretty confident that these "high depreciating new properties" will be from their own stock or some related company.

It's nice to be able to charge for the initial seminar, have a bank pay brokerage and then get a cut from the property sales. At least there will be one winner for sure.

 

[Jonathon]

Aa a general PI Rule: Anyone buyiing property now should double their money in ten years.

Regards JO

And the rest! Consider the following quite nornal scenario:
A typical investor 10 years ago puts down a 20% deposit on a $200k house
initially rented at $150 pw, rising by 4% pa
1 vacant month per year
7% interest only mortgage
40% tax band (remember tax was a lot higher in the past)
No special buildings write off claimed, but $4k depreciation charged pa

Then sell the house today for $430,000, which represents 8% growth pa.

After paying CGT, your undiscounted cash flow is:
$45k first year (deposit, etc)
$2k holding cost each year
So a total cash outlow of about $64k over 10 years

But your net disposal proceeds, after CGTm etc would be $209k!

At an annual IRR of 14.4%, a whole lot better than doubling your money!

 

[sanjayag]

Thanks all. I've communicated all the above opinions to my mate.
He has decided to do it himself.

Regards
Sanjay

 

[turtle37]

Hi I am wondering too if there is anyone else who has used the services of CW financial group. We have made the trip to Melbourne. Listened to their spiel as outlined below, but did not sign up as we had concerns about the property they were putting to us to purchase. It was student accomodation in the heart of Melbourne. Am thinking too we may be better off going our first IP alone.

 

[Bradsdad]

Hi I am wondering too if there is anyone else who has used the services of CW financial group. We have made the trip to Melbourne. Listened to their spiel as outlined below, but did not sign up as we had concerns about the property they were putting to us to purchase. It was student accomodation in the heart of Melbourne. Am thinking too we may be better off going our first IP alone.

Hmmmmmm


Student Accommodation you say? The Melbourne market is becoming flooded with it and lenders either won't touch it or have drastically reduced LVR's for it. With numerous blocks being built by developers I personally don't see a lot of Capital growth in this type of property. On the other hand the returns can be fairly generous.

 

[The Y-man]

Melbourne. Listened to their spiel as outlined below, but did not sign up as we had concerns about the property they were putting to us to purchase. It was student accomodation in the heart of Melbourne. Am thinking too we may be better off going our first IP alone.

Wise move. Do you think they would need to sell to out of towners if the local demand was hot?

Cheers,

The Y-man

 

[kamoo]

Cw Financial Group

I also have been approached by this company (must be doing the rounds in country sa) but they did not say anything about them selling any properties, only doing up a financial plan looking at different mortgage strategies etc? Looking for more information on them if anyone has any. As the saying goes, when it sounds too good to be true ... it usually is. Cheers. Karina

 

[turtle37]

Wise move. Do you think they would need to sell to out of towners if the local demand was hot?

Cheers,

The Y-man

Yes that crossed our mind too. They were very convincing and seemed to have an answer for everything. But we'd made a bit of a pact before we went that we wouldn't sign anything on the day no matter how good it seemed or how much pressure was put on us.

 

[turtle37]

Hmmmmmm


Student Accommodation you say? The Melbourne market is becoming flooded with it and lenders either won't touch it or have drastically reduced LVR's for it. With numerous blocks being built by developers I personally don't see a lot of Capital growth in this type of property. On the other hand the returns can be fairly generous.

Thanks Bradsdad, We have little knowledge of the Melbourne market, but the more we are finding out about what CW were trying to get us involved in the happier we are to steer clear of them.

 

[turtle37]

I also have been approached by this company (must be doing the rounds in country sa) but they did not say anything about them selling any properties, only doing up a financial plan looking at different mortgage strategies etc? Looking for more information on them if anyone has any. As the saying goes, when it sounds too good to be true ... it usually is. Cheers. Karina

They spoke to us about purchasing property and minimising tax because that is what we said we were looking to do next. We paid the $195 for the trip to Melbourne (included flight and accom. - so we felt we didn't have a lot to lose and were interested in what they had to say.) They called themselves financial managers (I think was the term), what they did was found property for you in the best areas as far as capital growth goes, organised the finance through the big banks(NAB,CBA,ANZ etc.) and then managed your properties for 7.7%. (That is the only way they make their money!!!) Apart from a one of fee of $9100 plus GST. They would also fly you to Melb 2x a year to check how your finances are going and to plan for the future. One thing I am interested in knowing more about is a form you fill in to give to your pay clerk to reduce the amount of tax taken out of your pay when you have a IP. What is this form called? Do you get it from the ATO? Is it a recommended strategy??