How to build a 10 property portfolio in 3 – 5 years realistically on $50,000pa.

[skater]

Skater,

Using Western Sydney as an example

In doing the re-val, won't these purchases have the greatest influence? i.e. the real value is what has just been paid..

Further to that, unless FHO's are doing no research at all, they'll see these recent sales come up and be crazy to offer anything more.

Three in a row does not mean that there is not value there my friend. Mine was bought around 8 years ago, so of course the purchase price is going to be low. Nath's one was a "special case" that he was able to grab. I would have done the same if all my ducks were lined up in a row and I was able to finance it. (Hey Rolf if you're listening, how are we going?) I am not sure about his mate.

The point is, that if you get them straight off of the Department, do a minor spruce up (no, not a Nathan special, although some do need that too, but then the price reflects that), then they will reval at a similar price as the market in general. Western Sydney really has a kind of two tier thing going on and it is only due to the Department sell offs. These are not seen by the FHOs or many of the public because they usually think that auctions are scarey AND many are purchasing the already 'nice' properties.

My own daughter is a victim of this too. When looking at something that is grotty (needs a paint only) she will often shy away and tell me that there is no way she could live there.

 

[vbplease]

Three in a row does not mean that there is not value there my friend. Mine was bought around 8 years ago, so of course the purchase price is going to be low. Nath's one was a "special case" that he was able to grab. I would have done the same if all my ducks were lined up in a row and I was able to finance it. (Hey Rolf if you're listening, how are we going?) I am not sure about his mate.

I wasn't implying they're not good value.. just questioning the stage later down the track - will the valuer see the price gain from $180k to $240k, considering the latest sales are all $180k?? But you've clarified that.. and I guess it's been working for Nathan so far

 

[zed_kid]

Thanks for the contribution Nathan, even though the example is very ‘text book’ it should at least get the novices thinking.

I’m also a little sus on the buy ‘undervalued’ strategy. Don’t get me wrong, the strategy is great, buy an undervalued asset, get it re-valued, boom!... beautiful stuff. But this assumes the novice investor knows how to value the asset and then identify whats undervalue, its not hard but it takes time in the market to really know whats under, over or even. So its pretty keen asking a newbie to go out there and buy an undervalued house. And this is where the gurus come and lend a helping hand... or cut you off at the knee... I’m not having a go at anyone at all I’m just saying when you go swimming in the deep end watch out for sharks. But still, kudos to you sir for putting this down on paper.

 

[Ridin-High]

Question for Nathan, you are claiming the properties you have on your deal finder service market values are XYZ (http://binvested.com.au/wp-content/uploads/2011/04/Week-1-properties-presented.1.jpg). Are you taking any responsibility if someone that subscribes and purchases a property from the list value comes in at considerably less then XYZ?

Will their be re-reimbursement if it comes in under what you claim the value to be?

 

[jaycee]

Sorry,

To clarify further, the property is valued in this example by the bank at a $40,000 increase and then 90% of this or $36,000 is redrawn so the investor gets their capital back to use for the purchase of the next property.

This bit I dont' get...

If I have $100k worht of property with no mortgage...

the bank would lend me 80% LVR, themax I cuodl borrow is $80k
the bank would lend me 90% LVR, the max I cuold borrow is $90k

If I have $240k worth of property with no mortgage... as per the example

the bank would lend me 80% LVR, themax I cuodl borrow is $192k
the bank would lend me 90% LVR, the max I cuold borrow is $216k

If I had $240k worth of property and a $200k loan......

the bank would lend me 80% LVR, themax I could borrow is $192k - but I have a $200k mortgage, so I can;t borrow anything at all

the bank would lend me 90% LVR, the max I cuold borrow is $216k - but I ahve a $200k mortgage, soo I culd only borow $16k.... not the $36k stated

Can sxomeone please calrify if this is wrongly calculated

If not wrongly calcualted, that would mean Sarah in the example would have hav eto save bloody hard again to get the extra $20k to be able to buy the 2nd IP.. this woudl take time, extending the timeframe between the first and 2nd purchase at least (which has not been taken into account)

I love the idea of this dstuff workign, but it has to make a bit more sense to me first....

 

[skater]

In Nathan's example the purchase price is $200k. A 90% loan for this is $180k.

Reval @ $240k means that 90% of this is $216k. $216k-$180k=$36k.

 

[kathryn d]

Jaycee,
In Nathan's OP he states that Sarah starts witha $30K deposit.

$10K for closing costs

 

[NataleaK]

Nathan You're On The Telly!!!

 

[Melbournian]

Question for Nathan, you are claiming the properties you have on your deal finder service market values are XYZ (http://binvested.com.au/wp-content/uploads/2011/04/Week-1-properties-presented.1.jpg). Are you taking any responsibility if someone that subscribes and purchases a property from the list value comes in at considerably less then XYZ?

Will their be re-reimbursement if it comes in under what you claim the value to be?

"Professional indemnity insurance" - u seem happy to take the role of being nathan's ombudsman? i really curious - what do you hope to achieve?

 

[jaycee]

In Nathan's example the purchase price is $200k. A 90% loan for this is $180k.

Reval @ $240k means that 90% of this is $216k. $216k-$180k=$36k.

OK cool, that's what it was.. when I re read Nathan's original post, I noticd I replaced the words "Purchase price" with "mortgage" in my mind...

I have tired to re run the numbers, but I am still confused somehow (and I dont hae excel on thi laptop either, which doesn't help)

Purchase Property 1 price $200,000 (Sarah used all her cash, none left)
Revaluation price $240,000
Mtge: $180k
Top up loan to 90% LVR = $36,000

Purchase Property 2 price $200,000 TOTAL $400k (using $20k deposit
Revaluation price $240,000 TOTAL $480k
Mtge: $180k +$30k(from the $36ktop uploan)+$180k TOTAL MTGE $390k
90% of TOTAL REVALUATION PRICE = $42k equity available

Purchase Property 2 price $200,000 TOTAL $600k (using $20k deposit
Revaluation price $240,000 TOTAL $720k
Mtge: $180k +$30k(from $40ktop uploan)+$180k+210K TOTAL MTGE $600k
90% of TOTAL REVALUATION PRICE = $48k equity available


Assuming (there's always an assumption) learning to identify the well yielding undervalued properties (i.e.learning to identify them), are 90% loans common and easy enough to get ?

 

[BuildingBlocks]

u seem happy to take the role of being nathan's ombudsman

hahahahhahahahaha

 

[G_Man]

I'd throw the can at your head

What a douchebag....

 

[Ridin-High]

"Professional indemnity insurance" - u seem happy to take the role of being nathan's ombudsman? i really curious - what do you hope to achieve?

Professional indemnity insurance provides cover for claims brought against the policyholder due to their professional negligence.

Lets not get ahead of ourselves and claim Nathan is being Negligent (Failing to take proper care in doing something) ok Melbournian. You would think someone advising people on spending large sumes of money is taking proper care.... but always its buyer beware and you must take due diligence on the person you are trusting.

I was asking a genuine question and in answer to your question "What was i hoping to achieve".

1.) Get an answer from Nathan on the question i asked. If i purchased a deal from his website as a hypothetical for 180k and he said its worth 240k, but the valuer comes back and goes its worth 190k thats a full 25% less then what he said. What will happen? I presume it's just tuff *****, business wouldn't care they got their money and you should have done further research.

If the above happened it would destroy Nathans credibility, leave the client up the creek.

If you are using this forum as a precursor to drive business for your property related services business expect critique especially if you are claiming to be the mecca of portfolio construction... can't handle the heat then don't post the *****

 

[andrew_de_a]

What a douchebag....

Lolsies....

 

[laurencei]

Hi Nathan,

How do you get the banks to re-val the property above the sale price so soon? Is that because you ALWAYS do a "reno" on the property?

How does the bank let you do a re-val so early? I thought you need to wait 6-12 months? (Obviously I'm wrong here - I just want to clarify this bit).

Thanks

 

[Nathan]

Thanks for the questions everyone.

Riding High, what an ongoing shame that you must always derive to this form of small whit on a daily basis.

I will answer your question once and in a direct manner so do not try and twist my words as you do on a daily basis on this forum in every post I make.

The market value is based using the resurces of RpData - Yes this is the same products the banks use for valuation purposes. One can never gaurantee anything and it is always advised to make full inquiries on ther own before making any investing decision. Deal Finder doesnt do anything except for provide the link and the reports generated from Australias #1 source RpData for a buyer to make an educated decision. There are no comissions, or hidden agenda and this is the way I always do business.

As an individual I am always very transperant with my numbers and hold a high level of integrity being a clean slate posting openly my numbers, results. I have been a part of hundreds of transactions and buy properties for myself on a monthly basis below market value.

One question I must pose to you?
How many properties have you purchased below market value? And please disclose all your details of these deals.


I have been upmost transperant by showing all previous deals, devulging to the nitty gritty and also showing all the deals I have been doing this year and last. As a matter of fact I have added 10 buy and holds all using this strategy to my bottom line in last 10 months.

Regards,
Nathan.

 

[Melbournian]

Professional indemnity insurance provides cover for claims brought against the policyholder due to their professional negligence.

Lets not get ahead of ourselves and claim Nathan is being Negligent (Failing to take proper care in doing something) ok Melbournian. You would think someone advising people on spending large sumes of money is taking proper care.... but always its buyer beware and you must take due diligence on the person you are trusting.

I was asking a genuine question and in answer to your question "What was i hoping to achieve".

1.) Get an answer from Nathan on the question i asked. If i purchased a deal from his website as a hypothetical for 180k and he said its worth 240k, but the valuer comes back and goes its worth 190k thats a full 25% less then what he said. What will happen? I presume it's just tuff *****, business wouldn't care they got their money and you should have done further research.

If the above happened it would destroy Nathans credibility, leave the client up the creek.

If you are using this forum as a precursor to drive business for your property related services business expect critique especially if you are claiming to be the mecca of portfolio construction... can't handle the heat then don't post the *****

forgive me for asking -- but you seem pretty pretty incensed with him (even with ur signature) for some reason - if you're making some $$ i could rationalize or if you had advice that you relied on, fair call - other than taking the role of policing him (which is consumer affairs etc responsibilities) - - so why the hatred? let him be mate.

 

[T.G]

Being totally new to investing I have a few questions

How do you know if the property is undervalued and how do you know the location of the house isn't in an area filled with ferals if you aren't local to the area

Also are these houses all ex doh houses ?

 

[skater]

How do you know if the property is undervalued and how do you know the location of the house isn't in an area filled with ferals if you aren't local to the area

Also are these houses all ex doh houses ?

It's research. Before you buy anything, you do your research and know what is good value in any area. Just like if you were to buy something in your own street, if the going price for something of a specific quality is $300k, you would not pay $400k for it, but if someone mistakenly advertises something at perhaps $250k, you would jump at it.

The houses that Nathan is referring to are hypothetical in nature. They may or may not be ex housies depending on the area.

 

[Piston Broke]

Being totally new to investing I have a few questions

How do you know if the property is undervalued and how do you know the location of the house isn't in an area filled with ferals if you aren't local to the area

Also are these houses all ex doh houses ?

They are crappy houses in crappy locations using hypothetical numbers.
Out west sellers cant sell anything at the moment and prices are falling.


As for "how much did you earn", well give me the address for those properties and I will get a valuer to look at them.
There is something in this country called "truth in advertising" and this is advertising claiming profits of over 300k in seven days.
It's not "hatred" it's good 'ole "out your money where your mouth is instead of talking crap".